FILO MINING REPORTS 2017 RESULTS
Filo Mining Corporation (TSX-V:FIL)(Nasdaq
First North:FIL) ("Filo Mining" or the "Company") is pleased to
announce its results for year ended December 31, 2017.
HIGHLIGHTS
During 2017, Filo Mining achieved several key
project milestones at Filo del Sol, which include:
- An update to the Mineral Resource estimate at Filo del Sol,
which achieved a 98% conversion rate of Inferred material to the
Indicated category and resulted in an overall 61% increase to the
Mineral Resource. The updated Mineral Resource estimate, effective
July 1, 2017, is comprised of 373 million tonnes Indicated, plus
239 million tonnes Inferred, containing an estimated 2.8 billion
pounds of copper, 4.0 million ounces of gold and 109.9 million
ounces of silver in the Indicated category, and an estimated 1.4
billion pounds of copper, 2.5 million ounces of gold and 60.0
million ounces of silver in the Inferred category;
- The completion of the second phase of metallurgical testwork,
which further refined recovery estimates for gold oxide and
copper-gold oxide material from the main Filo del Sol deposit, and
provided critical data for a Preliminary Economic Assessment
(“PEA”) of the Filo del Sol Project. The results of the
metallurgical testwork also highlighted opportunities, such as the
fast leach kinetics of oxide material and the water soluble nature
of the copper, which will be analyzed further in the next stage of
work; and
- The completion of a PEA of the Filo del Sol Project,
incorporating the updated Mineral Resource estimate, open-pit
mining, and heap leach processing of only the oxide portions of the
Mineral Resource. The results of the PEA demonstrate a robust
project with strong economics, highlighted by an estimated
after-tax NPV of US$ 705 million using a discount rate of 8% and an
IRR of 23%, with an average estimated annual life of mine
production of approximately 50,000 tonnes of copper, 115,000 ounces
of gold, and over 5 million ounces of silver.
The reader is advised that the PEA study results
in this press release are only intended to provide an initial,
high-level summary of the project. The PEA is preliminary in nature
and includes the use of inferred mineral resources, which are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as mineral reserves and there is no certainty that PEA
results will be realized. Mineral resources are not mineral
reserves and do not have demonstrated economic viability.
Commenting on the year’s achievements, Adam
Lundin, President and CEO, stated, “2017 was an exciting and
eventful year for Filo Mining, as we made significant advances in
evaluating the potential of our flagship project. We ended the year
on a positive note, with the publication of a PEA on Filo del Sol,
which demonstrated robust project economics, based only on the
oxide portion of the Mineral Resource. With recently having closed
a bought-deal common share offering and concurrent private
placement for gross proceeds of $25.5 million, we are now well
funded to continue momentum at Filo del Sol, as we finish the
2017/2018 field work and move into to the preparation of a
Pre-Feasibility Study.”
OUTLOOK
In November 2017, the Company initiated the work
program at the Filo del Sol Project for the 2017/2018 field season,
which coincides with the South American summer. This program is
based on recommendations from the PEA and will collect the data
required to support the undertaking of a Pre-Feasibility Study
(“PFS”), which was launched in January 2018, and is targeted for
completion by the first quarter of 2019. The Company has engaged
Ausenco Engineering Canada Inc. to lead the PFS.
The current design of the field work program
includes reverse circulation and diamond drilling for resource
conversion, metallurgical sample collection and geotechnical
information, as well as infrastructure site investigations and
ongoing metallurgical and environmental studies. In addition, the
PEA highlighted several opportunities for unlocking value at the
Filo del Sol Project, which will be explored by the Company during
the PFS, such as:
- Evaluating unique processing opportunities to take advantage of
the fast leach kinetics noted in metallurgical testwork completed
to date, which could reduce project capital by recovering soluble
copper through installing a conventional washing system for process
feed after the crushing circuit. Further study of this option is
planned and, if successful, the washing stage could eliminate the
permanent copper and on/off leach pads and their associated
materials handling systems, saving on capital and operating costs
associated with these installations;
- Optimizing the mine plan and production schedules by evaluating
opportunities to smooth production and bring forward copper
revenues;
- Increasing metallurgical recoveries with further test work and
optimization; and
- Delineating more or higher-grade material through continued
exploration on the Company's extensive land package. The deposit
remains open in most directions with several additional exploration
targets outside of the immediate deposit area that have seen only
preliminary exploration work. In addition, there are areas to cover
near the deposit that have not been drill tested and are
prospective for additional discoveries.
With the recently completed PEA and a PFS
currently underway on the Filo del Sol Project, together with a
treasury replenished by the $25.5 million financings discussed
above, the Company is well position to make strides towards
advancing the Filo del Sol Project. The results of the PFS will
guide the direction taken by the Company with respect to the Filo
del Sol Project and may lead to further advanced studies of the
Project.
