VANCOUVER, Nov. 30, 2017 /CNW/ - Marlin Gold Mining Ltd. (TSX-V: MLN) ("Marlin" or the "Company") is pleased to announce its financial results for the three and nine months ending September 30, 2017 ("Q3" and the "First Nine Months 2017," respectively). This press release should be read in conjunction with the Company's Condensed Interim Consolidated Financial Statements for the three and nine months ended September 30, 2017 and 2016 as well as Management's Discussion & Analysis ("MD&A") for the same period, available on the Company's website at www.marlingold.com and under the Company's name on SEDAR at www.sedar.com. All monetary amounts are expressed in Canadian dollars unless otherwise specified.
Marlin began continuously mining the high grade HS Zone at the La Trinidad gold mine in Sinaloa, Mexico (the "La Trinidad Mine") on September 15, 2016, and began recovering gold from this area early in the fourth quarter of 2016 ("Q4"). For the First Nine Months 2017, the Company produced 29,955 ounces of gold and sold 36,112 ounces.
Adjusted EBITDA was $0.0 million ($0.00 per share) and $27.1 million ($0.16 per share) in Q3 and the First Nine Months 2017, respectively.1 Net Loss was $6.7 million ($0.04 per share) and $13.9 million ($0.08 per share) in Q3 and the First Nine Months 2017, respectively.
The current assets of the Company at Q3 stand at $42.3 million ($0.25 per share). Cash and finished gold account for $1.9 million of current assets, while inventories account for $17.2 million. Inventories included $1.3 million of finished gold and $14.4 million of gold-in-process. Investments in shares of Golden Reign Resources Ltd. stood at $12.7 million at quarter end.
Akiba Leisman, Executive Chairman and Interim CEO states that, "Q3 was an especially active quarter for Marlin. Most of the activity focused on expanding and deepening the north side of the Taunus pit and mitigating the rainy season at the La Trinidad Mine. Rainy season ended in early October and the Company regained access to the remaining high grade HS Zone in the north side of the Taunus pit. The Company is now focused on accessing the high grade HS Zone in the south side of the pit, drilling exploration targets at Colinas (less than one kilometer from the pit) and completing an expanded 30-hole exploration program at Commonwealth."
Q3 and First Nine Months 2017 Highlights
- Production of 29,955 (2016 – 5,106) ounces of gold in the First Nine Months 2017
- Sale of 36,112 (2016 – 5,651) ounces of gold in the First Nine Months 2017
- Revenue of $58.2 million (2016 – $9.5 million) in the First Nine Months 2017
- On July 5, 2017, August 8, 2017 and August 30, 2017, the Company received US$2 million, US$5 million and $1.9 million, respectively, from the Wexford Funds, increasing the Wexford Loan to US$38.9 million
- On August 17, 2017, the Company completed the acquisition of the Gavilanes Property located in Durango State, Mexico from Santacruz Silver Mining Ltd for total consideration of US$3.6 million
- On August 25, 2017, the Wexford Funds extended the maturity on the Wexford Loan by one year
- In the First Nine Months 2017, the Company initiated another normal course issuer bid (the "NCIB"), pursuant to which the Company has purchased 1.26 million common shares in the capital of the Company. All common shares acquired by the Company under the NCIB have been returned to treasury and cancelled
Highlights Subsequent to September 30, 2017
- On October 24, 2017 and November 14, 2017, the Company received US$1.1 million and US$1.5 million, respectively, from the Wexford Funds, increasing the Wexford Loan to US$41.5 million.
- On October 30, 2017, the Company received $89,416 (US$69,655), the cash equivalent of the second 55 troy ounces of gold as part of the proceeds from the sale of the El Compas gold-silver mining project
La Trinidad Update
The Company mined what could safely be accessed in the north part of the high grade HS Zone by January 2017. During this time, a surface stockpile was accumulated that, when combined with inventory in the leach pad, reached $40.3 million of gold-in-process in Q4. The surface stockpile was largely depleted in Q2 2017 and the proceeds were used to fund waste removal to regain access to the high grade HS Zone and a leach pad expansion.
Marlin returned to mining high grade HS Zone mineralization in the north side of the Taunus pit in early August. Since then, gold stacked to the leach has been steadily increasing. Month-to-date November, over 5,700 ounces of gold have been stacked on the leach pad, daily gold recoveries are now exceeding 125 ounces and expected to continue to rise and a stockpile of approximately 20,000 tonnes (containing approximately 1,200 ounces of gold) has been accumulated in front of the crusher. Importantly, mining of the high grade mineralization in the south HS Zone is expected to commence in approximately two months.
A drill program at the Colinas target less than one kilometer from the Taunus pit commenced with assays on the first two holes released earlier this week. Diamond drill hole 17COLDDH02 intersected 10.57 g/t Au over 6.00 meters (see press release dated November 27, 2017). Assays from additional drill holes at Colinas are expected by year-end.
Commonwealth Update
In the First Nine Months 2017, $3.2 million of exploration was expensed at Marlin's wholly owned Commonwealth silver and gold property in Cochise County, Arizona (the "Commonwealth Project"). Notably, drill results at the Commonwealth Project are surpassing the Company's expectations. Specifically, results from the Six Mile Hill target (see press release dated July 17, 2017) are pointing to a discovery that the Company is aggressively following up on. An expanded 30-hole drill program (up from 15) is currently underway at Six Mile Hill with first results expected in early January. Additionally, an approximately 10-tonne comprehensive metallurgical program is also underway, with results also expected early in 2018.
