VANCOUVER, May 8, 2019 /CNW/ - Filo Mining Corp.
(TSX-V:FIL)(Nasdaq First North:FIL) ("Filo Mining" or the
"Company") is pleased to announce its results for the three months
ended March 31, 2019.
Please view PDF version of News Release.
HIGHLIGHTS
Successful Completion of PFS and Introduction of Maiden
Probable Mineral Reserves
To cap off its key operating initiatives of 2018, the Company
successfully completed a pre-feasibility study ("PFS") at the Filo
del Sol Project (the "Project") on January
13, 2019. The PFS results continue to underline the
Company's longtime views that the Filo del Sol Project holds
considerable size and strong economics, which are all the more
exciting when considering that the PFS only incorporates the oxide
portion of the current mineral resource, excludes any impact of the
sulphide material beneath, and is based on exploration of less than
20% of the Project's vast area.
Highlights of the PFS include:
- a US$ 1.28 billion after-tax NPV
using an 8% discount rate and an IRR of 23% at US$ 3.00/lb copper, US$
1,300/oz gold and US$ 20/oz
silver;
- average annual production of approximately 67,000 tonnes of
copper (including copper as copper precipitate), 159,000 ounces of
gold, and 8,653,000 ounces of silver at a C1 cost of $1.23/lb CuEq.;
- pre-production capital cost of US$ 1.27
billion (excluding costs prior to a construction
decision);
- 14 year mine life (including pre-stripping) producing almost
1.75 billion pounds of copper as cathode, and 1.92 million ounces
of gold and 104 million ounces of silver as doré over the 13 year
leach feed schedule. Additional copper is also recovered as a
high-grade copper precipitate; and
- a low strip ratio of 1.5:1 (waste:ore).
The PFS also introduced an initial Mineral Reserve estimate for
the Filo del Sol project, which, at a 0.01
US$/tonne Net Value per Tonne ("NVPT") cut-off, is as
follows:
|
Tonnage
|
Grade
|
Contained
Metal
|
Category
(all
domains)
|
(Mt)
|
Cu
(%)
|
Au
(g/t)
|
Ag
(g/t)
|
NVPT
($/t)
|
Cu
(M lbs)
|
Au
(K oz)
|
Ag
(K oz)
|
Proven
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Probable
|
259.1
|
0.39
|
0.33
|
15.1
|
25.30
|
2,226
|
2,764
|
126,028
|
Total Proven
and
Probable
|
259.1
|
0.39
|
0.33
|
15.1
|
25.30
|
2,226
|
2,764
|
126,028
|
|
Notes to accompany
Filo del Sol Mineral Reserves table:
|
1.
|
Mineral Reserves
have an effective date of 13 January 2019. The Qualified
Person for the estimate is Mr. Jay Melnyk, P.Eng. of AGP Mining
Consultants, Inc.
|
2.
|
The Mineral
Reserves were estimated in accordance with the CIM Definition
Standards for Mineral Resources and Reserves;
|
3.
|
The Mineral
Reserves are supported by a mine plan, based on a pit design,
guided by a Lerchs Grossmann (LG) pit shell. Inputs to that process
are:
|
|
•
|
Metal prices of Cu
$3.00/lb, Ag $20/oz, Au $1300/oz;
|
|
•
|
Mining cost of
$2.00/t;
|
|
•
|
An average
processing cost of $9.73/t;
|
|
•
|
General and
administration cost of $2.02/t processed;
|
|
•
|
Pit slope angles
varying from 29 to 45 degrees, inclusive of geotechnical berms and
ramp allowances;
|
|
•
|
Process recoveries
were based on rocktype. The average recoveries applied were 83% for
Cu, 73% for Au and 80% for Ag, which exclude the adjustments for
operational efficiency and copper recovered as precipitate which
were included in the financial evaluation;
|
4.
