Ascendant Resources Inc. (TSX:ASND) (OTCQX:ASDRF)
(FRA:2D9) ("Ascendant" or the "Company”) is delighted to report its
first quarter of free cash flow at its El Mochito mine in Honduras
with $8.0 million in cash exiting 2017. The Company is also pleased
to announce fourth quarter and full year 2017 production results,
with record monthly production achieved in December. With the
turnaround of the El Mochito mine now definitively complete, the
financial and operational success achieved in 2017 provides
management with the confidence to deliver robust 2018 guidance as
the El Mochito mine begins a period of sustained profitable
production.
2017 Operational Performance – Guidance
Exceeded at Record Throughput
Total contained metal production for the 2017
calendar year was 66.1 million pounds of zinc equivalent1 exceeding
the Company’s guidance of 65.8 million pounds. During the fourth
quarter, contained zinc equivalent metal production was 19.6
million pounds, up by 12% from the third quarter.
Milled production for the month of December was
69,578 tonnes (or an average of 2,399 tonnes per operating day).
This represents the strongest month of production achieved at the
El Mochito mine during 2017, and an overall increase in production
of 81% since January 2017, a significant accomplishment only a year
after acquiring the operation. Milled production for the fourth
quarter was 198,355 tonnes (or an average of 2,241 tonnes per
operating day) representing a 13% improvement over third quarter
production of 176,037 tonnes (or an average of 1,934 tonnes per
operating day).
Operations have continued to benefit from the
ongoing improvement programs within the operating environment and
the introduction of new mining equipment. Processing recoveries
remained relatively consistent throughout the year and are expected
to remain consistent going forward. Ore grades are expected to
improve in 2018 as production shift towards higher grade areas
within the mine, namely Esperanza and Nueva Este, and with the
contribution from conventional mining activities within smaller but
higher-grade ore zones. In addition, the remainder of the new
mining equipment is expected to be fully deployed by mid-2018
supporting higher equipment availability for maintaining current
production rates.
1 This figure was
calculated on a spot metal price basis. Using the metal price
assumptions as in the 2017 guidance press release dated April 2017
of US$2,744/t (US$1.25/lb) Zinc, US$2,289/t (US$1.04/lb) Lead and
US$17.50/oz Silver, contained metal produced for 2017 was 67.0Mlbs
zinc equivalent pounds. |
Operational performance for fourth quarter and
full year 2017 is provided in the table below:
|
|
|
|
|
|
|
Units |
October |
November |
December |
Q4/17 |
|
|
|
|
|
|
Ore
Milled |
tonnes |
64,449 |
64,327 |
|
69,578 |
198,355 |
Ore
Milled |
tonnes
per day |
2,184 |
2,144 |
|
2,399 |
2,241 |
Working Days |
|
29.5 |
30 |
|
29 |
89 |
|
|
|
|
|
|
Mill Head Grade |
|
|
|
|
|
Average Zn grade |
% |
3.72% |
3.84% |
|
3.41% |
3.65% |
Average Pb grade |
% |
1.47% |
1.59% |
|
1.19% |
1.41% |
Average Silver Grade |
g/t |
35.7 |
38.0 |
|
29.00 |
34.1 |
ZnEq
Head Grade |
% |
5.44% |
5.70% |
|
4.82% |
5.31% |
|
|
|
|
|
|
Average Recoveries |
|
Zinc |
% |
88.6% |
88.6% |
|
88.3% |
88.5% |
Lead |
% |
72.4% |
76.6% |
|
74.7% |
74.6% |
Silver |
% |
83.3% |
77.0% |
|
72.8% |
77.6% |
|
|
|
|
|
|
Contained Metal Production |
|
Zinc |
tonnes |
2,127 |
2,186 |
|
2,098 |
6,411 |
Lead |
tonnes |
665 |
782 |
|
619 |
2,066 |
Silver |
ozs |
61,595 |
|
60,048 |
|
47,395 |
169,039 |
Zinc
equivalent metal |
tonnes |
2,955 |
|
3,099 |
|
2,824 |
8,878 |
Zinc
equivalent metal |
MM
lbs |
6,514,109 |
|
6,832,496 |
|
6,226,527 |
19,573,132 |
|
|
|
|
|
|
|
|
|
Units |
Q3/17 |
Q2/17 |
Q1/17 |
Year |
Year Guidance |
Variance |
|
|
|
|
|
|
|
|
Ore
Milled |
tonnes |
176,037 |