Sailfish Update
On June 27, 2017, Sailfish entered into a definitive agreement to acquire a 3.5% royalty (the "TZ Royalty") on the advanced stage Tocantinzinho gold project in Brazil owned by Eldorado Gold Corp. for US$6.5 million in cash and US$5.5 million in common shares of Sailfish (see press release dated June 28, 2017). The TZ Royalty, along with Sailfish's interest in the gold stream agreement with Golden Reign Resources Ltd. on its high grade San Albino gold deposit in Nicaragua (the "SA Gold Stream"), which is expected to begin production in late 2018, gives Sailfish enough scale to operate as a separate publicly traded royalty company.
Marlin received an interim order from the Supreme Court of British Columbia dated November 15, 2017, authorizing the Company to convene an annual and special meeting of its shareholders on December 14, 2017 for the purpose of, among other things, considering and approving an arrangement under the Business Corporations Act (British Columbia) (the "Arrangement"), which would result in the spin-out of Sailfish to Marlin's shareholders (the "Spin-out"). Marlin expects to complete the Spin-out shortly thereafter, subject to the concurrent closing of the acquisition of the TZ Royalty.
Gavilanes Acquisition
On August 17, 2017, Marlin completed the acquisition of the Gavilanes property in Durango, Mexico for cash consideration of US$3.5 million, plus applicable value added taxes (see joint press release dated August 17, 2017). The Company will be evaluating next steps for the Gavilanes property, which may include the creation of a separate publicly traded exploration company.
Wexford Loan
Principal on the loan owed to affiliates of the Company's controlling shareholder, Wexford Capital LP (together the "Wexford Funds"), stood at US$38.9 million at Q3. During the quarter, the Wexford Funds extended the maturity on the Wexford Loan by one year to January 15, 2019 for no additional fees. Subsequent to the quarter end, an additional US$2.6 million in loans were received to support exploration efforts at Commonwealth and La Trinidad.
| Financial Summary ($000's) | Q3 2017 | Q3 2016 | First Nine Months 2017 |
First Nine Months 2016 |
| Revenue | 8,825 | 3,539 | 58,175 | 9,447 |
| Net profit (loss) | (6,680) | (6,087) | (13,872) | (18,196) |
| Net profit (loss) per share | (0.04) | (0.04) | (0.08) | (0.13) |
| Adjusted EBITDA (1) | (13) | (1,926) | 27,138 | (2,144) |
| Adjusted EBITDA per share (1) | (0.00) | (0.01) | 0.16 | (0.02) |
| Gold ounces produced (troy ounces)(2) | 5,614 | 1,614 | 29,955 | 5,106 |
| Gold ounces sold (troy ounces) | 5,886 | 1,985 | 36,112 | 5,651 |
| Weighted average number of shares outstanding (000's) | 171,785 | 135,470 | 172,266 | 138,932 |
(1) This is a non-IFRS measure; refer to Non-IFRS Measures section of this press release and see below for reconciliation to the Company's financial statements.
(2) Does not include ounces in stockpiled material.
| Reconciliation of Adjusted EBITDA ($000's) | Q3 2017 | Q3 2016 | First Nine Months 2017 |
First Nine Months 2016 |
| Net profit (loss) | (6,680) | (6,087) | (13,872) | (18,196) |
| Accretion and interest expense, net of interest income | 1,493 | 1,894 | 4,659 | 5,145 |
| Income tax expense and deferred tax recovery | - | - | 372 | - |
| Depreciation, depletion and amortization | 3,842 | 447 | 31,219 | 1,819 |
| EBITDA | (1,345) | (3,746) | 22,379 | (11,232) |
| Impairments(3) | 1,332 | 1,820 | 4,759 | 9,089 |
| Adjusted EBITDA | (13) | (1,926) | 27,138 | (2,144) |
(3) Categories under "Impairments" include impairment of mineral property, inventory write down and impairment write-down of gold-in-process. EDITDA is adjusted by these categories, as they are non-recurring in nature.
| Balance Sheet Summary ($000's) | Q3 2017 | Q3 2016 |
| Current Assets(4) | 42,344 | 28,844 |
| Total Assets | 102,891 | 100,486 |
| Total Liabilities | 84,924 | 78,982 |
| Equity | 17,967 | 21,504 |
(4) Q3 2017 includes $14,430,228 of gold-in-process and $1,269,438 of finished gold.
Non-IFRS Measures
The discussion of financial results in this press release includes reference to Adjusted EBITDA, which is a non- International Financial Reporting Standards ("IFRS") measure. Ajdusted EBITDA does not have any standard meaning under IFRS, and therefore may not be comparable to Adjusted EBITDA presented by other issuers. The Company provides this measure as additional information regarding the Company's financial results and performance.
Qualified Person
Dr. Matthew D. Gray. C.P.G., of Resource Geosciences Incorporated, which oversees, directly or indirectly, the Company's exploration programs in Mexico and Arizona, a Qualified Person under the definitions of CSA NI 43-101, has supervised the preparation of the information that forms the basis for the scientific and technical disclosure in this news release.
Notes on sampling and assaying of drill holes in this press release can be found in the previously disseminated press releases referenced herein.
About Marlin
Marlin is a growth-oriented gold and silver mining company focused on the Americas. The company owns three properties located in Mexico and the USA and a portfolio of royalties. Marlin's priority is to profitably operate its La Trinidad Mine, conduct further exploration on its other projects and enhance shareholder value through growth of its wholly owned subsidiary, Sailfish Royalty Corp. Marlin is backed by a well-funded investor with a successful track record in the resources sector. The La Trinidad Mine in Sinaloa, Mexico declared commercial production on November 1, 2014 and is one of the highest-grade open pit heap leach gold mines in Mexico.
