(All dollar amounts are in U.S. dollars (“$”)
unless otherwise specified)
Ascendant Resources Inc. (TSX: ASND) (OTCQX:
ASDRF; FRA: 2D9) ("Ascendant" or the "Company”) reports fourth
quarter and full year 2018 results, highlighted by record grades of
7% zinc equivalent (“ZnEq”) in the fourth quarter and total
contained metal production of 91.4 million ZnEq pounds for the full
year of 2018. For 2018, the Company achieved adjusted EBITDA of
$13.49 million and net income of $3.01 million, or earnings per
share of $0.04, in its first year of normalized operations at the
El Mochito mine in Honduras. Operations are well positioned for
further improvements driven by higher-grades, as demonstrated by
2019 guidance.
President and CEO Chris Buncic stated: “We are
very pleased with the continued improvement achieved at El Mochito
in 2018. Throughout this first year of normalized operations, the
mine has demonstrated its ability to sustain elevated production
levels and deliver improved head grades as demonstrated by record
grades in the fourth quarter, a testament of efforts to strictly
control dilution at the mine. A strong fourth quarter has paved the
way for greater production growth in 2019, with mean guidance up
10% over 2018 production levels.”
He continued, “While we remain optimistic with
metals prices, which have already shown improvement thus far in
2019, the Company remains focused on long-term profitability and
looks forward to continuing to drive value creation through further
growth in production with a continued emphasis on improved grades.
In addition, the Company continues to advance the expansion project
at El Mochito while growing the resource base and is very excited
to continue progressing the Lagoa Salgada project in Portugal.”
A summary of key operational and
financial performance for the fourth quarter and full year 2018 is
provided in the tables below:
|
|
|
|
Three Months Ended |
Year Ended |
|
Key Operating Information |
|
|
December 31, |
December 31, |
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
Total Tonnes Mined |
|
tonnes |
|
187,533 |
|
|
197,303 |
|
|
758,067 |
|
|
657,287 |
|
|
|
|
|
|
|
|
- |
|
|
|
|
Total Tonnes Milled |
|
tonnes |
|
184,913 |
|
|
198,354 |
|
|
756,034 |
|
|
656,291 |
|
|
|
|
|
|
|
|
- |
|
|
|
|
Average Head Grades |
|
|
|
|
|
|
|
|
Average
Zn grade |
|
% |
|
4.2 |
% |
|
3.7 |
% |
|
4.3 |
% |
|
3.5 |
% |
|
|
Average
Pb grade |
|
% |
|
1.9 |
% |
|
1.4 |
% |
|
1.7 |
% |
|
1.4 |
% |
|
|
Average
Silver grade |
|
g/t |
|
77 |
|
|
34 |
|
|
54 |
|
|
42 |
|
|
|
ZnEq
Head grade |
(1 |
) |
% |
|
7.0 |
% |
|
5.3 |
% |
|
6.5 |
% |
|
5.4 |
% |
|
|
|
|
|
|
|
|
|
|
Average Recoveries |
|
|
|
|
|
|
|
|
Zinc |
|
% |
|
84.1 |
% |
|
88.5 |
% |
|
88.0 |
% |
|
88.9 |
% |
|
|
Lead |
|
% |
|
77.6 |
% |
|
74.6 |
% |
|
77.8 |
% |
|
74.2 |
% |
|
|
Silver |
|
% |
|
76.6 |
% |
|
75.0 |
% |
|
77.9 |
% |
|
77.4 |
% |
|
|
|
|
|
|
|
- |
|
|
|
|
Contained Metal Production |
|
|
|
|
|
|
|
|
Zinc |
|
000's
lbs |
|
14,435 |
|
|
14,133 |
|
|
62,658 |
|
|
45,054 |
|
|
|
Lead |
|
000's
lbs |
|
6,023 |
|
|
4,556 |
|
|
21,810 |
|
|
14,905 |
|
|
|
Silver |
|
ozs |
|
347,251 |
|
|
169,039 |
|
|
1,001,514 |
|
|
698,506 |
|
|
|
ZnEq |
(1 |
) |
000's
lbs |
|
23,173 |
|
|
19,576 |
|
|
91,429 |
|
|
66,120 |
|
|
|
|
|
|
|
|
- |
|
|
|
|
Payable Production |
|
|
|
|
|
|
|
|
Zinc |
0.85 |
|
000's
lbs |
|
12,270 |
|
|
12,013 |
|
|
53,259 |
|
|
38,296 |
|
|
|
Lead |
0.95 |
|
000's
lbs |
|
5,722 |
|
|
4,328 |
|
|
20,719 |
|
|
14,159 |
|
|
|
Silver |
0.7 |
|
ozs |
|
243,076 |
|
|
118,327 |
|
|
701,060 |
|
|
488,954 |
|
|
|
ZnEq |
(1 |
) |
000's
lbs |
|
19,697 |
|
|
16,640 |
|
|
77,715 |
|
|
56,202 |
|
|
|
|
|
|
|
|
- |
|
|
|
|
Payable Metal Sold |
|
|
|
|
|
|
|
|
Zinc |
|
000's
lbs |
|
14,636 |
|
|
11,007 |
|
|
55,427 |
|
|
35,626 |
|
|
|
Lead |
|
000's
lbs |
|
5,231 |
|
|
6,191 |
|
|
22,466 |
|
|
12,075 |
|
|
|
Silver |
|
ozs |
|
243,413 |
|
|
162,619 |
|
|
782,960 |
|
|
460,980 |
|
|
|
ZnEq |
(1 |
) |
000's
lbs |
|
21,511 |
|
|
17,599 |
|
|
81,871 |
|
|
50,725 |
|
|
|
|
|
|
|
|
- |
|
|
|
|
Average Realized Metal Price |
|
|
|
|
|
|
|
|
Zinc |
|
$/lb |
$ |
1.18 |
|
$ |
1.46 |
|
$ |
1.31 |
|
$ |
1.36 |
|
|
|
Lead |
|
$/lb |
$ |
0.89 |
|
$ |
1.13 |
|
$ |
1.00 |
|
$ |
1.06 |
|
|
|
Silver |
|
$/oz |
$ |
14.51 |
|
$ |
16.99 |
|
$ |
15.34 |
|
$ |
17.17 |
|
|
|
|
|
|
|
|
- |
|
|
|
|
Cash operating cost per ZnEq payable lb
sold |
(2 |
) |
$/ZnEq
lb |
$ |
0.83 |
|
$ |
1.03 |
|
$ |
0.79 |
|
$ |
1.05 |
|
|
AISC per ZnEq payable lb sold |
(2 |
) |
$/ZnEq
lb |
$ |
1.28 |
|
$ |
1.54 |
|
$ |
1.31 |
|
$ |
1.62 |
|
|
Direct operating cost per tonne milled (excl.
