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Orvana Minerals Corp
Symbol ORV
Shares Issued 136,623,171
Close 2021-11-30 C$ 0.36
Recent Sedar Documents

Orvana loses $1.11-million in fiscal 2021

2021-12-01 01:24 ET - News Release

Mr. Juan Gavidia reports

ORVANA REPORTS FY2021 RESULTS & FY2022 GUIDANCE AND ANNOUNCES A NEW 15 MILLION EURO SYNDICATED LOAN

Orvana Minerals Corp. has released financial and operational results for the fourth quarter and for the fiscal year ended Sept. 30, 2021, and has approved a 15-million-euro syndicated loan in Spain.

The audited consolidated financial statements for FY 2021 and management's discussion and analysis related thereto are available on SEDAR and on the company's website.

Juan Gavidia, chief executive officer of Orvana Minerals, stated: "We are pleased to close fiscal 2021 with a strong operational and financial performance. [Earnings before interest, taxes, depreciation and amortization] of $20-million (U.S.) allowed the company to internally fund exploration and development strategies in Spain, Argentina and Bolivia. Looking ahead to fiscal 2022, continued cash flow generation, coupled with the new cost-competitive financing in Spain, will allow us to successfully advance the organic growth strategy for all of our three units."

FY 2021 highlights:

  • Orovalle operation, Spain:
    • Consolidated production was 63,108 gold equivalent ounces (47,413 gold ounces, 6.3 million copper pounds and 166,427 silver ounces).
    • Metal production was slightly below fiscal 2021 guidance mainly due to the mid-August plant stoppage caused by the assessment of corrective measures to the tailings pumping circuits, which were impacted by the failure of a legacy open-pit wall. Underground mining continued operating throughout the plant stoppage, generating a stockpile that will be the basis to catch up fiscal 2021 delayed production into fiscal 2022.
    • Gold production was 47,413 ounces, 7 per cent lower than previous year. Production decrease was due to 10-per-cent-lower head grade, partially offset by 3-per-cent-higher throughput. Gold head grade was 2.45 grams per tonne, compared with 2.71 g/t reported last year.
    • Copper production was 6.3 million pounds, 12 per cent higher than previous year. Production increase was due to 3-per-cent-, 6-per-cent- and 2-per-cent-higher throughput, head grade and recoveries, respectively. Copper head grade was 0.53 per cent, compared with 0.50 per cent reported last year.
    • The company drilled 28,349 metres in fiscal 2021 (23,553 metres were drilled in El Valle Boinas, 2,738 metres in Carles, 1,017 metres in Lidia and 1,041 metres in Ortosa-Godan).
  • Emipa operation, Bolivia:
    • Don Mario operation continues in care and maintenance (C&M), transitioning to the oxide stockpile project (plant overhaul to treat a two-million-tonne stockpile accumulated from previous years of mining activity).
    • Critical areas of the C&M program in place are: site security, environmental control, power generator maintenance, preventive maintenance of process plant, preventive maintenance of mine equipment and maintenance of camp facilities.
    • The oxide stockpile project (OSP) quality assurance (metallurgical) testing has been completed in the second half of November, 2021, with very satisfactory results.

  • Taguas project, Argentina:
    • Completion of 4,689 m of diamond drilling in the Taguas project between February and April, 2021;
    • On July 28, 2021, the company filed the updated Taguas project new mineral resource estimate (effective June 30, 2021) in compliance with Canadian National Instrument 43-101. The updated mineral resource estimate includes both oxide and sulphide ore of three areas: Cerro Taguas, Cerro Silla Sur and Cerro Campamento, and is the result of drilling programs completed between 1985 and 2021. The June 30, 2021, mineral resource estimate highlights are:
      • 133.6-million-tonne inferred resource at 0.60 gram per tonne gold equivalent;
      • 947,000 gold equivalent ounces and 55.5 million tonnes of total resource are low-cost oxides to be prioritized for full development;
      • Sulphides of 1,649,000 AuEq oz and 78.2 Mt of total resource.

Cautionary statement: Mineral resources are not mineral reserves and do not have demonstrated economic viability. The mineral resource for the Taguas project was prepared in compliance with National Instrument 43-101 and CIM (Canadian Institute of Mining, Metallurgy and Petroleum) guidelines, as set out in the independent technical report, "NI 43-101 on the Taguas Project, San Juan, Argentina, dated June 30, 2021, and effective as of June 30, 2021." A copy of the 2021 report is posted under the company's profile on SEDAR. These mineral resources were estimated using a gold price of $1,700 per ounce, a copper price of $3.25 per pound and a silver price of $20 per ounce, which prices were used in the 2021 report.

Fiscal 2022 outlook

The company continues to implement comprehensive and pro-active measures to respond to the COVID-19 pandemic, and continues to work closely with local governments and authorities to ensure that proper protocols are followed during the continuing COVID-19 crisis. The overall impact on each of the sites will depend on the progression of the pandemic and measures in place for preventing transmission.

The company continues to pursue its objectives of optimizing production, lowering unitary cash costs, maximizing free cash flow and extending the life of mine of its operations under a long-term operational strategy. Main objectives per unit are:

  • Orovalle: strong cash flow generation based on stable production plan; continue exploration drive to keep replenishing, and expanding, the resource base; renew five-year life-of-mine plan on an annual basis, as has been the case for the last five years;
  • Orvana Argentina: complete a new preliminary economic assessment on the Taguas project in first quarter FY 2022; start infill drilling program in Q1 FY 2022, required to develop prefeasibility study;
  • Emipa: determine the viability of the OSP in fiscal 2022; subject to approval and financing, construction is planned for fiscal 2023; with a three-year production life between 2024 and 2026; scoping studies for a subsequent project regarding reprocessing tailings will be under way in fiscal 2022; a comprehensive exploration program that started in fiscal 2021 is planned to continue throughout fiscal 2022, with non-drilling field and cabinet work.

FY 2022 guidance

The company is pleased to provide FY 2021 results and FY 2022 guidance for its operating unit in Spain.

New 15-million-euro syndicated loan

Orvana has been evaluating alternatives to finance the development of the Taguas project in Argentina and structural capital expenditures in Spain. Subsequent to Sept. 30, 2021, the company, through its wholly owned subsidiaries Orovalle Minerals SL and Orvana Minerals Iberia SL, has obtained approval from two Spain-based banks to access a syndicated loan for 15 million euros.

The closing of the syndicated loan is subject to the execution of applicable legal documentation, and is expected by December, 2021. Once closed, the syndicated loan will provide the company with improved financial metrics to fulfill its growth strategy.

The syndicated loan bears a variable interest rate of euro interbank offered rate plus 2.5 per cent, with semi-annual repayments over a four-year term, and is subject to a 1.5-per-cent commission fee. Orvana's obligations are secured by the pledge of Orovalle and Iberia's shares. Amongst the obligations, the ratio net finance debt to EBITDA (earnings before interest, taxes, depreciation and amortization), calculated based on the aggregated financial information of Orovalle and Iberia, must be, throughout the life of the financing, less than 3.5.

About Orvana Minerals Corp.

Orvana is a multimine gold-copper-silver company. Orvana's assets consist of the producing El Valle and Carles gold-copper-silver mines in northern Spain, the Don Mario gold-silver property in Bolivia, currently in care and maintenance, and the Taguas property located in Argentina.

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