Trading Symbol: "IPT: TSX.V"
VANCOUVER, Aug. 14, 2019 /CNW/ - IMPACT Silver Corp.
("IMPACT" or the "Company") announces its financial results for the
six months ending June 30, 2019.
The Company reported revenues of $2.8
million, a decrease of 11% from same period in 2018, with
weak metal prices and lower production offset by improved grades.
Net loss was $2.8 million which
includes a one-time write-down of $1.7
million of exploration and evaluation assets as the Company
reduced its land package size to save on biannual concession taxes.
IMPACT continues to have no long-term debt and a strong balance
sheet.
Fred Davidson, President &
CEO of IMPACT stated, "Nearly seven years into this mineral
downturn, silver had a challenging first half of 2019. Continuing
the cost reduction efforts implemented from September 2018, operating expenses in Q2 2019
dropped to just $3.0 million from
$3.8 million, a sharp 20% decrease
despite only a 10% drop in silver ounces sold. The decrease in land
package size, keeping the high potential packages with the
possibility to quickly re-acquire, showcases the flexibility and
nimbleness of our operations. Being the largest employer in
Zacualpan for the last 14 years,
IMPACT has built up trust and rapport with mining government
contacts and local staff.
IMPACT is well positioned as precious metal prices start to
recover. We aim to continue to mine profitable ounces and manage
our production costs while selectively exploring for high potential
targets to showcase the high success rate of our exploration
efforts. With higher precious metal prices due to geopolitical
turmoil and uncertainty in late 2019, our investors and the Company
can expect higher revenue per ounce of silver to flow right to
profit."
Financial Overview
- Revenue for Q2 2019 was $2.8
million compared to $3.1
million in Q2 2018, an 11% drop year over year with
improvement in silver head grade offset by lower silver prices and
fewer ounces produced.
- Operating expenses for Q2 2019 were $3.0
million, a substantial decrease from Q2 2018 at $3.8 million.
- Mine operating loss before amortization and depletion improved
to $0.2 million in Q2 2019 compared
to $0.7 million in the same period of
2018 as cost reduction and improving head grade at the mill
continue to help combat lower silver prices.
- Net loss for the quarter was $2.8
million, largely due to $2.1
million of non-cash expenses including a reduction of
mineral concession holdings from 357 km2 to 167
km2, resulting in a one-time write-down of $1.7 million. All active mines, facilities, and
most of the 5,000 identified historic mine workings and high
potential prospect targets have been retained.
- The Company's cash position at June 30,
2019 was $0.8 million.
- Subsequent to the quarter, the Company closed a non-brokered
private placement for aggregate gross proceeds of $4.95 million.
- The Company has no long-term debt.
Production Overview
- Silver production decreased to 145,658 ounces in Q2 2019 from
194,223 ounces in Q2 2018 due to fewer tonnes
processed.
- Average mill feed grade for silver was 160 grams per tonne
(g/t) in Q2 2019, a 10% increase from 146 g/t in Q2
2018.
- Throughput at the mill in Q2 2019 was 33,616 tonnes, a decrease
from 48,009 tonnes in Q2 2018 due to production refocusing on
higher grade ore and breakeven ounces.
Silver sales decreased 10% in the second quarter of 2019 to
156,242 ounces compared to 2018 same period figures of 172,701 as
lower silver prices forced the Company to prioritize breakeven
ounces. A challenging quarter commenced for metals with trade
wars, geopolitical uncertainties, and investor's reversion to
safety in US dollars and treasuries.
Revenue per tonne sold for Q2 2019 was $76.74 from $66.46
in Q2 2018, a substantial 15% increase as efforts to increase grade
and breakeven ounces is showing dividends. Cost continues to be a
focal point with direct cost per tonne rising slightly in Q2 2019
to $82.82 from $77.91 with a moderate cost per tonne increase
expected while production levels are reduced.
In June, IMPACT announced a successful sampling program by its
Exploration team at Manto America. Manto America hosts the
strongest gold soil geochemical anomaly on IMPACT's claims and
extends over an area 3.5 km east-west and 900 m north-south. It is located 10 km south of
the operating Guadalupe processing plant and 7 km north-northeast
of the Capire processing plant. The area is being mapped and
sampled by IMPACT crews and to date 33 rock samples returned
greater than 2.0 g/t Au from historic artisanal underground
workings and surface with values up to 19.5 g/t gold over a true
width of 1.2 m. With the proceeds of
the recent financings, IMPACT plans to continue working this area
with a more systematic exploration effort.