CAPEX) |
(2 |
) |
$/tonne |
$ |
85.38 |
|
$ |
80.13 |
|
$ |
78.98 |
|
$ |
88.22 |
|
|
(1 |
) |
Assumes average spot
metal prices for the period. |
|
|
|
|
|
|
|
(2 |
) |
This is a
non-IFRS performance measure, see Non-IFRS Performance Measures
section of the MD&A. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Year Ended |
|
Financial |
|
|
December 31, |
December 31, |
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
Total revenue |
|
$000's |
|
21,564 |
|
|
23,934 |
|
|
85,618 |
|
|
59,199 |
|
|
|
Mine operating
expenses |
|
$000's |
|
22,009 |
|
|
20,336 |
|
|
74,162 |
|
|
59,248 |
|
|
|
Income (loss) from
mining operations |
|
$000's |
|
(444 |
) |
|
3,598 |
|
|
11,456 |
|
|
(49 |
) |
|
|
Net income (loss) |
|
$000's |
|
(3,020 |
) |
|
(1,429 |
) |
|
3,005 |
|
|
(12,057 |
) |
|
|
Adjusted EBITDA |
(2 |
) |
$000's |
|
(115 |
) |
|
2,280 |
|
|
13,492 |
|
|
(2,496 |
) |
|
|
Operating cash flow
before movements in working capital |
(2 |
) |
$000's |
|
(187 |
) |
|
594 |
|
|
10,868 |
|
|
(5,827 |
) |
|
|
Operating cash
flow |
|
$000's |
|
(273 |
) |
|
5,825 |
|
|
16,276 |
|
|
(6,467 |
) |
|
|
Cash and cash
equivalents |
|
$000's |
|
3,808 |
|
|
8,041 |
|
|
3,808 |
|
|
8,041 |
|
|
|
Working capital |
|
$000's |
|
(7,110 |
) |
|
12,506 |
|
|
(7,110 |
) |
|
12,506 |
|
|
|
Capital
Expenditures |
|
$000's |
|
3,620 |
|
|
5,077 |
|
|
21,943 |
|
|
13,445 |
|
|
(1 |
) |
Assumes average spot
metal prices for the period. |
|
|
|
|
|
|
|
(2 |
) |
This is a
non-IFRS performance measure, see Non-IFRS Performance Measures
section of the MD&A. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year and Fourth Quarter 2018 Operational
Performance
During the fourth quarter 2018, contained ZnEq
metal production was 23.2 million pounds, an 18% increase over
fourth quarter 2017 production of 19.6 million pounds and
relatively in-line with third quarter 2018 production of 23.9
million pounds. Contained metal production for the full year 2018
totalled 91.4 million pounds of ZnEq metal, in-line with the
Company’s revised production guidance. This comprised of 62.7
million pounds of zinc, 21.8 million pounds of lead and just over
one million ounces of silver. Overall production represents a 38%
increase over 2017 contained metal production of 66.1 million
pounds of ZnEq.
Milled production for the fourth quarter 2018
was 184,913 tonnes, representing a slight decrease of 4% over the
previous quarter of 191,738 tonnes and a decrease of 7% over the
fourth quarter 2017 of 198,354 tonnes. Milled throughput for the
year was 756,034 tonnes, an increase of 15% over 2017 milled
throughput of 656,291 tonnes.
In the fourth quarter 2018, the Company achieved
a record ZnEq head grade of 7.0%, a 32% increase over the fourth
quarter 2017 head grade of 5.3% ZnEq and a 4% increase over the
6.7% ZnEq achieved in the third quarter 2018. The main driver
behind the increase in ZnEq grades were the silver grades, which
increased to 77 g/t, a 126% increase over the 34 g/t achieved in
the fourth quarter 2017 and a 71% increase over the 45 g/t in the
third quarter 2018. The significantly higher silver grades are a
result of an increased focus on dilution control and the increase
in conventional mining of narrow, high-grade areas in the mine.
Zinc grades of 4.2% were slightly lower compared to the previous
quarter of 4.5%, while lead grades of 1.9% showed a 12% increase
over the 1.7% achieved in the previous quarter. As the Company
heads into 2019, we expect to continue to focus on newly defined
zones of higher-grade mineralization to support higher overall
metal production rates. The average head grade for the full year
2018 was 6.5% ZnEq, an increase of 20% over the average head grade
of 5.4% in 2017. Note that conventional mining techniques generally
have a higher cost per tonne mined, but with higher head grades,
can translate into an improved cost structure based on a cost per
pound payable metal basis.
