Company Website:
http://www.telsonresources.com
VANCOUVER, British Columbia -- (Business Wire)
Telson Mining Corporation (“Telson” or the “Company”) (TSX Venture –
TSN.V) (OTCBB: SOHFF) (Frankfurt: TSGN (formerly SQ82)) is extremely
pleased to announce the start of commercial production at its 100% owned
Campo Morado Mine ("Campo Morado" or the "Project") located in Guerrero
State, Mexico, with over 60 days of operational steady state production
at 75% of management’s targeted mill capacity of 2,500 tonnes per day,
achieving zinc recoveries and concentrate grades within management’s
expectations.
Telson Mining Corporation (“Telson” or the “Company”) (TSX Venture –
TSN.V)(OTCBB:SOHFF) is extremely pleased to announce the start of
commercial production at its 100% owned Campo Morado Mine ("Campo
Morado" or the "Project") located in Guerrero State, Mexico, with over
60 days of operational steady state production at 75% of management’s
targeted mill capacity of 2,500 tonnes per day, achieving zinc
recoveries and concentrate grades within management’s expectations.
José Antonio Berlanga, Director and CEO, states: "Achieving commercial
production at Campo Morado is a major milestone for Telson. When we
commenced pre-production activities in October 2017, we provided
guidance that we expected to declare commercial production in Q3, 2018.
To do so mid Q2, a full 3 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 (sub level 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 Q1. We generated approximately US$7.7M in cash flow
during the three months of Q1, and increased to US$5.2M in April alone,
which based on costs of approximately US$3.5M resulted in net cash flow
for the month of US$1.7M. 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 Q3/Q4. 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% obtained during the past
60 operational days.
-
Zinc concentrate average grade of approximately 44% zinc, 404 g
silver/tonne and 1.42g gold/ tonne achieved during the past 60
operational days.
-
Bulk underground mining methods underway after extensive development
phase to allow production rate increase towards planned 2,500 tonnes
per day.
-
Highlights of pre-production since reporting on 1st quarter
ending March 31st, 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% Zn, 2.95% Pb, 373 g/t Ag,
1.31 g/t Au and for first 15 days of May (2,073.3 tonnes) 44.93%
Zn, 2.48% Pb, 444 g/t Ag, 1.42 g/t Au.
-
Produced 1065.8 tonnes of lead concentrate with average grades for
April (633.4 tonnes) of 37.22% Pb, 9.12% Zn, 859 g/t Ag, 7.51 g/t
Au and for first 15 days of May (432.4 tonnes) 27.7% Pb, 9.33% Zn,
713 g/t Ag, 6.17 g/t Au.
-
Recoveries of approximately 73% zinc, 31% lead, 31% silver and 20%
gold.
-
Delivered 5,631 tonnes of zinc concentrate and 1027 tonnes of lead
concentrate to buyer.
-
Concentrate pre-production April 1 – May 15, 2018, management’s
estimated 100% concentrate sale value for 45 days ending May 15,
2018 (start of commercial production) – US $7.7 million.
-
April 1 – 30th – US $5.2 million
-
May 1 – 15th – US $2.5 million
Note: Shipped concentrates are paid at 90% estimated metal content
less deductions upon delivery to Trafigura warehouse in Manzanillo.The
estimated 100% 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% is paid.
Cautionary note on non-IFRS (international financial reporting
standards) performance measures related to cash sales of concentrates
and direct site operation costs as outlined above.
Readers should be cautioned that cash sales should not be equated
with revenues. Any proceeds from the sale of concentrates during
preproduction are considered under IFRS to be applied as an offset to
development costs and not counted as revenues on Telson’s income
statement. As Telson has now declared commercial production at Campo
Morado, proceeds from concentrate sales from May 15, 2018 forward will
be reflected as revenues on its income statement.Telson is not,
during the pre-production stage, able to disclose the costs/expenses
associated with generating such cash sales or provide guidance on
profitability (if any), however, Telson intends to commence reporting on
a quarterly basis commencing Q2 2018, now that it has declared
commercial production at Campo Morado.