|
Dilution and
Mining Loss adjustments were applied at ore/waste contacts using a
mixing zone approach. The volumes of dilution gain and ore loss
were equal, resulting reductions in grades of 1.0%, 1.3% and 1.0%
for Cu, Au and Ag respectively;
|
5.
|
Ore/Waste
delineation was based on a Net Value Per Tonne (NVPT) breakeven
cut-off considering metal prices, recoveries, royalties, process
and G&A costs as per LG shell parameters stated
above;
|
6.
|
The life-of-mine
(LOM) stripping ratio in tonnes is 1.52:1;
|
7.
|
All figures are
rounded to reflect the relative accuracy of the estimate. Totals
may not sum due to rounding as required by reporting
guidelines.
|
Unlocking the Exploration Potential at the Filo del Sol
Project
Due to the relative timing of the planning and start of the
2018/2019 field season in October
2018 and the completion of the PFS, the Company elected to
direct this season's resources to the evaluation of the Filo del
Sol Project's extensive exploration potential, with a focus on
drill-testing the potential for a copper porphyry system below the
current resource. Accordingly, diamond core drilling for the
2018/2019 field season began in November
2018, and was completed in March
2019, with a total of 4,747 metres completed in seven
diamond holes.
The deep drilling exploration program proved to be a success, as
the assay results related to the first two completed holes, FSDH025
and FSDH026, have been received, which confirm the presence of
significant copper-gold porphyry mineralization underlying the
oxide material at the Project, extending to depths of over 1,000
metres below surface. Again, this mineralization is outside of the
current Mineral Resource envelope and has not been included in any
study or project economics to date. Results from these first two
holes are summarized in the following table:
HOLE-ID
|
From
(m)
|
To
(m)
|
Length
(m)
|
Cu
(%)
|
Au
(g/t)
|
Ag
(g/t)
|
FSDH025
|
0.0
|
1,025.0
|
1,025.0
|
0.30
|
0.22
|
1.6
|
incl.
|
334.0
|
466.0
|
132.0
|
0.48
|
0.30
|
1.2
|
FSDH026
|
0.0
|
613.9
|
613.9
|
0.39
|
0.34
|
1.6
|
incl.
|
14.0
|
474.0
|
460.0
|
0.45
|
0.34
|
1.6
|
and incl.
|
14.0
|
94.0
|
80.0
|
0.73
|
0.43
|
1.8
|
and incl.
|
228.0
|
316.0
|
88.0
|
0.50
|
0.33
|
1.4
|
and incl.
|
420.0
|
474.0
|
54.0
|
0.49
|
0.37
|
3.3
|
The remaining assay results are anticipated to be available
shortly.
Adam Lundin, President and CEO,
commented, "Our team has always believed that we have something
special in the Filo del Sol Project, and the Company's progress
during the first quarter of 2019 truly highlights this. On the one
hand, the PFS completed in January continues to support the Filo
del Sol Project as a strong emerging project with notable size and
economic potential. Yet on the other hand, we cannot ignore the
fact that the robust project reflected by the PFS incorporates only
the oxide material of the current resource, which may just be the
tip of the iceberg, when considering the presence of significant
porphyry mineralization underneath the oxide material, as confirmed
by the Company's most recent drill program. This discovery has the
potential to be transformative for Filo Mining, and the Company
will likely pursue the undertaking of a significant drill program
next season to further define the porphyry mineralization and
unlock the value of the Filo del Sol Project for shareholders."
OUTLOOK
Considering both the results of the recently completed PFS and
the 2018/2019 drill program's confirmation that a largely undefined
sulphide system exists beneath the oxide material of the current
Mineral Resource, the Company is now evaluating its strategic
options to maximize the value of the Project for its shareholders.
Options include, but are not limited to, fast-tracking the Project
toward development or more fully testing the sulphide
mineralization before committing to the undertaking of another
engineering study at the Filo del Sol Project. That being said, the
Company continues to progress certain feasibility-level testwork,
which should facilitate to the eventual undertaking of a
feasibility study in the future, such as conducting hydrogeological
testwork to confirm an industrial source of water for the Project,
as well as ongoing environmental baseline studies.