Zinc recovery for the fourth quarter was 84.1%,
down 5% and 4% against fourth quarter 2017 and third quarter 2018
respectively. Recoveries for lead and silver were 77.6% and 76.6%
respectively, consistent with previous performance.
For the full year 2018, recoveries averaged
88.0% for zinc, 77.8% for lead and 77.9% for silver. The lower than
expected zinc recoveries in the fourth quarter are attributable to
the more complex metallurgy seen in some of the higher-grade ore
bodies. The Company’s metallurgical team is evaluating potential
solutions to this challenge.
Full Year and Fourth Quarter 2017
Financial Performance
Financial results for the three months ended
December 31, 2018 with 21.5 million zinc equivalent pounds sold
resulted in a loss from mining operations of $0.44 million. For the
whole of 2018, the Company sold a total of 81.9 million zinc
equivalent pounds realizing income from mining operations of $11.46
million. Average realized metal prices for the quarter were $1.18
per pound of zinc, $0.89 per pound of lead and $14.51 per ounce of
silver and for the year were $1.31 per pound of zinc, $1.00 per
pound of lead and $15.34 per ounce of silver.
The Company generated revenues of $21.56 million
in the fourth quarter 2018 as a result of the sale of 21.5 million
pounds of ZnEq metal, comprised of 14.6 million pounds of payable
zinc in concentrates, 5.2 million pounds of payable lead in
concentrates and 243,413 ounces of payable silver in concentrates.
Revenues for the quarter were down 10% over the fourth quarter
2017, yet up 61% from the third quarter 2018, as a result of the
fluctuation in metal prices for the comparative quarters. Total
revenue for 2018 was $85.62 million, an increase of 45% over total
revenues of $59.20 million in 2017.
Net loss and basic and diluted loss per share in
fourth quarter 2018 were $3.02 million and $0.04 respectively,
compared to $1.43 million and $0.02 in the fourth quarter 2017, and
$3.85 million and $0.05 respectively in the third quarter 2018.
Loss from mining operations for the quarter was $0.44 million. Net
income for 2018 was $3.01 million, or a basic and diluted earnings
per share of $0.04, compared to a net loss of $12.06 million, or a
basic and diluted loss per share of $0.18 for 2017.
Adjusted EBITDA for the fourth quarter 2018
resulted in a loss of $0.12 million, compared to positive adjusted
EBITDA of $2.28 million in the fourth quarter 2017 and a loss in
the third quarter 2018 of $1.73 million. Adjusted EBITDA for 2018
totalled $13.49 million, compared to adjusted EBITDA of negative
$2.50 million for 2017. The cash balance exiting 2018 was $3.81
million.
Direct operating costs per tonne milled for the
fourth quarter 2018 at El Mochito were $85.38, a 7% increase vs
fourth quarter 2017 direct operating costs per tonne milled of
$80.13, and a 5% increase vs third quarter 2018 direct operating
costs per tonne milled of $81.66. Direct operating costs per tonne
increased in the latter part of the calendar year, primarily
impacting the fourth quarter, due to the increased national power
rates which took effect in September, and the increase in labour
costs as a result of the 6% wage increase in compliance with the
collective bargaining agreement with the unionized workforce at the
mine that took place in the fourth quarter. Also contributing to
the higher operating costs per tonne this quarter was the increased
proportion of conventional mining required to mine higher-grade
chimney ore, which in turn reduced the operating cost per pound of
metal produced.
Direct operating costs per tonne milled for the
full year 2018 averaged $78.98, representing a 10% decrease from
$88.22 in 2017 and in line with the Company’s 2018 cost guidance.
The overall improvement in costs throughout 2018 are attributable
to the Company’s ongoing focus on cost reduction. One of the
Company’s initiatives was the bypass development to Esperanza
completed this February, which now allows shorter access to this
orebody, significantly reducing the ore hauling distance and cost
from this area. The Company is also evaluating alternatives to
reduce power costs over the long-term. The Company expects to see
further reductions going forward as highlighted by 2019 cost
guidance of $70-80/t.
Cash operating cost per zinc equivalent payable
pound sold for the quarter was $0.83, representing a decrease of
19% from $1.03 in the fourth quarter 2017 and an increase of 15%
from $0.72 in the third quarter 2018. All-In Sustaining Cost for
the fourth quarter was $1.28 per zinc equivalent payable pound
sold, representing a 17% decrease from the fourth quarter 2017 of
$1.54 and an increase of 6% over the previous quarter of $1.21.
Costs on a per ZnEq pound basis for the year
showed an improvement as a result of higher grades mined during the
year resulting in increased contained metal production. Cash
operating cost per zinc equivalent payable pound sold was $0.79 for
the full year 2018, down 25% from $1.05 per pound for 2017.
The AISC for the full year 2018 was $1.31 per zinc equivalent
payable pound sold, down 19% from 2017. The Company announced in
the first quarter 2018 that given the steady state of production
achieved, entering its first full year of normalized production, it
has adopted the AISC reporting metric.
El Mochito Expansion Preliminary
Economic Assessment
In the fourth quarter 2018, the Company
announced the results of a Preliminary Economic Assessment (“PEA”)
for the expansion of the El Mochito mine.
The PEA outlines a substantial Internal Rate of
Return (“IRR”) with a payback period of just under two years. The
PEA further presents a robust and compelling opportunity for the
Company to position El Mochito as a long-term profitable operation
reducing the AISC at El Mochito down to an average of $0.97 per
payable ZnEq pound produced. The PEA assumes a mine life of 10
years inclusive of Inferred Mineral Resources, notably excluding
any additional Mineral Resources added from the 2018 exploration
program.