This news release refers to total direct site costs, which are
non-IFRS performance measures. The Company believes that these measures,
in addition to conventional measures prepared in accordance with IFRS,
provide investors an improved ability to evaluate the underlying
performance of the Company. The non-IFRS measures are 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. These measures do not have any standardized meaning
prescribed under IFRS and therefore may not be comparable with other
issuers.
Direct site costs - Telson is reporting direct site costs on per
tonne of mineral processed. Sale proceeds reported are from
preproduction during the mine’s commissioning period. 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 operating earnings and
cash flow from its mining operations. Management also uses this metric
as an important tool to monitor operating performance. Direct site costs
are calculated using costs such as costs incurred in mining, processing
and site administration divided by total tonnages processed. Costs are
exclusive of depreciation and other non-cash items. Other companies may
calculate this measure differently.
About Telson Mining Corporation
Telson Mining Corporation is a
Canadian based mining company with two Mexican gold, silver and base
metal mining projects.
Telson is currently in production at its 100% owned Campo Morado Mine in
Guerrero, Mexico. Telson acquired Campo Morado in June 2017,
re-commenced mining and processing operations in October 2017 with
pre-production 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% of the
Campo Morado mill’s nameplate capacity of 2,500 tonnes per day.
Telson's Tahuehueto Project, located in north-western Durango State,
Mexico is currently in pre-production 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 Q1,
2019. Regular metal concentrate delivery and sales are underway from
both projects.
Visit: www.telsonmining.com
On behalf of the board of directors
(signed) “Ralph Shearing”
Ralph Shearing, P.Geol, President and Director
Qualified Persons
This press release was prepared under the
supervision and review of Ralph Shearing, P.Geol., President and
Director of Telson Resources Inc., a Professional Geologist registered
in Alberta as a member of the professional association APEGA, and a
Qualified Person as defined by NI 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.
Cautionary Note Regarding Production Decisions and Forward-Looking
Statements
It should be noted that Telson has declared
commercial production at Campo Morado prior to completing a feasibility
study of mineral reserves demonstrating economic and technical viability.Accordingly, readers should be cautioned that Telson’s production
decision has been made without a comprehensive feasibility study of
established reserves such that there is greater risk and uncertainty as
to future economic results from the Campo Morado mine and a higher
technical risk of failure than would be the case if a feasibility study
was completed and relied upon to make a production decision.Telson
has completed a preliminary economic assessment (“PEA”) mining study on
the Campo Morado mine that provides a conceptual life of mine plan and a
preliminary economic analysis based on the previously identified mineral
resources (see News Release dated November 8, 2017 and April 4,2018).This will soon be replaced by a pre-feasibility study (“PFS”) that
will allow the application of modifying factors to the mineral resources
to allow a portion of them to be converted to mineral reserves.
Statements contained in this news release that are not historical
facts are “forward-looking information” or “forward-looking statements”
(collectively, “Forward-Looking Information”) within the meaning of
applicable Canadian securities laws. Forward Looking Information
includes, but is not limited to, disclosure regarding possible events,
conditions or financial performance that is based on assumptions about
future economic conditions and courses of action; the timing and costs
of future activities on the Company’s properties, such as production
rates and increases; success of exploration, development and bulk sample
processing activities and timing for processing at its own mineral
processing facility on the Tahuehueto project site. In certain cases,
Forward-Looking Information can be identified by the use of words and
phrases such as “plans”, “expects”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates” or variations of such words and
phrases. In preparing the Forward-Looking Information in this news
release, the Company has applied several material assumptions,
including, but not limited to, that the current exploration,
development, environmental and other objectives concerning the Campo
Morado Mine and the Tahuehueto Project can be achieved, the continuity
of the price of gold, zinc, lead and other metals, economic and
political conditions and operations. Forward-Looking Information
involves known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or
achievements expressed or implied by the Forward-Looking Information.
There can be no assurance that Forward-Looking Information will prove to
be accurate, as actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers should
not place undue reliance on Forward-Looking Information. Except as
required by law, the Company does not assume any obligation to release
publicly any revisions to Forward-Looking Information contained in this
news release to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.
Neither 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 release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180523005359/en/
Contacts:
Telson Mining Corporation
Glen Sandwell, +1 (604) 684-8071
Corporate
Communications Manager
ir@telsonmining.com
Source: Telson Mining Corporation
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