FINANCIAL RESULTS
(In thousands of Canadian dollars, except per
share amounts)
|
|
Three months ended |
Year ended |
|
|
December 31, |
December 31, |
|
|
2017 |
2016 |
2017 |
2016 |
Exploration and project
investigation |
|
3,605 |
4,403 |
15,019 |
6,477 |
General and administration
(“G&A”) |
|
959 |
976 |
3,690 |
2,183 |
Net loss |
|
4,580 |
5,297 |
18,695 |
8,666 |
Basic
and diluted loss per share |
|
0.07 |
0.09 |
0.30 |
0.16 |
The financial information in this table were
selected from the Company’s consolidated financial statements for
the year ended December 31, 2017 (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)
|
December 31, |
December 31, |
|
|
2017 |
|
2016 |
Cash |
|
2,417 |
|
19,465 |
Working capital |
|
1,462 |
|
17,653 |
Mineral properties |
|
6,479 |
|
6,091 |
Total
assets |
|
10,193 |
|
26,151 |
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 $18.7 million
during the year ended December 31, 2017, comprised of $15.0 million
and $3.7 million in exploration and project investigation costs and
G&A costs, respectively, compared to a net loss of $8.7 million
for the year ended December 31, 2016. The variance is primarily due
to relative levels of exploration activity undertaken during the
respective periods. Specifically, the larger net loss in 2017 is
due to the execution of a larger exploration program during the
2016/2017 exploration season and, to a lesser extent, higher costs
related to engineering and conceptual studies incurred as a result
of the undertaking and completion of the PEA during the year ended
December 31, 2017.
LIQUIDITY AND CAPITAL
RESOURCES
As at December 31, 2017, the Company had cash of
$2.4 million and net working capital of $1.5 million, compared to
cash of $19.5 million and net working capital of $17.7 million as
at December 31, 2016. The decrease in the Company’s cash and net
working capital is due primarily to funds directed towards
advancing the Filo del Sol Project, and to a lesser extent, funds
spent for general corporate purposes. This has been partially
offset by the receipt of approximately $1.0 million as proceeds
from the exercise of share options during the year.
On January 12, 2018, the Company obtained a
short-term credit facility with an insider of the Company, which
enabled access to up to US$ 2.0 million in short-term credit (the
“Facility”), to provide additional financial flexibility to fund
ongoing exploration at the Filo del Sol Project and general
corporate purposes. As consideration, the lender was entitled to
6,000 common shares of the Company upon execution of the Facility
and will be issued an additional 300 common shares each month for
every US$ 50,000 in principal outstanding on the Facility, prorated
accordingly for the number of days outstanding. There is no
interest payable in cash during the term of the Facility, and all
common shares issued in conjunction with the Facility are subject
to a four-month hold period under applicable securities laws. As of
March 19, 2018, the Company has issued a total of 12,300 common
shares to the lender as consideration for providing the Facility to
the Company, in lieu of cash fees. The Facility remains available
until January 12, 2019.
On February 28, 2018, the Company closed the
aggregate sale of 9,823,195 common shares of the Company pursuant
to a bought deal common share offering and a concurrent
non-brokered private placement for gross proceeds of approximately
$25.5 million. A portion of the net proceeds received were used to
repay all amounts drawn to date under the Facility, and the Company
plans to use the remaining net proceeds for exploration and
development work at the Filo del Sol Project, and for working
capital and general corporate purposes.
About Filo Mining
Filo Mining is a Canadian mineral exploration
company which holds a 100% interest in the Filo del Sol Project on
the border of Argentina's San Juan Province and Chile's adjacent
Region III. Filo del Sol is located between the prolific Maricunga
and El Indio Gold Belts, two major mineralized trends that contain
such deposits as Caspiche, La Coipa, Veladero, and El Indio. The
region is mining-friendly and hosts a number of large-scale mining
operations. The project area is covered under the Mining
Integration and Complementation Treaty between Chile and Argentina,
which provides the framework for the development of cross border
mining projects. Built on a foundation of experienced management
and focused on advancing exploration projects in Chile and
Argentina, Filo Mining is well positioned to build shareholder
value through discovery and resource development.
Additional information
The Filo del Sol Project, the Mineral Resource
estimate, and the PEA are described in a Technical Report titled
“Independent Technical Report for a Preliminary Economic Assessment
on the Filo del Sol Project, Region III, Chile and San Juan
Province, Argentina” dated December 18, 2017, with an effective
date of November 6, 2017 (the “Technical Report”), which was
prepared for Filo Mining by SRK Consulting (Canada) Inc (“SRK”).
The Qualified Persons, as defined under NI 43-101, responsible for
the Technical Report are Fionnuala Devine, P. Geo., Merlin
Geosciences Inc., Carl E. Defilippi, RM SME, Kappes, Cassiday &
Associates, Giovanni Di Prisco, PhD., P.Geo., Terra Mineralogical
Services Inc., James N. Gray, P. Geo., Advantage Geoservices
Limited, Robert McCarthy, P. Eng., SRK, Cameron Scott, P. Eng.,
SRK, and Neil Winkelmann, FAusIMM, SRK, 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 consolidated financial statements
for the year ended December 31, 2017 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 March 20, 2018 at 2:30 p.m. 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” or “forward-looking statements”) 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 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 statements and 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 statements and information should not be unduly
relied upon. This statement and information is as of the date
of the press release. In particular, this press release
contains forward-looking statements or information pertaining to
the assumptions used in the PEA for the Filo del Sol project, the
assumptions used in the mineral 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 statements or
information pertaining to the anticipated undertaking of and
timing for the completion of a Pre-Feasibility Study; expected
timing or 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 resources through exploration;
expectations with respect to the conversion of inferred resources
to an indicated resources classification; ability to execute the
Planned Work programs; estimation of commodity prices, mineral
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 actual results and future events could differ
materially from those anticipated in such statements. 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.
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