On February 6, 2019, the Company announced the
receipt of a non-binding term sheet from Overseas Private
Investment Corporation (“OPIC”), for a project loan of US$35
million to American Pacific Honduras S.A. de C.V., the Company’s
operating subsidiary in Honduras, to finance the expansion of the
El Mochito mine. The financing has a proposed 7-year term and
covers the total financing requirements for the expansion program
including mine development expansion, a new underground shaft,
underground water pumping upgrades and mill upgrades. The term
sheet is non-binding and bears no legal obligation by any of the
parties until definitive agreements have been made. The loan is
subject to the completion of OPIC’s due diligence, additional
documentation, internal approvals and certain other conditions.
Highlights of the Preliminary Economic
Assessment for the Expansion Project include:
- Increase in processed tonnes to 2,800 per day (approximately 1
million tonnes per annum)
- Increased average annual contained ZnEq1 production to 126
million lbs per year
- Reduction in average annual operating costs to $61.85/t
processed and $0.58/lb ZnEq payable
- Reduction in average mine AISC to $0.97/lb payable ZnEq
produced
- $83M project NPV8% incrementally added to El Mochito cash
flow
- 58% project IRR after taxes and royalties
- $32.8 million project capex funded through non-dilutive
financing
- 2-year project construction and commissioning period
For more details, please see the Technical
Report that can be found on the Company’s website at
www.ascendantresources.com or on SEDAR www.sedar.com.
El Mochito Exploration
Activities
Ascendant continued its exploration activities
at the El Mochito mine during the year. The 2018 program targeted
the following areas; Esperanza, Port Royal Manto, Santa Barbara,
Santa Elena, Porvenir, Palmar Dyke, Nueva Este, Victoria and San
Juan, most of which are located in the eastern portion of the mine,
with the overall goal of expanding the size of these orebodies. The
program also targeted exploration targets in untested areas that
new development opened access to, with a focus on new chimney
mineralization discovery.
Results released in Q4 2018 from an additional
54 diamond drill holes, or 10,410 metres, split between step-out
(64%) and in-fill (36%) drilling, continued to deliver high-grade
intercepts, well above the average current Mineral Resource grade.
These drill holes were more focused on follow up work on the
extension of the eastern orebodies of the mine. (see press release
dated October 31, 2018)
Lagoa Salgada Acquisition, Exploration
and Resource Growth
In June 2018, Ascendant entered into an
agreement to acquire an interest and option in the Lagoa Salgada
high-grade polymetallic VMS project located on the northern part of
the Iberian Pyrite Belt (“IPB”) in Portugal. The Project represents
a low-cost entry opportunity in this prolific region to gain
exposure to a known, high-grade VMS deposit that has significant
exploration potential to further expand the resource in the near
term. Transaction summary and details of the Company’s acquisition
of the interest and option in the Lagoa Salgada project can be
found in the Company’s press release dated August 1, 2018.
The Iberian Pyrite Belt is host to some of the
world’s largest VMS deposits and mines such as Neves-Corvo (Lundin
Mining Corporation), Aguas Tenidas (Trafigura Mining Group) and
Aljustrel (private). It represents the largest concentration of
massive sulphide deposits in the world, forming an arch through
Portugal and Spain about 240 km long and 35 km wide and has
produced more than 300 million tonnes of massive sulfide ore over
the past hundred years.
In the fourth quarter of 2018, Ascendant
continued its exploration program at the Lagoa Salgada Project. The
results of the 2018 program lead to an updated National Instrument
43-101 Mineral Resource Estimate the Company announced on February
13, 2019. The updated Mineral Resource Estimate demonstrates
material growth in both the North Zone (Main Massive Sulphide) and
the South Zone (Stockwork) deposits following a modest 7,077 metre
drill program consisting of 20 drill holes. Both zones coincide
with an Induced Polarization (IP) chargeability anomaly with a
strike length of 1.6km and have now been delineated by less than a
total of 50 holes.
In addition to drilling, the exploration program
includes downhole geophysics, relogging and assaying of historical
drilling in the area and a complete structural reinterpretation of
the property in the context of the overall regional geology. Given
the structural controls seen at similar deposits within the IPB,
the latter will aid in the development of the exploration program
over the entire land package. For further details, please refer to
the Company’s press release dated February 13, 2019.
