VANCOUVER, March 19, 2019 /CNW/ - Filo Mining Corp.
(TSX-V and Nasdaq First North: FIL) ("Filo Mining" or the
"Company") is pleased to announce its results for year ended
December 31, 2018.
Please view PDF version of News Release.
HIGHLIGHTS
The Company had another milestone year in 2018, which centered
on the support and undertaking of a pre-feasibility study ("PFS")
at the Filo del Sol Project (the "Project") managed by Ausenco
Engineering Canada Inc. The PFS was completed shortly after year
end, with an effective date of January 13,
2019, and the results support the Company's ongoing
assertions that the Filo del Sol Project holds considerable size,
robust economics, and even further upside potential, particularly
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.
|
Due to the timing of completion of the PFS in January 2019 relative to the start of the
Project's 2018/2019 field season in October
2018, the Company's design of the current field program was
double pronged: begin addressing certain anticipated informational
requirements for a future feasibility study, such as
hydrogeological testwork and ongoing environmental assessments, and
secondly, test the extensive exploration potential of the Project.
With respect to the latter, the Company began drilling in
November 2018, with a focus on
drilling deeper diamond core holes to test the prospectivity of a
potential copper porphyry system below the current resource. Assay
results of the first two holes completed were released on
March 18, 2019, and confirm the
existence of significant porphyry copper-gold mineralization
beneath the current Mineral Resource to depths of over 1,000
metres. The holes, which both end in mineralization and are open to
depth and laterally, are summarized in the table below:
HOLE-ID
|
From
(m)
|
To
(m)
|
Length
(m)
|
Cu
%
|
Au
g/t
|
Ag
g/t
|
FSDH025
|
0.0
|
1025.0
|
1025.0
|
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
|
Remarking on the year, Adam
Lundin, President and CEO, commented, "The Company set an
ambitious plan for the advancement of the Filo del Sol Project in
2018, and we are proud to present the completed PFS as a result.
The PFS improves upon previous project economics and continues to
showcase the project's remarkable potential. What's more, our
current exploration program has recently yielded some exciting
results, which confirm the presence of significant porphyry
copper-gold mineralization beneath the oxide resource and the
Company's long-time speculation that the oxide material on which
the PFS is based is only the tip of the iceberg at the project. The
Company is looking forward to another exciting year as we continue
to build shareholder value at Filo Mining."
OUTLOOK
The Company is now analyzing the results and recommendations
arising from the PFS to assess its next steps with respect to
advancing the project, which may include the undertaking of a
feasibility-level study, as appropriate. That being said, the
Company also remains cognisant of the fact that all studies and
economic analyses completed to date on the Filo del Sol Project
incorporate only the oxide portion of the current resource. With a
largely undefined sulphide resource underlying the oxide material,
as well as the Company's considerable land package, of which less
than 20% has been explored to date, the Company elected to
simultaneously dedicate some resources to test the exploration
potential at the Filo del Sol Project during the 2018/2019 field
season currently underway.
Accordingly, diamond core drilling began at the Filo del Sol
Project in November 2018, with a
focus on evaluating the sulphide mineralization, which sits below
the oxide layers of the current deposit. The first batch of assay
results related to the first two holes of this drill campaign were
received and released on March 18,
2018, and confirm the existence of a much larger copper-gold
porphyry system underlying the current Mineral Resource as
incorporated into the PFS. The first two holes, which end in
mineralization, are highlighted respectively by 1,025 metres at
0.30% copper, 0.22 g/t gold, and 1.6 g/t silver, and 613.9 metres
0.39% copper, 0.34 g/t gold, and 1.6 g/t silver.
Assays are in progress for a third completed hole, and diamond
drilling continues at the Filo del Sol Project with four additional
diamond holes as part of the 2018/2019 field campaign, scheduled
for completion by the end of March
2019. Additional assays will be released as they become
available.
FINANCIAL RESULTS
(In thousands of
Canadian dollars, except per share amounts)
|
|
|
Three months
ended
|
Year
ended
|
|
|
December
31,
|
December
30,
|
|
|
2018
|
2017
|
2018
|
2017
|
Exploration and
project investigation
|
|
5,183
|
3,605
|
24,118
|
15,019
|
General and
administration ("G&A")
|
|
1,019
|
959
|
4,958
|
3,690
|
Net loss
|
|
6,191
|
4,580
|
28,891
|
18,695
|
Basic and diluted
loss per share
|
|
0.09
|
0.07
|
0.41
|
0.30
|
The financial
information in this table were selected from the Company's
consolidated financial statements for the year ended December 31,
2018 (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,
|
|
|
2018
|
|
2017
|
Cash
|
|
2,405
|
|
2,417
|
Working capital
(deficit)
|
|
(602)
|
|
1,462
|
Mineral
properties
|
|
7,118
|
|
6,479
|
Total
assets
|
|
11,938
|
|
10,193
|
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 $28.9
million during the year ended December 31, 2018, comprised of $24.1 million and $5.0
million in exploration and project investigation costs and
G&A costs, respectively, compared to a net loss of $18.7 million for the year ended December 31, 2017. 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 2018 is due to the higher costs associated with the
undertaking of a PFS study on the Filo del Sol Project during the
period, which is a more advanced, detailed and costly study as
compared to the preliminary economic assessment that was in
progress during 2017.
LIQUIDITY AND CAPITAL RESOURCES
As at December 31, 2018, the
Company had cash of $2.4 million and
a net working capital deficit of $0.6
million, which includes $2.2
million drawn and outstanding against a short-term credit
facility (the "Initial Facility"), compared to cash of $2.4 million and net working capital of
$1.5 million, as at December 31, 2017.
Despite having raised net proceeds totaling $24.4 million during 2018 from tandem equity
offerings, as at December 31, 2018,
this cash inflow has been more than offset by funds directed
towards advancing the Filo del Sol Project through the PFS as
highlighted above, funding of the current 2018/2019 field program
which began in October 2018, and to a
lesser extent, $0.5 million spent in
relation to the annual option payment made for the Tamberias
property in June 2018 and funds spent
for general corporate purposes.
On January 12, 2019, the Company
obtained an unsecured US$ 5.0 million
credit facility (the "Replacement Facility"), which replaced the
Initial Facility, and into which any outstanding balance owed by
the Company under the Initial Facility was transferred. In
addition, on February 28, 2019, the
Company obtained an additional unsecured US$
5.0 million short-term credit facility (the "Additional
Facility"). As a result, the Company has secured access to a total
of US$ 10.0 million in funds, which
will provide the Company with financial flexibility to fund ongoing
activities 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 December 31, 2018.
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.
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 consolidated financial statements for the year
ended December 31, 2018 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 19, 2019 at
4:30 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") 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.