World News: 13:00 GMT Wednesday 14th August 2019. [Sprott Resource Holdings via Globe Newswire via SPi World News]
TORONTO, Aug. 14, 2019 (GLOBE NEWSWIRE) -- - Sprott Resource Holdings Inc. ("" or the "") today announced its financial results for the three and six months ended June 30, 2019. The Company's principal operating business is its 70% equity interest in the Chilean producing copper mine Minera Tres Valles (""). The Company's financial statements and management's discussion and analysis ("") are available at and .
"This was a capital intensive quarter for MTV at two of our growth projects. We were three months ahead of schedule for salt application, and early results match our expectations of faster and higher recovery rates," said Michael Harrison, Interim President and CEO of SRHI. "Our crushing throughput reached a new record as our expansion plan continues. This is an important year for MTV as we undertake projects to grow copper production to match our plant capacity of 40 million pounds of copper cathodes per year."
"Earlier today, we announced that MTV had signed an investment committee approved mandate letter with Anglo American Marketing Limited and our current lender, a fund under the investment management of Kimura Capital LLP, to provide $45 million in funding for the expansion projects and to re-finance existing debt. SRHI had provided funding to successfully increase production from Don Gabriel, and build the infrastructure for the salt leach project,” continued Michael Harrison.
“The proceeds of the loan will advance the underground development at Papomono Massive deposit, finalize the salt-leach project, and the remaining capital pre-strip at Don Gabriel, along with working capital and debt repayment. The addition of higher grade ore from Papomono, using lower-cost caving methods will increase production and is expected to materially reduce operating costs. We expect to have final detailed engineering from Ingeroc (Santiago) at the end of August, and we expect to mobilize the underground contractor in advance of closing the facility, which is expected early in the fourth quarter.”
Guidance for 2019 remains unchanged with copper production to accelerate in the second half of 2019 with the staged implementation of the Salt Leach and increased mining rates at Don Gabriel and Rajo Norte. Cash cost per pound produced was at the upper end of the 2019 guidance and as copper production is expected to increase quarter-over-quarter, and together with the expected efficiencies of the Salt Leach, this unit cost is expected to reduce accordingly. MTV has been funding the Don Gabriel production expansion and Salt Leach project from internal and Company financial resources. With the recent positive news regarding the Facility for MTV, the capital expenditure program will accelerate and continue through the fourth quarter of the year when the Papomono underground development and expansion is scheduled to begin. Final results from detailed engineering by Ingeroc (Santiago) are expected at the end of August, and mobilization of the underground contractor is expected prior to the closing of the Facility.
Final approval for the required permits is expected in the third quarter of 2019 and once the Facility is in place, MTV will start the development of access levels and draw points. Initial development is expected to take 10 months, prior to commencement of extraction. Mineralized material supplied by ENAMI and local miners have increased in 2019 providing additional ore to the crusher given its current excess capacity. The processing of non-MTV mineralized material has good margins, utilizes excess capacity, requires no capital spend and benefits local community members.
The annual budget cycle has commenced and the forecast for production and costs together with operating results for 2019 are expected to be provided early in 2020.
SRHI will hold a conference call and webcast to review its results for the three and six months ended June 30, 2019 on Wednesday, August 14, 2019 at 4:00pm Toronto time. To listen to the call, please dial (855) 458.4215 ten minutes prior to the scheduled start of the call and provide conference ID:7466906. A taped replay of the conference call will be available until Wednesday, August 21, 2019 by calling (855) 859.2056. The conference call will be webcast at and
Scientific or technical information in this press release relating to MTV is based on information prepared by Dr Antonio Luraschi, RM CMC, Manager of Metallurgic Development and Senior Financial Analyst, Wood; Mr Sergio Navarrete, RM CMC, Mining Engineer, Wood; Mr Alfonso Ovalle, RM CMC, Mining Engineer, Wood; Mr Michael G. Hester, FAusIMM, Vice President and Principal Mining Engineer, Independent Mining Consultants, Inc.; Mr Enrique Quiroga, RM CMC, Mining Engineer, Q&Q Ltda; Mr Gabriel Vera, RM CMC, Metallurgical Process Consultant, GVMetallurgy; and Mr Sergio Alvarado, RM CMC, Consultant Geologist, General Manager and Partner, Geoinvestment Sergio Alvarado Casas E.I.R.L., all of whom are independent “Qualified Persons” as such term is defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects. The Technical Report was filed by SRHI on SEDAR on December 14, 2018. Readers are encouraged to read the Technical Report in its entirety.