The updated Mineral Resource Estimate for the
Lagoa Salgada project is set out in the tables below:
Lagoa Salgada Total Mineral Resource
Estimate
|
MineralizedZones |
|
Average Grade |
Category |
Tonnes |
ZnEq |
Cu |
Zn |
Pb |
Sn |
Ag |
Au |
|
kt |
% |
% |
% |
% |
% |
g/t |
g/t |
Measured |
All |
1,761 |
11.02 |
0.38 |
3.09 |
3.19 |
0.15 |
62.41 |
0.84 |
Indicated |
All |
6,082 |
7.61 |
0.50 |
2.09 |
1.84 |
0.09 |
48.61 |
0.40 |
M + I |
All |
7,843 |
8.38 |
0.47 |
2.31 |
2.15 |
0.10 |
51.71 |
0.50 |
Inferred |
All |
12,823 |
6.37 |
0.36 |
1.68 |
1.63 |
0.04 |
38.62 |
0.61 |
North Deposit Mineral Resource
Estimate
|
|
|
Average Grade |
Category |
Mineralized |
Tonnes |
ZnEq |
Cu |
Zn |
Pb |
Sn |
Ag |
Au |
|
Zones |
kt |
% |
% |
% |
% |
% |
g/t |
g/t |
Measured |
GO |
177 |
11.65 |
0.15 |
0.65 |
4.12 |
0.40 |
54.14 |
1.55 |
MS |
1,584 |
10.95 |
0.40 |
3.36 |
3.09 |
0.12 |
63.33 |
0.76 |
Total |
1,761 |
11.02 |
0.38 |
3.09 |
3.19 |
0.15 |
62.41 |
0.84 |
Indicated |
GO |
451 |
7.86 |
0.13 |
0.52 |
3.07 |
0.30 |
35.10 |
0.67 |
MS |
3,842 |
8.81 |
0.51 |
2.37 |
2.12 |
0.10 |
61.51 |
0.52 |
Total |
4,293 |
8.71 |
0.47 |
2.18 |
2.22 |
0.12 |
58.73 |
0.54 |
M + I |
GO |
628 |
8.93 |
0.14 |
0.56 |
3.37 |
0.33 |
40.47 |
0.92 |
MS |
5,426 |
9.43 |
0.48 |
2.66 |
2.40 |
0.11 |
62.04 |
0.59 |
Total |
6,054 |
9.38 |
0.44 |
2.44 |
2.50 |
0.13 |
59.80 |
0.63 |
Inferred |
GO |
1,546 |
7.03 |
0.10 |
0.43 |
3.69 |
0.14 |
32.44 |
0.67 |
MS |
5,911 |
7.78 |
0.36 |
2.31 |
1.96 |
0.05 |
57.08 |
0.58 |
SW |
390 |
3.68 |
0.39 |
1.42 |
0.42 |
0.03 |
19.14 |
0.09 |
Total |
7,847 |
7.43 |
0.31 |
1.90 |
2.22 |
0.07 |
50.34 |
0.58 |
Central Deposit Mineral Resource
Estimate
|
|
|
Average Grade |
Category |
Mineralized |
Tonnes |
ZnEq |
Cu |
Zn |
Pb |
Sn |
Ag |
Au |
|
Zone |
kt |
% |
% |
% |
% |
% |
g/t |
g/t |
Inferred |
Total |
1,078 |
5.41 |
0.11 |
0.17 |
0.06 |
0.00 |
12.15 |
2.89 |
South Deposit Mineral Resource
Estimate
|
|
|
Average Grade |
Category |
Mineralized |
Tonnes |
ZnEq |
Cu |
Zn |
Pb |
Sn |
Ag |
Au |
|
Zones |
kt |
% |
% |
% |
% |
% |
g/t |
g/t |
Indicated |
SW2 |
1,789 |
4.99 |
0.58 |
1.88 |
0.95 |
0.00 |
24.33 |
0.07 |
Inferred |
SW2 |
3,899 |
4.50 |
0.52 |
1.65 |
0.89 |
0.00 |
22.36 |
0.06 |
Notes to tables:(1) Mineralized Zones,
GO=Gossan, MS=Massive Sulphide, SW=Stringer, SW2=Stockwork(2)
Cut-off: Zn-Eq ≥ 3.00%(3) Zn-Eq =
[Zn%]+([Cu%]*2.652)+([Pb%]*0.913)+([Au g/t]*1.585)+([Ag
g/t]*0.025)+([Sn%]*7.565)(4) Densities: GO = 3.11, MS = 4.85, SW =
2.91, SW2 = 2.91(5) The Mineral Resource content for Lagoa Salgada
was completed and approved by Charlie Murahwi, M.Sc., P.Geo., Pr.
Sci. Nat., FAusIMM, Senior Geologist, Micon International Ltd.
Other Corporate Highlights
On August 24, 2018, the company announced the
closing of a $5 million short-term revolving credit facility
between its wholly owned subsidiary, American Pacific Honduras S.A.
de C.V, and Banco Financiera Comercial Hondurena S.A. (“Ficohsa”)
based out of Tegucigalpa, Honduras. Demonstrating strong local
support and solidifying additional in-country partnerships. The
credit facility was exercised throughout the year for working
capital and other general corporate purposes.
In December 2018, Ascendant expanded its
management team with the appointment of Robert Campbell to the
position of Vice President, Exploration. Mr. Campbell is an
exploration geologist with over 40 years experience in mining and
exploration in Canada, the United States and Latin America.
In Q3 2018, Mr. Kurt Menchen was appointed
Chairman of the Health, Safety and Technical Committee replacing
Mr. Renaud Adams. Mr. Menchen is a well accomplished mining
engineer with over 40 years’ experience of successfully building
and operating mines in Latin America.
2019 Guidance and Outlook
2019 production guidance is provided in the
table below:
Contained Metals in Concentrate |
Zinc
equivalent metal |
90 –
110 million lbs |
Zinc |
65 –
75 million lbs |
Lead |
21 –
26 million lbs |
Silver |
850,000 – 1,200,000 ozs |
Direct
Operating Costs |
$70 –
$80 / tonne |
Capital
Expenditure |
$15 –
$20 million |
|
|
Suppressed metal prices persisted throughout the
second half of 2018 as pressure from global trade tensions and
uncertainty over Chinese growth and inventories intensified. While
it is the Company’s view that the fundamentals remain little
changed and continue to strongly support structural supply deficits
for the next few years due to a continued depletion in global
inventories for base metals, the Company remains dedicated to
further cost reductions to generate robust profitability in any
reasonable metals price environment.
The PEA for the expansion of the El Mochito mine
demonstrates the Company’s dedication and focus on delivering
long-term profitability and the ability to operate at an all-in
sustaining cost of $0.97 per ZnEq pound, well below long term metal
price assumptions.