The Company is now waiting for receipt of the assay results
related to the final 5 diamond holes of the 2018/2019 drill
program, which will be taken into consideration in planning the
next steps for the Filo del Sol Project. The final assay results
are nearing completion, with results anticipated to be available
shortly.
The Company remains open to partnership opportunities and may,
from time to time, engage in discussions with third parties. As of
the date of this MD&A, the Company does not have any binding
agreements or commitments to enter into any transactions, and there
are no assurances that such corporate activities would progress to
the stage where a potential transaction is successfully
completed.
FINANCIAL RESULTS
(In thousands of
Canadian dollars, except per share amounts)
|
|
|
|
Three months
ended
|
|
|
|
March
31,
|
|
|
|
|
2019
|
2018
|
Exploration and
project investigation
|
|
|
|
11,022
|
13,132
|
General and
administration ("G&A")
|
|
|
|
1,009
|
1,494
|
Net loss
|
|
|
|
12,092
|
14,389
|
Basic and diluted
loss per share
|
|
|
|
0.17
|
0.22
|
The financial
information in this table were selected from the Company's
condensed interim consolidated financial statements for the three
months ended March 31, 2019 (the "Financial Statements"), which are
available on SEDAR at www.sedar.com and the Company's
website www.filo-mining.com.
|
SELECTED FINANCIAL INFORMATION
|
(In thousands of
Canadian dollars)
|
|
March
31,
|
December
31,
|
|
|
2019
|
|
2018
|
Cash
|
|
1,039
|
|
2,405
|
Working capital
deficit
|
|
(5,887)
|
|
(602)
|
Mineral
properties
|
|
7,103
|
|
7,118
|
Total
assets
|
|
10,854
|
|
11,938
|
The financial
information in this table were selected from the Financial
Statements, which are available on SEDAR at www.sedar.com and
the Company's website www.filo-mining.com.
|
The Company incurred a net loss of $12.1
million during the three months ended March 31, 2019, comprised of $11.0 million and $1.0
million in exploration and project investigation costs and
G&A costs, respectively, compared to a net loss of $14.4 million for the three months ended
March 31, 2018. The variance is
primarily due to relative nature and levels of exploration activity
undertaken during the respective periods. Specifically, the larger
net loss incurred during the 2018 comparative period is due to the
higher costs associated with the undertaking of a PFS study on the
Filo del Sol Project during the period, compared to the undertaking
of a smaller exploration program in the current period.
LIQUIDITY AND CAPITAL RESOURCES
As at March 31, 2019, the Company
had cash of $1.0 million and a net
working capital deficit of $5.9
million, which includes $3.4
million drawn and outstanding against a US$ 5 million credit facility extended by Zebra
Holdings and Investments S.à.r.l. ("Zebra"), an insider of the
Company, dated February 28, 2019. As
at March 31, 2019, the Company also
had an earlier US$ 5 million credit
facility from Zebra in place, dated January
12, 2019, which matures on July 12,
2020. By comparison, as at December
31, 2018, the Company held cash of $2.4 million and a net working capital deficit of
$0.6 million.
On April 26, 2019, the Company
obtained another unsecured US$ 4.0
million short-term credit facility from Zebra, to supplement
the two aforementioned US$ 5.0
million credit facilities. As a result, the Company now has
access to US$ 14.0 million, which
will be used, as necessary, to fund ongoing exploration at the Filo
del Sol Project and for general corporate purposes. Nonetheless,
the Company continues to evaluate potential additional sources of
financing. Historically, capital requirements have been primarily
funded through equity financing, joint ventures, disposition of
mineral properties and investments, and the use of short-term
credit facilities. Management is confident that additional sources
of funding will be secured to fund planned expenditures for at
least twelve months from March 31,
2019.
