VANCOUVER, Aug. 22, 2017 /CNW/ - IMPACT Silver Corp. ("IMPACT" or the "Company") announces its financial and production results for the second quarter of 2017.
Fred Davidson, President and CEO, stated, "We started 2017 with a clean balance sheet and no debt along with news that IMPACT was named to the 2017 TSX Venture 50. During the first half of the year, IMPACT invested heavily in upgrading and repairing its capital equipment while also trying to improve its throughput to partially compensate for weaker silver prices. IMPACT is also actively expanding its in-mine exploration and development to provide additional tonnage throughput at the mill. We hope that these efforts will translate into better financial and operating performance in the latter half of the year. We look forward to our ongoing exploration plans at high potential targets and continue to evaluate strategic transactions to continue growing value for our shareholders."
Financial Overview
- Revenues remained the same at $8.2 million for the six months ended June 30, 2017 compared to last year mainly due to higher tonnage throughput offset by a drop-in silver prices throughout the year.
- Mine operating loss for the six months ended June 30, 2017 was $0.3 million compared to operating earnings of $1.0 million in the comparable period of 2016. Mine operating earnings before amortization and depletion1 was $0.8 million for the six months ended June 30, 2017 compared to $2.1 million in the same period of last year.
- Net loss for the six months ended June 30, 2017 was $1.4 million which included $1.9 million of foreign exchange loss and non-cash items of amortization, depletion and share based compensation. This compared to a $0.5 million net loss for the first six months of 2016, which included $1.7 million of foreign exchange loss and non-cash items in amortization and depletion. Excluding foreign exchange and non-cash items, adjusted net earnings for the six months ended June 30, 2017 were $0.5 million compared to $1.2 million in the same period of 2016.
- Earnings before interest, taxes, depreciation and amortization2 (EBITDA) decreased to a loss of $0.4 million for the first half of 2017 compared to earnings of $0.9 million in the same period of 2016.
- The Company's cash position at June 30, 2017 remains strong at $6.8 million, with net working capital of $8.6 million (2016 - $11.5 million).
- During the quarter, the Company completed the sale of its non-active Zacatecas assets (200 tpd mill, 14 hectares surface rights and 10 mineral concessions) to Endeavour Silver Corp. (TSX:EDR, NYSE: EXK) for 154,321 common shares valued at CDN$0.6 million. The Company recorded a gain of $0.3 million on the transaction.
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| 1 Mine operating earnings before amortization and depletion is a non-IFRS measure which the Company believes provides additional information regarding how the Company's operations are performing. |
| 2 Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-IFRS measure which the Company believes provides meaningful information about the Company's financial performance. |
| See "NON-IFRS MEASURES". |
Production Overview
- Production at the Guadalupe mill during the second quarter of 2017 came primarily from the San Ramon Deeps Mine (41% of total mill feed), the Cuchara Mine (36% of mill feed), the Mirasol Mine (10% of mill feed), and the San Patricio (Chivo) Mine (13% of mill feed). The grade at San Ramon is highly variable and the production at Mirasol ended during the quarter as it reached the end of its mine life and had declining grades. The mining at the San Patricio (Chivo) Mine had lower grades as some of the material was development muck. These factors contributed to a lower grade mill feed in the second quarter of 2017 compared to 2016.
- Average mill feed grade for silver was 173 grams per tonne (g/t) in the second quarter of 2017, down from 180 g/t in the same period of 2016.
- Silver production decreased to 227,503 ounces in the second quarter of 2017 from 235,990 ounces in comparable period of 2016 due to lower grade feed and temporarily lower silver recovery during the quarter.
Health and Safety Awards
IMPACT's mining team recently received recognition The Award for Excellence in health and safety standards by the Secretary of Labour and Social Welfare in Mexico. This recognition acknowledges the Company's effective working environment, strong relationships with its employees, and reduced workplace accidents, illnesses and absenteeism.
This award and others like it are testaments to IMPACT's dedication to an industry leading standard in health and safety of our staff and contractors.
Exploration
The Company is continuing exploration with the goal of putting some of the 4,500+ compiled old mine workings in the Zacualpan and Capire districts on a faster track to potential production and build mineral inventories for mining. The Company has initiated surface and underground drilling programs to expand resources. Currently, exploration work is focused on larger and higher-grade targets at Alacran and Alacran North. Surface drilling is currently in progress at the San Felipe prospect located near the Guadalupe plant access road.
IMPACT has control of the majority of two entire mineral districts in central Mexico: the Royal Mines of Zacualpan Silver District and the Capire-Mamatla Mineral District adjacent to and southwest of Zacualpan.
IMPACT has a track record of successful exploration and rapid mine development. The Company's long-term vision sees potential for establishing mills throughout the two districts, each fed by multiple mines producing silver-lead-zinc as well as gold and copper.
The Company continues to look for expansion either through ongoing exploration programs and/or strategic acquisitions and transactions.
A recorded conference call reviewing the financial and production results of the second quarter of 2017 will be available on the Company website on August 23, 2017, at www.impactsilver.com/s/ConferenceCalls.asp.
The information in this news release should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements and Management's Discussion and Analysis, available on the Company website at www.impactsilver.com and on SEDAR at www.sedar.com. All amounts are stated in Canadian dollars unless otherwise specified.
Additional information about the Company and its operations can be found on the website, www.impactsilver.com.