Please note that the PEA Case is preliminary in nature, that it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA Case will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
MTV is an operating mining complex located 300 kilometers northeast of Santiago, Chile in Region IV near the town of Salamanca. MTV comprises two main deposits: Papomono (underground) and Don Gabriel (open pit). The mine is currently operating and producing high-grade copper cathode. The mine has significant infrastructure in place with a crushing and processing plant with nameplate capacity of 7,000 and 6,000 tonnes per day, respectively. The plant is designed to produce up to 18,500 tonnes per annum of LME Grade 99.999% copper cathodes. For more information about MTV, please visit .
SRHI acquires and grows a portfolio of cash-flowing businesses and businesses expected to cash flow in the natural resource sector. Based in Toronto, SRHI is part of the Sprott Group of Companies and seeks to deploy capital to provide our investors with exposure to attractive commodities. For more information about SRHI, please visit .
"Cash costs", "Adjusted EBITDA" and "Working Capital" are non-IFRS financial performance measures. Further details on non-IFRS measures are provided in the MD&A accompanying SRHI financial statements filed from time-to-time on SEDAR at .
Certain statements in this news release, contain forward-looking information (collectively referred to herein as the "") within the meaning of applicable Canadian securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify Forward-Looking Statements. In particular, but without limiting the foregoing, this news release contains Forward-Looking Statements pertaining to: expectations regarding production growth; expectations regarding the MTV mine expansion, including the anticipated expansion methods, costs, timing and the benefits derived from the expansion; expectations regarding the costs, timing and benefits of the Salt Leach; continued ramp up of waste mining activity; material reduction in operating costs; completion of engineering by Ingeroc; growth initiatives; future block caving efforts and the expected benefits therefrom; expectations regarding the timing of permit approvals; securing long-term debt and offtake financing from Anglo American and Kimura to fund growth initiatives on the terms and conditions provided above; expectations regarding the investment portfolio divestment; the Company's outlook, including its 2019 guidance for MTV; the capital expenditure program for MTV; mineral resource and mineral reserve estimates; the Technical Report; and general business and economic conditions.
Although SRHI believes that the Forward-Looking Statements are reasonable, they are not guarantees of future results, performance or achievements. A number of factors or assumptions have been used to develop the Forward-Looking Statements, including: there being no significant disruptions affecting the development and operation of MTV; the availability of certain consumables and services and the prices for power and other key supplies being approximately consistent with assumptions in the Technical Studies; labour and materials costs being approximately consistent with assumptions in the Technical Studies; fixed operating costs being approximately consistent with assumptions in the Technical Studies; permitting and arrangements with stakeholders being consistent with current expectations as outlined in the Technical Studies; certain tax rates, including the allocation of certain tax attributes, being applicable to MTV; the availability of financing for MTV’s planned development activities; assumptions made in mineral resource and mineral reserve estimates and the financial analysis based on the mineral reserve estimate and in the case of the PEA, the mineral resource estimate, including (as applicable), but not limited to, geological interpretation, grades, commodity price assumptions, metallurgical performance, extraction and mining recovery rates, hydrological and hydrogeological assumptions, capital and operating cost estimates, and general marketing, political, business and economic conditions. Actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements should assumptions underlying the Forward-Looking Statements prove incorrect or should one or more risks or other factors materialize, including: (i) possible variations in grade or recovery rates; (ii) copper price fluctuations and uncertainties; (iii) delays in obtaining governmental approvals or financing; (iv) risks associated with the mining industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to mineral reserves, production, costs and expenses; and labour, health, safety and environmental risks) and risks associated with the other portfolio companies' industries; (v) performance of the counterparty to the ENAMI Tolling Contract; (vi) risks associated with investments in emerging markets; (vii) general economic, market and business conditions; (viii) market volatility that would affect the ability to enter or exit investments; (ix) failure to secure financing in the future on terms acceptable to the Company, if at all; (x) commodity price fluctuations and uncertainties; (xi) those risks disclosed under the heading "Risk Management" in SRHI’s Management’s Discussion and Analysis for the three-months ended June 30, 2019; and (xii) those risks disclosed under the heading "Risk Factors" or incorporated by reference into SRHI’s Annual Information Form dated March 6, 2019. See also the cautionary language under “Notes on Preliminary Economic Assessments” above. The Forward-Looking Statements speak only as of the date hereof, unless otherwise specifically noted, and SRHI does not assume any obligation to publicly update any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable Canadian securities laws.
This news release may use the terms "measured", "indicated" and "inferred" mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.
Michael HarrisonPresident and CEOT: (416) 943-4995E:
Source: Sprott Resource Holdings Inc.
Globe Newswire: 13:00 GMT Wednesday 14th August 2019
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