Mr. Brendan Cahill reports

EXCELLON REPORTS SECOND QUARTER 2014 FINANCIAL RESULTS

Excellon Resources Inc. has released financial results for the three- and six-month periods ended June 30, 2014. All currency figures in this release are in United States dollars.

Second quarter 2014 financial highlights (compared with second quarter 2013)

• 110-per-cent increase in revenue to $8.8-million (second quarter 2013 -- $4.2-million);
• 45-per-cent increase in payable ounces produced to 545,343 silver equivalent (AgEq) ounces (second quarter 2013 -- 374,207 AgEq ounces), the best quarter of AgEq production since first quarter 2010;
• Mine operating earnings of $2.1-million (second quarter 2013 -- net loss of $1.8-million);
• Net loss of $700,000 or one cent per share (second quarter 2013 -- net loss of $5.0-million or nine cents per share);
• Improved cash flow from operations to $1.6-million or three cents per share before changes in working capital (second quarter 2013 -- outflow of $3.3-million or six cents per share);
• Total cash cost per Ag ounce payable of $9.03 (second quarter 2013 -- $13.69) and $10.44 year to date;
• All-in sustaining cost (AISC) per Ag ounce payable decreased to $14.59 (second quarter 2013 -- $30.64) and $15.98 year to date;
• 20-per-cent increase in cash, receivables and marketable securities during the quarter to $10.9-million at June 30, 2014 ($9.1-million at March 31, 2014);
• 19-per-cent increase in working capital to $14-million at June 30, 2014 ($11.8-million at March 31, 2014).

"We continued to generate positive cash flow during second quarter despite another period of low silver prices," stated Brendan Cahill, president and chief executive officer. "Our all-in sustaining costs continued to improve this quarter and, with improved silver prices and higher-grade mineralization ahead, we expect to continue building our cash position through the rest of the year. We are also encouraged by the ongoing strengthening of zinc and lead prices, which currently contribute approximately 40 per cent of our revenue and ensure low per-ounce production costs on a byproduct basis."

 
         FINANCIAL RESULTS FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2014, AND 2013 
                  (in thousands of dollars except amounts per share and per ounce)

                                                         Q2 2014   Q2 2013    H1 2014       H1 2013

Revenue                                                   $8,792    $4,187    $19,328       $14,242
Production (costs)                                       (5,615)   (5,171)   (12,149)      (10,247)
Depletion and amortization (loss)                        (1,047)     (832)    (2,040)       (1,719)
(Cost) of sales                                          (6,662)   (6,003)   (14,459)      (11,966)
Gross profit (loss)                                        2,130   (1,816)      4,869         2,276
Corporate administration (loss)                          (1,142)   (1,547)    (2,327)       (3,330)
Exploration (loss)                                         (181)   (1,368)      (518)       (6,207)
Other (incl. finance cost) (loss)                          (903)   (1,789)        175           304
Income tax recovery (expense)                              (615)     1,485    (1,035)         1,321
Net income (loss)                                          (711)   (5,035)      1,164       (5,636)
Earnings per share -- basic (loss)                        (0.01)    (0.09)       0.02        (0.10)
Cash flow from operations (loss)                           1,620   (3,280)      3,758       (3,856)
Cash flow from operations per share -- basic (loss)         0.03    (0.06)       0.07        (0.07)
Total cash cost per silver ounce payable ($/Ag oz)          9.03     13.69      10.44         11.20
AISC per silver ounce payable ($/Ag oz)                    14.59     30.64      15.98         27.08
Average realized prices
Silver -- ($US/oz)                                         19.81     21.07      19.92         22.15
Lead -- ($US/lb)                                            0.95      0.92       0.95          0.93
Zinc -- ($US/lb)                                            0.97      0.83       0.95          0.86