IMPACT has also engaged an engineering group to review the
possibility of Dense Media Separation (DMS) in an effort to enhance
economics of mining at the Capire open pit and 200 tonnes per day
(TPD) production centre. The Capire plant has been on care and
maintenance since July 2013 and the
latest NI 43-101 resource figures can be found in IMPACT's
March 2016 news release.
George Gorzynski, P.Eng., a
Qualified Person under the meaning of Canadian National Instrument
43-101, approved the technical content regarding exploration work
in this news release.
A recorded conference call reviewing the financial and
production results of the six months ended June 30, 2019 will be available on the Company
website on August 15, 2019 at
www.impactsilver.com/s/ConferenceCalls.asp.
The information in this news release should be read in
conjunction with the Company's unaudited condensed consolidated
interim financial statements and Management's Discussion and
Analysis, available on the Company website at www.impactsilver.com
and on SEDAR at www.sedar.com. All amounts are stated in Canadian
dollars unless otherwise specified.
About IMPACT Silver
IMPACT Silver Corp. is a successful silver-gold
explorer-producer with two processing plants on adjacent districts
within its 100% owned mineral concessions covering 167
km2 in central Mexico
with excellent infrastructure and labor force. Over the past
fourteen years IMPACT has produced over 9.4 million ounces of
silver, generating revenues of over $175
million, with no long-term debt. At the Royal Mines of
Zacualpan Silver District several underground silver mines feed the
central Guadalupe processing plant. To the south, in the
Mamatla District the Capire
processing pilot plant is currently rated at 200 tpd but is
expandable. It is adjacent to an open pit silver mine with a
National Instrument 43-101 ("NI 43-101") compliant resource of over
4.5 million oz silver, 48 million lbs zinc and 21 million lbs lead
(see IMPACT news release dated January 18,
2016) that is awaiting higher silver prices to be
restarted. Given the challenging markets the last few years,
IMPACT has focused its exploration efforts on high probability gold
and silver targets, with potentially rapid timelines to production
and proximity to the Guadalupe processing plant. Following a decade
of exploration successes leading to production cash flows, IMPACT
has shown the Zacualpan District
to be endowed with many high grade epithermal silver-gold
zones. With markets more receptive to early exploration results, in
2019 IMPACT continues to add emphasis to exploration work to
further realize value on this prolific land package.
Additional information about IMPACT and its operations can be
found on the Company website
at www.IMPACTSilver.com.
On behalf of IMPACT Silver Corp.
"Frederick W. Davidson"
President & CEO
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-Looking and Cautionary Statements
This IMPACT News Release may contain certain "forward-looking"
statements and information relating to IMPACT that is based on the
beliefs of IMPACT management, as well as assumptions made by and
information currently available to IMPACT management. Such
statements reflect the current risks, uncertainties and assumptions
related to certain factors including but not limited to, without
limitations, exploration and development risks, expenditure and
financing requirements, title matters, operating hazards, metal
prices, political and economic factors, competitive factors,
general economic conditions, relationships with vendors and
strategic partners, governmental regulation and supervision,
seasonality, technological change, industry practices, and one-time
events. Should any one or more risks or uncertainties materialize
or change, or should any underlying assumptions prove incorrect,
actual results and forward-looking statements may vary materially
from those described herein. IMPACT does not assume the obligation
to update any forward-looking statement.
The Company's decision to place a mine into production, expand a
mine, make other production related decisions or otherwise carry
out mining and processing operations, is largely based on internal
non-public Company data and reports based on exploration,
development and mining work by the Company's geologists and
engineers. The results of this work are evident in the discovery
and building of multiple mines for the Company and in the track
record of mineral production and financial returns of the Company
since 2006. Under NI43‑101 the Company is required to disclose that
it has not based its production decisions on NI43‑101‑compliant
mineral resource or reserve estimates, preliminary economic
assessments or feasibility studies, and historically such projects
have increased uncertainty and risk of failure.
SOURCE IMPACT Silver Corp.