As mentioned above, the Company continues its
discussions with OPIC to complete the non-dilutive project loan
laid out in the indicative term sheet received to finance the PEA
expansion program at El Mochito.
The Company is also currently in advanced
negotiations with local and international institutions to secure
additional non-dilutive financing opportunities to support working
capital in the short term.
The Company is planning further exploration at
El Mochito in 2019 for both infill and exploration drilling. The
infill drilling program has the goal of upgrading Inferred Mineral
Resources and further extending the mine life of El Mochito while
the exploration drilling program will continue to explore untested
areas with the purpose of discovering the next large, high grade
chimney. Additional exploration development and drilling is
expected to take place in the old upper levels of the mine, which
has the potential to materially increase resource tonnage at very
high grades, mostly derived from remnant pillars and undeveloped
“chimney” type ore zones. Ascendant plans to rehabilitate and mine
these pillars where possible.
The Company is also focusing exploration work on
regional targets on El Mochito’s 10,000-hectare land package. El
Mochito is an example of a high-temperature carbonate replacement
deposit and despite the long history of operations the source of
the deposit has not yet been identified indicating significant
exploration potential and warranting follow up on the numerous
identified targets within the land package.
With the success of the exploration program at
Lagoa Salgada, doubling total tonnes in the updated Mineral
Resource estimate, the Company will look to develop and execute a
follow up exploration program later this year, with the intention
of further advancing the project with a target to complete a
Preliminary Economic Assessment by year end.
Conference Call Details
A conference call will be held tomorrow, March
21, 2019, at 10:00am EDT to discuss fourth quarter and full year
2018 operational and financial results.
Dial-in Details:Date of Call:
Thursday, March 21, 2019Time of Call: 10:00am EDTConference ID:
8795685Dial-In Numbers:North American Toll-Free:
1-833-696-8362International: 1-612-979-9908
A recorded playback of the conference call will
be available from March 21, 2019 until April 21, 2019 and can be
accessed on the Company’s website at www.ascendantresources.com
within the Investors section.
The information provided within this release
should be read in conjunction with Ascendant’s unaudited condensed
consolidated interim financial statements and management's
discussion and analysis for the year ended December 31, 2017, which
are available on Ascendant’s website and on SEDAR. As at January 1,
2017, the Company has changed its presentation currency to the U.S.
dollar (US). All financial figures are in US dollars unless
otherwise stated.
Technical Disclosure/Qualified
Person
All technical information contained herein has
been reviewed and approved by Robert A. Campbell, M.Sc, P.Geo, a
director of the Company. Mr. Campbell is a "qualified person"
within the meaning of NI 43-101 – Standards of Disclosure for
Mineral Projects (“NI 43-101”).
About Ascendant Resources
Inc.
Ascendant is a Toronto-based mining company
focused on its 100%-owned producing El Mochito zinc, lead and
silver mine in west-central Honduras and its high-grade
polymetallic Lagoa Salgada VMS Project located in the prolific
Iberian Pyrite Belt in Portugal.
After acquiring the El Mochito mine in December
2016, Ascendant spent 2017 and 2018 implementing a rigorous and
successful optimization program restoring the historic potential of
El Mochito, a mine in production since 1948, to deliver record
levels of production with profitability restored. The Company now
remains focused on further cost reduction and operational
improvements to drive profitability in 2019 and beyond. With a
significant land package of approximately 11,000 hectares in
Honduras and an abundance of historical data, there are several
near-mine and regional targets providing longer term exploration
upside which could lead to further Mineral Resource growth.
Ascendant holds an interest in the high-grade
polymetallic Lagoa Salgada VMS Project located in the prolific
Iberian Pyrite Belt in Portugal. The Company is engaged in
exploration of the Project with the goal of expanding the
already-substantial Mineral Resource Estimate of over 20 million
tonnes and testing additional known targets as defined by the 2018
exploration program. The Company’s acquisition of its interest in
the Lagoa Salgada Project offers a low-cost entry point to a
potentially significant exploration and development opportunity.
The Company holds an additional option to increase its interest in
the Project upon completion of certain milestones.
Ascendant Resources is engaged in the ongoing
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:
888-723-7413 info@ascendantresources.com
Cautionary Notes to US
Investors
The information concerning the Company’s mineral
properties has been prepared in accordance with National Instrument
43-101 (“NI-43-101”) adopted by the Canadian Securities
Administrators. In accordance with NI-43-101, the terms
“mineral reserves”, “proven mineral reserve”, “probable mineral
reserve”, “mineral resource”, “measured mineral resource”,
“indicated mineral resource” and “inferred mineral resource” are
defined in the Canadian Institute of Mining, Metallurgy and
Petroleum (the “CIM”) Definition Standards for Mineral Resources
and Mineral Reserves adopted by the CIM Council on May 10,
2014. While the terms “mineral resource”, “measured mineral
resource”, “indicated mineral resource” and “inferred mineral
resource” are recognized and required by NI 43-101, the U.S.
Securities Exchange Commission (“SEC”) does not recognize
them. The reader is cautioned that, except for that portion
of mineral resources classified as mineral reserves, mineral
resources do not have demonstrated economic value. Inferred
mineral resources have a high degree of uncertainty as to their
existence and as to whether they can be economically or legally
mined. It cannot be assumed that all or any part of any
inferred mineral resource will ever be upgraded to a higher
category. Therefore, the reader is cautioned not to assume
that all or any part of an inferred mineral resource exists, that
it can be economically or legally mined, or that it will ever be
upgraded to a higher category. Likewise, you are cautioned
not to assume that all or any part of a measured or indicated
mineral resource will ever be upgraded into mineral reserves.