150,785 |
131,115 |
656,292 |
663,475 |
-1% |
Ore
Milled |
tonnes
per day |
1,934 |
1,733 |
1,619 |
1,889 |
1,923 |
|
Working Days |
|
91 |
87 |
81 |
347.5 |
345 |
|
|
|
|
|
|
|
|
|
Mill Head Grade |
|
|
|
|
|
|
|
Average Zn grade |
% |
3.51% |
3.36% |
3.43% |
3.50% |
3.50% |
- |
Average Pb grade |
% |
1.46% |
1.34% |
1.33% |
1.39% |
1.50% |
-7% |
Average Silver Grade |
g/t |
38.3 |
48.9 |
52.1 |
43.00 |
48.0 |
-10% |
ZnEq
Head Grade |
% |
5.36% |
5.50% |
5.56% |
5.63% |
5.73% |
-2% |
|
|
|
|
|
|
|
|
Average Recoveries |
|
|
|
|
|
|
|
Zinc |
% |
88.8% |
88.9% |
89.8% |
88.9% |
85.1% |
4% |
Lead |
% |
73.7% |
72.3% |
76.9% |
74.3% |
66.6% |
12% |
Silver |
% |
78.0% |
79.3% |
78.8% |
77.7% |
68.9% |
13% |
|
|
|
|
|
|
|
|
Contained Metal Production |
|
|
|
|
|
|
Zinc |
tonnes |
5,488 |
4,505 |
4,032 |
20,436 |
19,986 |
2% |
Lead |
tonnes |
1,894 |
1,459 |
1,341 |
6,760 |
6,468 |
5% |
Silver |
ozs |
168,181 |
188,245 |
173,041 |
698,505 |
705,520 |
-1% |
Zinc
equivalent metal |
tonnes |
7,936 |
6,975 |
6,201 |
29,990 |
29,843 |
0.5% |
Zinc
equivalent metal |
MM
lbs |
17,496,673 |
15,376,986 |
13,671,410 |
66,118,201 |
65,793,000 |
0.5% |
|
|
|
|
|
|
|
|
2018 Production and Cost Guidance –
Strong Production Supporting Meaningful Free Cash Flow
The operational and financial milestones
achieved in 2017 have positioned the Company for an exceptional
2018, with an expected 41%-65% increase in contained metal
production as compared to 2017. Over the past year, the Company has
focused on tonnage growth, correcting existing deficiencies as well
as reinvigorating and training the work force, culminating in a
ramp up in profitability and achieving the Company’s first quarter
of positive free cash flow.
In 2018, the Company plans to continue to build
on this solid operating performance while focusing on maximizing
free cash flow and long-term profitability during a period of
continued stable operations. During 2018 management expects to
maintain production rates of between 2,200 – 2,400 tonnes per day
while increasing mill feed grades and reducing costs.
Capital expenditures include development costs,
the balance of mobile equipment purchases as well as exploration
expenditures as the Company continues to focus on expanding the
overall size and grade of the resource base to support the
Company’s long-term growth objectives. Operational updates will be
provided on a quarterly basis going forward.
2018 Production Guidance is provided in the
table below:(all financial figures in $US)
|
Contained Metals in Concentrate |
Zinc
equivalent metal |
93 –
109 million lbs |
Zinc |
65 –
73 million lbs |
Lead |
24 –
28 million lbs |
Silver |
900,000 – 1,200,000 ozs |
|
|
Direct
Operating Costs |
$70 –
$80 / tonne |
Capital
Expenditure |
$16 –
$18 million |
|
|
Financial Metrics |
|
Adjusted EBITDA2 |
$32 –$
40 million |
Free Cash Flow |
$14 –
$20 million |
|
All figures in the
above table are based on the following metal price assumptions;
$1.50/lb zinc, $1.10/lb lead and $18/oz silver. |
2017 Achievements at El Mochito a
Yardstick for Success within the Mining Industry
Ascendant acquired the El Mochito mine in
December 2016, almost 70 years into continued operations by several
operators, many of whom had significant financial means. Within
less than a year, Ascendant’s operating team has taken what was an
undercapitalized and underperforming mine and turned it into a free
cash-flow generating operation with record production rates, well
above those of previous operators. This successful and timely
turnaround is a major feat for a mine of any size or age. Using the
talents and determination of the Company’s team, El Mochito
delivered an 81% increase in production for 2017 and is now a mine
that can sustain and even improve on current throughput rates while
providing strong financial performance for years to come.