About Filo Mining
Filo Mining is a Canadian exploration and development company
focused on advancing its 100% owned Filo del Sol copper-gold-silver
deposit located in Chile's Region
III and adjacent San Juan Province, Argentina. The Company's shares are listed on
the TSX-V and on Nasdaq First North under the symbol "FIL". Filo
Mining is a member of the Lundin Group of Companies.
Qualified Person
The scientific and technical disclosure for the Filo del Sol
Project included in this news release have been reviewed and
approved by Bob Carmichael, P. Eng.
(BC) and/or James Beck, B.A.Sc.,
P.Eng. Mr. Carmichael is Filo Mining's Vice-President of
Exploration and a Qualified Person under National Instrument 43-101
Standards of Disclosure for Mineral Projects ("NI43-101").
Mr. Beck is Filo Mining's Vice-President of Corporate Development
and Projects and is also a Qualified Person under NI43-101.
Additional information
The technical information relating to the PFS is based on a
technical report titled "NI 43-101 Technical Report,
Pre-feasibility Study for the Filo del Sol Project" dated
February 22, 2019, with an effective
date of January 13, 2019 (the
"Technical Report"). The Technical Report was prepared for Filo
Mining by Ausenco Engineering Canada Inc. ("Ausenco"). The
Qualified Persons, as defined under NI 43-101, responsible for the
Technical Report are Scott Elfen, P.E., Ausenco, Robin Kalanchey, P.Eng., Ausenco, Bruno Borntraeger, P.Eng., Knight Piesold Ltd.,
Fionnuala Devine, P.Geo., Merlin
Geosciences Inc., Ian Stillwell, BGC
Engineering Inc., Neil Winkelmann,
FAusIMM, SRK Consulting (Canada)
Inc., James N. Gray, P.Geo.,
Advantage Geoservices Limited, and Jay
Melnyk, P.Eng., AGP Mining Consultants, all of whom are
independent of Filo Mining. The Technical Report is available for
review under the Company's profile on SEDAR at www.sedar.com and on
the Company's website at www.filo-mining.com.
The Company's condensed interim consolidated financial
statements for the three months ended March
31, 2019 and related management's discussion and analysis
are available on the Company's website at www.filo-mining.com or
under its profile on SEDAR at www.sedar.com.
Filo Mining is listed on the TSX-V and Nasdaq First North
Exchange under the trading symbol "FIL". Pareto Securities AB is
the Company's Certified Adviser on Nasdaq First North.
This information was submitted by Filo Mining Corp. for
publication, through the agency of the contact person set out
below, on May 8, 2019 at 5:00 pm Pacific time.
On behalf of the board of directors of Filo Mining,
Adam Lundin, President and
CEO
Filo Mining Corp.
Cautionary Note Regarding Forward-Looking Statements
Certain statements made and information contained herein in this
press release constitutes "forward-looking information" and
forward-looking statements" within the meaning of applicable
securities legislation (collectively, "forward-looking
information") concerning the business, operations, financial
performance and condition of Filo Mining. The forward-looking
information contained in this press release is based on information
available to the Company as of the date of this press release.
Except as required under applicable securities legislation, the
Company does not intend, and does not assume any obligation, to
update this forward-looking information. Generally, any
statements that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance, (often, but not
always, identified by words or phrases such as "plans", "expects"
or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "projects" , "estimates",
"budgets", "scheduled", "forecasts", "assumes", "intends",
"strategy", "goals", "objectives", "potential", "possible",
"anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or statements that certain
actions, events, conditions or results "will", "may", "could",
"would", "should", "might" or "will be taken", "will occur" or
"will be achieved" or the negative connotations thereof and similar
expressions) are not statements of historical fact and may be
forward-looking statements.