Readers should be aware that the Company’s
financial statements (and information derived therefrom) have been
prepared in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting
Standards Board and are subject to Canadian auditing and auditor
independence standards. IFRS differs in some respects from United
States generally accepted accounting principles and thus the
Company’s financial statements (and information derived therefrom)
may not be comparable to those of United States companies.
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 2019, 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, the ability to
successfully close its financing initiatives, exploration and
capital expenditures at El Mochito and Lagoa Salgada, robust
adjusted EBITDA and free cash flow generation and the undertaking
of various long-term optimization programs including but not
limited to the expansion program at El Mochito. 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
2019, 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, successfully closing on its financing
initiatives, exploration and capital expenditures, maintain robust
adjusted EBITDA and free cash flow and undertake various long-term
optimization programs including but not limited to the expansion
program at El Mochito 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
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.
NON-IFRS PERFORMANCE
MEASURES
The non-IFRS performance measures presented do
not have any standardized meaning prescribed by IFRS and are
therefore unlikely to be directly comparable to similar measures
presented by other issuers.
Non-IFRS reconciliation of Adjusted
EBITDA
EBITDA is a non-IFRS measure that represents an
indication of the Company’s continuing capacity to generate
earnings from operations before taking into account management’s
financing decisions and costs of consuming capital assets, and
management’s estimate of their useful life. EBITDA comprises
revenue less operating expenses before interest expense (income),
property, plant and equipment amortization and depletion, and
income taxes. Adjusted EBITDA has been included in this document.
Under IFRS, entities must reflect in compensation expense the cost
of share-based payments. In the Company’s circumstances,
share-based payments involve a significant accrual of amounts that
will not be settled in cash but are settled by the issuance of
shares in exchange for cash. EBITDA and Adjusted EBITDA do not have
any standardized meaning prescribed by IFRS and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. EBITDA and Adjusted
EBITDA exclude the impact of cash costs of financing activities and
taxes, and the effects of changes in operating working capital
balances, and therefore are not necessarily indicative of operating
profit or cash flow from operations as determined under IFRS. Other
companies may calculate EBITDA and Adjusted EBITDA differently. As
such, the Company has made an entity specific adjustment to EBITDA
for these expenses. The Company has also made an entity-specific
adjustment to the foreign currency exchange (gain)/loss.
The following table provides a reconciliation of
net income (loss) to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Year Ended |
|
Adjusted EBITDA |
|
|
December 31, |
December 31, |
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$000's |
|
(3,020 |
) |
|
(1,429 |
) |
|
3,005 |
|
|
(12,057 |
) |
|
|
|
|
|
|
|
|
|
|
Adjusted for: |
|
|
|
|
|
|
|
|
Advances
to joint venture |
|
$000's |
|
2,248 |
|
|
- |
|
|
2,248 |
|
|
- |
|
|
|
Gain on
remeasurement of environmental obligation |
|
$000's |
|
(2,788 |
) |
|
- |
|
|
(2,788 |
) |
|
- |
|
|
|
Depletion and depreciation |
|
$000's |
|
1,454 |
|
|
1,298 |
|
|
4,724 |
|
|
3,345 |
|
|
|
Interest
income/expense |
|
$000's |
|
249 |
|
|
53 |
|
|
1,022 |
|
|
273 |
|
|
|
Accretion expense on rehabilitation liabilities |
|
$000's |
|
(333 |
) |
|
(250 |
) |
|
310 |
|
|
482 |
|
|
|
Charge
on termination obligations |
|
$000's |
|
1,089 |
|
|
803 |
|
|
2,335 |
|
|
1,472 |
|
|
|
Share-based payments |
|
$000's |
|
152 |
|
|
368 |
|
|
1,022 |
|
|
1,787 |
|
|
|
Foreign
currency exchange gain/loss |
|
$000's |
|
(113 |
) |
|
279 |
|
|
(49 |
) |
|
1,044 |
|
|
|
Income
taxes |
|
$000's |
|
947 |
|
|
1,158 |
|
|
1,663 |
|
|
1,158 |
|
|
Adjusted EBITDA |
|
$000's |
|
(115 |
) |
|
2,280 |
|
|
13,492 |
|
|
(2,496 |
) |
|
|
|
|
|
|
|
|
|
|
Direct operating cost per tonne milled
The Company uses the non-IFRS measure of direct
operating cost per tonne milled to manage and evaluate operating
performance. The Company believes that, in addition to conventional
measures prepared in accordance with IFRS, certain investors use
this information to evaluate the Company’s performance and ability
to generate cash flows. Accordingly, it is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS. The Company considers cost of sales per tonne milled to
be the most comparable IFRS measure to direct operating cost per
tonne milled and has included calculations of this metric in the
reconciliations within the applicable tables to follow.
Direct operating cost per tonne milled includes
mine direct operating production costs such as mining, processing,
administration, indirect charges as surface maintenance and camp
expenses, and inventory sales adjustments but does not include,
smelting, refining and freight costs, royalties, depreciation,
depletion, amortization, reclamation, and capital costs.