Exiting the year, Ascendant has a strong working
capital position with a cash balance of $8.0 million and
substantial value in concentrate inventories, which are expected to
be shipped on a monthly basis. This working capital position and
the projected cash flows for 2018 provide the Company with the
financial strength needed to fully fund all planned, development,
exploration and capital expenditures. The work and subsequent
success of the team this year indicates there is tremendous
long-term opportunity remaining at El Mochito yet to be fully
harnessed.
The Company continues to target the completion
of a new NI 43-101 mineral resource report by the second quarter of
2018 which is expected to highlight the significant resource
potential at El Mochito. Exploration results published in April and
October 2017 highlight exciting grades and intercepts and will
contribute to the report in the second quarter. The Company is also
undertaking a review of various long-term optimization programs to
support a lower cost structure and higher sustainable production
rates which should be completed by mid year.
President and CEO Chris Buncic stated: “During
the past year, we have been successful in completely transforming
the El Mochito mine into a cash flow positive operation through
rigorous optimization programs at all levels in the Company. We
were able to deliver on our goal of restoring production levels
beyond prior highs and, as a result, successfully exceeded our
annual production target, a testament to the hard work and ability
of our team. With a year of strong operational success behind us,
El Mochito has proven capable to be a cornerstone asset with great
opportunity to generate significant free cash flows for years to
come. It is difficult to effectively stress what an incredible
accomplishment we have achieved this year.”
He continued, “In 2018, Ascendant will continue
to build on the successes of 2017 as we pursue further operational
improvements, increasing head grade to the mill leading to improved
value per tonnes milled while improving the contribution margin
through a significant focus on cost cutting to drive profitability.
Exploration work to-date has demonstrated the potential for greater
tonnage at higher grades, and we look forward to providing a
resource update in the second quarter.”
2Adjusted EBITDA is a
Non-IFRS measure and is calculated by considering the Company's
earnings before interest payments, tax, depreciation and
amortization, adjusted for net foreign exchange
expenses. |
About Ascendant Resources
Inc.
Ascendant is a Toronto-based mining company
focused on its 100%-owned producing El Mochito zinc, silver and
lead mine in west-central Honduras, which has been in production
since 1948. After acquiring the mine in December 2016, Ascendant
implemented a rigorous optimization program aimed at restoring the
historic potential of the El Mochito mine. In 2017, the Company
successfully completed the operational turnaround it set out to
achieve with sustained production at record levels and
profitability restored. The Company now remains focused on cost
reduction and further operational improvements to drive robust free
cash flow in 2018 and beyond. Ascendant is also focused on
expanding and upgrading known resources through extensive
exploration work for near-term growth. With a significant land
package of 11,000 hectares and an abundance of historical data
there are several regional targets providing longer term
exploration upside which could lead to further resource growth. The
Company is also engaged in the evaluation of producing and
development stage mineral resource opportunities, on an ongoing
basis. The Company's common shares are principally listed on the
Toronto Stock Exchange under the symbol "ASND". For more
information on Ascendant Resources, please visit our website
at www.ascendantresources.com.