All statements other than statements of historical fact may be
forward-looking statements. Forward-looking information is
necessarily based on estimates and assumptions that are inherently
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of the Company to be materially different from
those expressed or implied by such forward-looking information,
including but not limited to: risks and uncertainties relating to,
among other things, the inherent uncertainties regarding mineral
reserve and resource estimates, cost estimates, changes in
commodity prices, currency fluctuation, financings, unanticipated
resource grades, infrastructure, results of exploration activities,
cost overruns, availability of materials and equipment, timeliness
of government approvals, taxation, political risk and related
economic risk and unanticipated environmental impact on operations
as well as other risks, and uncertainties and other factors,
including, without limitation, those referred to in the "Risks and
Uncertainties" section of the Company's most recent MD&A and/or
Annual Information Form, under the heading "Risks Factors", and
elsewhere, which may cause the actual results, level of activity,
performance or achievements of the Company to be materially
different from those expressed or implied by such forward-looking
information.
The Company believes that the expectations reflected in the
forward-looking information included in this press release are
reasonable but no assurance can be given that these expectations
will prove to be correct and such forward-looking information
should not be unduly relied upon. Information contained in
this press release is as of the date of this press release.
In particular, this press release contains forward-looking
information pertaining to the assumptions used in the PFS for the
Filo del Sol project, the assumptions used in the mineral reserves
and resources estimates for the Filo del Sol project, including,
but not limited to, geological interpretation, grades, metal price
assumptions, metallurgical and mining recovery rates, geotechnical
and hydrogeological conditions, as applicable; ability to develop
infrastructure; assumptions made in the interpretation of drill
results, geology, grade and continuity of mineral deposits;
expectations regarding access and demand for equipment, skilled
labour and services needed for exploration and development of
mineral properties; and that activities will not be adversely
disrupted or impeded by exploration, development, operating,
regulatory, political, community, economic and/or environmental
risks. In addition, this press release contains
forward-looking information pertaining to the undertaking of
and timing for the completion of a Feasibility Study or a
feasibility-level study; potential results of further metallurgical
testwork; ability to secure additional financing and/or the quantum
and terms thereof; exploration and development plans and
expenditures; the timing and nature of studies and any potential
development scenarios; opportunities to improve project economics;
the success of future exploration activities; potential for
resource expansion; potential for the discovery of new mineral
deposits; ability to build shareholder value; expectations with
regard to adding to mineral reserves or resources through
exploration; expectations with respect to the conversion of
inferred resources to an indicated resources classification;
ability to execute planned work programs; estimation of commodity
prices, mineral reserves and resources, costs, and permitting time
lines; ability to obtain surface rights and property interests;
currency exchange rate fluctuations; requirements for additional
capital; government regulation of mining activities; environmental
risks; unanticipated reclamation expenses; title disputes or
claims; limitations on insurance coverage; and other risks
and uncertainties.
Forward-looking information is based on certain assumptions that
the Company believes are reasonable, including that the current
price of and demand for commodities will be sustained or will
improve, the supply of commodities will remain stable, that the
general business and economic conditions will not change in a
material adverse manner, that financing will be available if and
when needed on reasonable terms and that the Company will not
experience any material labour dispute, accident, or failure of
plant or equipment. These factors are not, and should not be
construed as being, exhaustive. Although the Company has
attempted to identify important factors that would cause actual
results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated, or intended.
There can be no assurance that such statements will prove to be
accurate, as the Company's actual results and future events could
differ materially from those anticipated in such statements, as a
result of the factors discussed in the "Risk and Uncertainties"
section of the Company's most recent management's discussion and
analysis and elsewhere and in the "Risk Factors" section in the
Company's most recent Annual Information Form, which are available
under the Company's profile on SEDAR at www.sedar.com. All of
the forward-looking information contained in this document is
qualified by these cautionary statements. Readers are
cautioned not to place undue reliance on forward-looking
information due to the inherent uncertainty thereof.
Statements relating to "mineral resources" are deemed to be
forward looking information, as they involve the implied
assessment, based on certain estimates and assumptions, that the
mineral resources described can be profitably produced in the
future.
Neither the 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 news release
SOURCE Filo Mining Corp.