The following table provides a reconciliation of
direct operating costs to cost of sales, as reported in the
Company’s consolidated statement of income (loss) for the year
ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Year Ended |
|
Direct operating cost per tonne
milled |
|
|
December 31, |
December 31, |
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
Production expenses
(from consolidated income statement) |
|
$000's |
|
22,009 |
|
|
20,336 |
|
|
74,162 |
|
|
59,248 |
|
|
|
Add: Termination
Liability Payments |
|
$000's |
|
257 |
|
|
14 |
|
|
933 |
|
|
285 |
|
|
|
Add
(deduct): Supplies Inventory Obsolescence Adjustment |
|
$000's |
|
(266 |
) |
|
- |
|
|
(266 |
) |
|
- |
|
|
|
Add
(deduct): Supplies Inventory Adjustment |
|
$000's |
|
(1,391 |
) |
|
- |
|
|
(1,391 |
) |
|
- |
|
|
|
Deduct (Add): Variation
in Finished Inventory |
|
$000's |
|
(2,129 |
) |
|
(2,158 |
) |
|
(4,641 |
) |
|
4,471 |
|
|
|
Deduct:
Depreciation in production |
|
$000's |
|
(1,452 |
) |
|
(1,290 |
) |
|
(4,712 |
) |
|
(3,319 |
) |
|
Total cash costs (including
royalties) |
|
$000's |
|
17,028 |
|
|
16,902 |
|
|
64,085 |
|
|
60,685 |
|
|
|
Deduct:
Government taxes and royalties |
|
$000's |
|
(1,240 |
) |
|
(1,009 |
) |
|
(4,375 |
) |
|
(2,788 |
) |
|
Direct operating costs |
|
$000's |
|
15,788 |
|
|
15,893 |
|
|
59,710 |
|
|
57,897 |
|
|
|
Tonnes Milled |
|
tonnes |
|
184,913 |
|
|
198,354 |
|
|
756,034 |
|
|
656,291 |
|
|
Direct operating cost per tonne
milled |
|
$/tonne |
$ |
85.38 |
|
$ |
80.13 |
|
$ |
78.98 |
|
$ |
88.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Year Ended |
|
AISC per ZnEq payable pound sold |
|
|
December 31, |
December 31, |
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
ZnEq payable pounds sold |
|
000's
lbs |
|
21,511 |
|
|
17,599 |
|
|
81,871 |
|
|
50,725 |
|
|
|
|
|
|
|
|
|
|
|
Cash Operating Costs
Reconciliation |
|
|
|
|
|
|
|
|
Direct
operating costs |
|
$000's |
|
15,788 |
|
|
15,893 |
|
|
59,710 |
|
|
57,897 |
|
|
|
Add (deduct): Variation in Finished Inventory |
|
$000's |
|
2,129 |
|
|
2,158 |
|
|
4,641 |
|
|
(4,471 |
) |
|
Cash operating costs |
|
$000's |
|
17,917 |
|
|
18,051 |
|
|
64,351 |
|
|
53,426 |
|
|
Cash operating cost per ZnEq payable pound
sold |
|
$/ZnEq lb |
$ |
0.83 |
|
$ |
1.03 |
|
$ |
0.79 |
|
$ |
1.05 |
|
|
|
|
|
|
|
|
|
|
|
All-in Sustaining Costs (AISC)
Reconciliation |
|
|
|
|
|
|
|
|
Total
cash operating costs |
|
$000's |
|
17,917 |
|
|
18,051 |
|
|
64,351 |
|
|
53,426 |
|
|
|
Add:
Government taxes and royalties |
|
$000's |
|
1,240 |
|
|
1,009 |
|
|
4,375 |
|
|
2,788 |
|
|
|
Add: TC
& RCs |
|
$000's |
|
3,996 |
|
|
3,629 |
|
|
14,474 |
|
|
10,565 |
|
|
|
Add:
G&A, excluding depreciation and amortization |
|
$000's |
|
1,328 |
|
|
2,727 |
|
|
5,974 |
|
|
7,402 |
|
|
|
Add:
Accretion expense on rehabilitation liabilities |
|
$000's |
|
(333 |
) |
|
(250 |
) |
|
310 |
|
|
482 |
|
|
|
Add: Sustaining capital expenditure |
|
$000's |
|
3,437 |
|
|
1,994 |
|
|
17,555 |
|
|
7,507 |
|
|
Total All-in sustaining costs |
|
$000's |
|
27,585 |
|
|
27,160 |
|
|
107,039 |
|
|
82,170 |
|
|
AISC per ZnEq payable pound sold |
|
$/ZnEq lb |
$ |
1.28 |
|
$ |
1.54 |
|
$ |
1.31 |
|
$ |
1.62 |
|
|
|
Additional non-IFRS
measures
The Company uses other financial measures, the
presentation of which is not meant to be a substitute for other
subtotals or totals presented in accordance with IFRS, but rather
should be evaluated in conjunction with such IFRS measures. The
following other financial measures are used:
- Operating cash flows before movements in working capital -
excludes the movement from period-to-period in working capital
items including trade and other receivables, prepaid expenses,
deposits, inventories, trade and other payables and the effects of
foreign exchange rates on these items.
The terms described above do not have a
standardized meaning prescribed by IFRS, and therefore the
Company’s definitions are unlikely to be comparable to similar
measures presented by other companies. The Company’s management
believes that their presentation provides useful information to
investors because cash flows generated from operations before
changes in working capital excludes the movement in working capital
items. This, in management’s view, provides useful information of
the Company’s cash flows from operations and are considered to be
meaningful in evaluating the Company’s past financial performance
or its future prospects. The most comparable IFRS measure is cash
flows from operating activities.
_____________________________1 ZnEq lbs and grades in ZnEq %
represents zinc metal considered together with the lead and silver
expressed in zinc equivalent terms of zinc using spot metal prices
and production during the period.
Ascendant Resources (TSX:ASND.WT)
Gráfica de Acción Histórica
De Jun 2024 a Jul 2024
Ascendant Resources (TSX:ASND.WT)
Gráfica de Acción Histórica
De Jul 2023 a Jul 2024