Neither the Toronto Stock Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX) accepts responsibility for the adequacy or
accuracy of this release. For further information please
contact:
Katherine PrydeDirector, Communications &
Investor RelationsTel: 888-723-7413info@ascendantresources.com
Forward Looking
Information
This news release contains "forward-looking statements" and
"forward-looking information" (collectively, "forward-looking
information") within the meaning of applicable Canadian securities
legislation. All information contained in this news release, other
than statements of current and historical fact, is forward-looking
information. Often, but not always, forward-looking information can
be identified by the use of words such as "plans", "expects",
"budget", "guidance", "scheduled", "estimates", "forecasts",
"strategy", "target", "intends", "objective", "goal",
"understands", "anticipates" and "believes" (and variations of
these or similar words) and statements that certain actions, events
or results "may", "could", "would", "should", "might" "occur" or
"be achieved" or "will be taken" (and variations of these or
similar expressions). Forward-looking information is also
identifiable in statements of currently occurring matters which may
continue in the future, such as "providing the Company with", "is
currently", "allows/allowing for", "will advance" or "continues to"
or other statements that may be stated in the present tense with
future implications. All of the forward-looking information in this
news release is qualified by this cautionary note.
Forward-looking information in this news release
includes, but is not limited to, statements regarding the
consistency of processing recovery levels, improvements of grades
in 2018, deployment of new mining equipment, increase in contained
metal production, maintenance of production rates, increase of mill
feed grades, reduction of costs, monthly shipments of concentrate,
the ability to fully fund planned development, exploration and
capital expenditures, completion of an NI 43-101 report and the
undertaking of various long-term optimization programs.
Forward-looking information is not, and cannot be, a guarantee of
future results or events. Forward-looking information is based on,
among other things, opinions, assumptions, estimates and analyses
that, while considered reasonable by Ascendant at the date the
forward-looking information is provided, inherently are subject to
significant risks, uncertainties, contingencies and other factors
that may cause actual results and events to be materially different
from those expressed or implied by the forward-looking information.
The material factors or assumptions that Ascendant identified and
were applied by Ascendant in drawing conclusions or making
forecasts or projections set out in the forward-looking information
include, but are not limited to, the ability of the Company to
maintain the consistency of processing recovery levels, to improve
grades in 2018, to deploy new mining equipment, increase contained
metal production, maintain production rates, increase mill feed
grades, reduce costs, make monthly shipments of concentrate, fully
fund planned development, exploration and capital expenditures,
complete an NI 43-101 report and undertake various long-term
optimization programs and other events that may affect Ascendant's
ability to develop its project; and no significant and continuing
adverse changes in general economic conditions or conditions in the
financial markets.
The risks, uncertainties, contingencies and
other factors that may cause actual results to differ materially
from those expressed or implied by the forward-looking information
may include, but are not limited to, risks generally associated
with the mining industry, such as economic factors (including
future commodity prices, currency fluctuations, energy prices and
general cost escalation), uncertainties related to the development
and operation of Ascendant's projects, dependence on key personnel
and employee and union relations, risks related to political or
social unrest or change, rights and title claims, operational risks
and hazards, including unanticipated environmental, industrial and
geological events and developments and the inability to insure
against all risks, failure of plant, equipment, processes,
transportation and other infrastructure to operate as anticipated,
compliance with government and environmental regulations, including
permitting requirements and anti-bribery legislation, volatile
financial markets that may affect Ascendant's ability to obtain
additional financing on acceptable terms, the failure to obtain
required approvals or clearances from government authorities on a
timely basis, uncertainties related to the geology, continuity,
grade and estimates of mineral reserves and resources, and the
potential for variations in grade and recovery rates, uncertain
costs of reclamation activities, tax refunds, hedging transactions,
as well as the risks discussed in Ascendant's most recent Annual
Information Form on file with the Canadian provincial securities
regulatory authorities and available at www.sedar.com.
Should one or more risk, uncertainty,
contingency, or other factor materialize, or should any factor or
assumption prove incorrect, actual results could vary materially
from those expressed or implied in the forward-looking information.
Accordingly, the reader should not place undue reliance on
forward-looking information. Ascendant does not assume any
obligation to update or revise any forward-looking information
after the date of this news release or to explain any material
difference between subsequent actual events and any forward-looking
information, except as required by applicable law.
Ascendant Resources (TSX:ASND.WT)
Historical Stock Chart
Von Jul 2024 bis Jul 2024
Ascendant Resources (TSX:ASND.WT)
Historical Stock Chart
Von Jul 2023 bis Jul 2024