Mr. Ralph Shearing reports
TELSON MINING CORPORATION DECLARES COMMERCIAL PRODUCTION AT ITS CAMPO MORADO MINE AS OF MAY 15, 2018, AND GENERATES US$7.7M CASH FLOW IN FINAL MONTH AND A HALF (APRIL 1 TO MAY 15, 2018) OF PRE-PRODUCTION
Telson Mining Corp. has started commercial production at its 100-per-cent-owned
Campo Morado mine located in Guerrero
state, Mexico, with over 60 days of operational steady-state production
at 75 per cent of management's targeted mill capacity of 2,500 tonnes per day,
achieving zinc recoveries and concentrate grades within management's
expectations.
Telson Mining is extremely pleased to announce the start of
commercial production at its 100-per-cent-owned Campo Morado mine located in Guerrero state, Mexico, with over
60 days of operational steady state production at 75 per cent of management's
targeted mill capacity of 2,500 tonnes per day, achieving zinc
recoveries and concentrate grades within management's expectations.
Jose Antonio Berlanga, director and chief executive officer, stated: "Achieving commercial
production at Campo Morado is a major milestone for Telson. When we
commenced preproduction activities in October, 2017, we provided
guidance that we expected to declare commercial production in the third quarter of 2018.
To do so mid-second quarter, a full three months ahead of schedule, is a testament to
the tremendous skill and expertise of our mining team and the hard work
of our employees. We would like to thank all the stakeholders,
especially the local communities that have supported us during this
restart. We have successfully implemented a new bulk mining method at
Campo Morado (sublevel caving rather than room and pillar mining) and
in April, 2018, we transitioned from processing development mineralized
material to mining mineralized material within one area of the El Largo
zone. As a result, our grades, recoveries and cash flows improved
dramatically from the first quarter. We generated approximately $7.7-million (U.S.) in cash flow
during the three months of the first quarter, and increased to $5.2-million (U.S.) in April alone,
which based on costs of approximately $3.5-million (U.S.) resulted in net cash flow
for the month of $1.7-million (U.S.). For the first time in Telson's history we will
now start booking revenues. Our goal at Campo Morado is to increase
throughput at the mill to 2,500 tonnes per day by the third quarter/fourth quarter. We are also
investigating new technologies to improve precious metals recoveries."
Campo Morado production milestones:
-
Mill processed 112,480.9 tonnes of mineralized material during the
past 60 operational days at an average daily rate of 1,875 tonnes per
day;
- Average zinc recoveries of approximately 73 per cent obtained during the past
60 operational days;
- Zinc concentrate average grade of approximately 44 per cent zinc, 404 grams per tonne silver and 1.42 g/t gold achieved during the past 60
operational days;
- Bulk underground mining methods under way after extensive development
phase to allow production rate increase toward planned 2,500 tonnes
per day;
-
Highlights of preproduction since reporting on first quarter
ending March 31, 2018 (see news release dated April 18, 2018), to
start of commercial production May 15, 2018 (45-day period) as follows:
- 84,588.8 tonnes processed through milling facility at an average
daily rate of 1,900 tonnes/day;
- Produced 6,708.8 tonnes of zinc concentrate with average grades
for April (4,635.5 tonnes) of 43.82 per cent zinc, 2.95 per cent lead, 373 g/t Ag,
1.31 g/t Au and for first 15 days of May (2,073.3 tonnes) 44.93 per cent
Zn, 2.48 per cent Pb, 444 g/t Ag, 1.42 g/t Au;
-
Produced 1,065.8 tonnes of lead concentrate with average grades for
April (633.4 tonnes) of 37.22 per cent Pb, 9.12 per cent Zn, 859 g/t Ag, 7.51 g/t
Au and for first 15 days of May (432.4 tonnes) 27.7 per cent Pb, 9.33 per cent Zn,
713 g/t Ag, 6.17 g/t Au;
-
Recoveries of approximately 73 per cent zinc, 31 per cent lead, 31 per cent silver and 20 per cent
gold;
-
Delivered 5,631 tonnes of zinc concentrate and 1,027 tonnes of lead
concentrate to buyer;
-
Concentrate preproduction April 1 to May 15, 2018, management's
estimated 100-per-cent concentrate sale value for 45 days ending May 15,
2018 (start of commercial production) -- $7.7-million (U.S.):
-
April 1 to April 30 -- $5.2-million (U.S.);
-
May 1 to May 15 -- $2.5-million (U.S.).
Note
Shipped concentrates are paid at 90-per-cent estimated metal content
less deductions upon delivery to Trafigura warehouse in Manzanillo.
The
estimated 100-per-cent cash selling price is subject to minor changes once final
assaying results are agreed to by the company and Trafigura at which
time the final approximate 10 per cent is paid.
About Telson Mining Corp.
Telson Mining is a
Canada-based mining company with two Mexican gold, silver and base
metal mining projects.
Telson is currently in production at its 100-per-cent-owned Campo Morado mine in
Guerrero, Mexico. Telson acquired Campo Morado in June, 2017,
recommenced mining and processing operations in October, 2017, with
preproduction from mine development on a trial basis that commenced at
an average 1,400 tonnes per day and has just declared commercial
production based on operating for 60 consecutive days at 75 per cent of the
Campo Morado mill's nameplate capacity of 2,500 tonnes per day.
Telson's Tahuehueto project, located in northwestern Durango state,
Mexico, is currently in preproduction at approximately 100 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 in the first quarter of
2019.
Qualified persons
This press release was prepared under the
supervision and review of Ralph Shearing, PGeol, president and
director of Telson Resources, 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.
We seek Safe Harbor.
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