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Telson Resources Inc (2)
Symbol TSN
Shares Issued 124,218,120
Close 2018-02-09 C$ 0.74
Market Cap C$ 91,921,409
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Telson's Campo Morado produces 5,021 t zinc concentrate

2018-02-12 10:26 ET - News Release

Mr. Antonio Berlanga reports

TELSON ANNOUNCES CAMPO MORADO MINE 2017 STARTUP OPERATIONAL RESULTS OF 2.4 MONTHS OF DEVELOPMENT, PREPRODUCTION AND INITIAL CONCENTRATE SALES

Telson Resources Inc. has successfully started preproduction development mining and processing at its 100-per-cent-owned Campo Morado mine in Guerrero, Mexico. Preproduction test milling operations started on Oct. 14, 2017, and the mill has run continuously on a 24/seven basis for 71 out of 74 available days through to Dec. 31, 2017, for an operational efficiency rate of 96 per cent. Mining and milling preproduction operations have continued from Jan. 1, 2018, and currently remain in continuous 24/seven operations.

Highlights:

  • Mill processed 106,655 tonnes of mineralized development material over 71 operational days, averaging 1,502 tonnes per day and reaching 96 per cent operational efficiency 24/seven;
  • Produced 5,021 tonnes of zinc concentrate averaging 44 per cent zinc. 1.04 grams per tonne gold and 502 g/t silver;
  • Shipped for sale approximately 4,530 tonnes zinc and 578 tonnes of lead concentrate, representing approximately 73 per cent of total 2017 concentrate production to Trafigura, Manzanillo, warehouse;
  • Preliminary payment totalling approximately $4.8-million (U.S.) received by Telson for shipped concentrates equating to approximately 90 per cent of final estimated sale price.

During the 2.5 months of preproduction operations in 2017, underground development mining at Campo Morado produced 110,414 tonnes of mineralized development material and the test milling processed 106,655 tonnes of this material at an average rate of 1,502 tonnes per day. The processing rate started at approximately 1,400 tonnes per day and ramped up to approximately 1,800 tonnes per day by the end of the period. The average head grade of this development preproduction material was 3.57 per cent zinc, 0.38 per cent copper, 0.85 per cent lead, 0.83 g/t gold and 103 g/t silver.

From the milled material, the company produced 5,021 tonnes of zinc concentrate grading 44.09 per cent zinc, 1.18 per cent copper, 1.67 per cent lead, 1.04 g/t gold and 502 g/t silver, and 2,013 tonnes of lead concentrate grading 12.86 per cent lead, 6.44 per cent zinc, 2.55 per cent copper, 4.21 g/t gold and 500 g/t silver.

Telson advises that the results achieved to date are within management's expectations, noting that mining development material is dilutive, resulting in lower head grades than will be targeted for stope mining upon completion of mine development work. Additionally, test milling and processing results are steadily improving during the Campo Morado mill recommissioning and start-up phase.

Current average metal recoveries achieved for the produced preproduction concentrates are: 58.2 per cent zinc, 14.8 per cent copper, 9.2 per cent lead, 5.9 per cent gold and 22.9 per cent silver recovered within the zinc concentrate, and 28.6 per cent lead, 12.8 per cent copper, 3.4 per cent zinc, 9.6 per cent gold and 9.2 per cent silver recovered within the lead concentrate. The top recoveries over the period reported were over 75 per cent zinc and 60 per cent lead.

Of the total 7,034 tonnes of lead and zinc concentrate produced during 2017, the company has shipped approximately 5,108 tonnes of lead and zinc concentrates and has preliminarily invoiced the buyer and received payment for a total of $4.8-million (U.S.) representing 90 per cent of company assayed metal content under the terms of an offtake agreement (see press release dated Sept. 18, 2017, for details). Final invoicing for the remaining 10 per cent will be rendered upon final closing of the sale by comparing assay results obtained by the company, the buyer and an independent third party assayer.

Antonio Berlanga, chief executive officer of Telson, stated: "We are thrilled to have realized the first successful $4.8-million (U.S.) sales of lead and zinc concentrates produced during our 2017 initial start-up testing phase of the Campo Morado mineral-processing facility as we work through the mill recommissioning process. Considering we only completed the acquisition of the Campo Morado mine in June, 2017, we believe our mining and mineral processing teams have done an exceptional job in recommissioning and tuning up the mill and related facilities. The start-up process has proceeded exactly as we envisioned, and we appreciate the support of the local communities and governments in this effort. We are nearing the completion of our underground development work on the El Largo zone and expect to soon be able to deliver a less diluted and more consistent higher-head-grade material to the mill. At the mill our process engineers have been steadily improving the processing and are achieving better base-metal recoveries and producing higher-grade lead and zinc concentrates through January and the early days of February, 2018."

About Telson Resources Inc.

Telson Resources is a Canadian-based junior resource mining company currently in preproduction at two Mexican gold, silver and base-metal mining projects, and is advancing both toward commercial production over the coming months of 2018. At the recently acquired Campo Morado mine in Guerrero, Mexico, Telson has recommenced mining and processing operations with preproduction from mine development on a trial basis at an average 1,500 tonnes per day during the recommissioning stage and intends to advance toward commercial production at full capacity of approximately 2,500 tonnes per day during 2018. Telson's Tahuehueto project, located in northwestern Durango state, Mexico, is currently in preproduction at approximately 150 tonnes per day, utilizing a toll mill for processing and has entered a construction phase with a timeline to be producing on-site in its own mineral-processing plant capable of milling at least 1,000 tonnes per day toward the end of 2018.

Qualified person

This press release was prepared under the supervision and review of Ralph Shearing, PGeol, president and director of Telson, a professional geologist registered in Alberta as a member of the professional association APEGA, and a qualified person as defined by National Instrument 43-101. Data verification by Mr. Shearing includes personal inspection of the Campo Morado mine site, reviewing mining facilities, drill core, underground development, and discussing work programs and results with geology and mining personnel.

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