The company's net loss during the second quarter was primarily the result of currency adjustments relating to lower U.S. dollar exchange rates and silver prices averaging $19.81, versus $21.07 in the second quarter of 2013 and $20.60 in the first quarter of 2014. Components of the net loss included $900,000 in finance costs relating to a weaker U.S. dollar relative to the Canadian dollar and Mexican peso (non-cash), $600,000 in income tax expenses, including $200,000 accrued in respect of royalties payable under the new Mexican mining tax reforms (non-cash), a reduction in revenues of $100,000 upon the final settlement of prior-period sales and an unrealized gain of $400,000 from an increase in the fair value of Sprott Physical Silver Trust units held by the company, representing an underlying investment in 134,732 ounces of silver. Revenues and production costs during the quarter were higher relative to the second quarter of 2013 as the company produced and processed significantly more ore during the current period, primarily due to increased mine development resulting in lower rates of production for the comparable quarter in 2013. Revenue was lower relative to the first quarter of 2014 due to lower silver prices and the sale in early January of a significant amount of inventory produced in December, 2013. Working capital increased 19 per cent during the quarter to $14-million at June 30, 2014 ($11.8-million at March 31, 2014). Cash, marketable securities and current accounts receivable increased 20 per cent to $10.9-million ($9.1-million at March 31, 2014). Cash corporate administration expenses decreased by 30 per cent or approximately $400,000 during the second quarter of 2014 relative to the same period in 2013 and remained stable relative to the first quarter of 2014 as the company maintained cost reduction measures in the corporate head office in Toronto.

Exploration expenses were limited during the quarter, though the company resumed exploration late in the second quarter of 2014. The company expects to incur more significant exploration expenses in the third and fourth quarters of 2014, assuming continued stable or increasing silver prices and a consistent production profile. Excellon has adopted the measure for all-in sustaining cost (AISC) per payable silver ounce to provide further transparency into the costs associated with producing silver and to assist stakeholders of the company to assess operating performance, ability to generate free cash flow from current operations and overall value. The AISC measure is a non-GAAP (generally accepted accounting principles) measure based on guidance announced by the World Gold Council in June, 2013. Excellon defines AISC per silver ounce as the sum of total cash costs (including treatment charges and net of byproduct credits), capital expenditures that are sustaining in nature, corporate general and administrative costs (including non-cash share-based compensation), capitalized and expensed exploration that is sustaining in nature, and (non-cash) environmental reclamation costs, all divided by the total payable silver ounces sold during the period to arrive at a per-ounce figure.

Total cash cost per silver ounce payable was $9.03 during the quarter versus $13.69 in the second quarter of 2013 and $11.76 in the first quarter of 2014. AISC per silver ounce payable was $14.59 during the quarter versus $30.64 in the second quarter of 2013 and $17.28 in the first quarter of 2014. Excluding non-cash components of AISC (share-based compensation and amortized reclamation costs), all-in costs during the second quarter of 2014 were $13.81 per silver ounce payable and $15.14 per silver ounce payable year to date. Relative to the first quarter of 2014, total cash costs and AISC per silver ounce payable were reduced due to lower electrical consumption relating to water management, significantly increased byproduct credits due to higher lead and zinc grades and improved metal recoveries. The company believes that further decreases in production costs per ounce remain attainable in the near term as the company continues to reduce water inflows into the mine, manage electricity usage and access higher-grade mantos through the remainder of the year and into 2015. The company plans to increase capital expenditure in the second half of 2014 as it conducts development into higher-grade mantos and also intends to conduct further exploration, both of which may contribute to increases in AISC per ounce depending on tonnages processed, grades mined and commodity prices during the remainder of the year.

 
             MINE PRODUCTION FOR THE THREE- AND SIX-MONTH 
                PERIODS ENDED JUNE 30, 2014, AND 2013

                       Q2 2014     Q2 2013       H1 2014       H1 2013

Tonnes mined            19,152      13,456        38,354        31,739
Tonnes milled           19,567      13,608        38,457        31,969
Ore grades
Silver (g/t)               594         627           607           609
Lead (%)                  6.49        6.62          6.58          6.47
Zinc (%)                  8.88       10.44          8.51         10.20
Recoveries
Silver (%)                93.0        95.7          92.4          94.1
Lead (%)                  84.8        84.7          84.5          84.7
Zinc (%)                  82.8        84.6          81.7          84.1
Metal production
Silver (oz)            374,266     252,789       740,207       544,002
Lead (lb)            2,304,958   1,514,465     4,651,724     3,700,257
Zinc (lb)            3,102,239   2,460,728     5,731,921     5,870,006
AgEq (oz)              636,713     401,858     1,226,594       897,387
Payable
Silver (oz)            327,631     231,069       677,343       503,118
Lead (lb)            2,091,405   1,560,712     4,449,588     3,545,897
Zinc (lb)            2,396,469   2,256,300     4,825,350     5,006,697
AgEq (oz)              545,343     374,207     1,110,472       800,067

Ore production during the second quarter was primarily from the 6A and Guadalupe (North, Main and South) mantos. Grades during the quarter were generally in line with estimates for the Platosa mineral resources mined during the period. The company expects to develop into the higher-grade 623 and Rodilla mantos later in 2014.

We seek Safe Harbor.