Excellon Resources Inc. (“Excellon” or “the Company”) Mexico’s highest grade silver producer, is pleased to provide this summary of its financial and operating results for 2011. A copy of the Company’s consolidated financial statements for the year ended December 31, 2011, along with Management’s Discussion and Analysis in respect thereof has been filed on SEDAR and is also available on the Company’s website at www.excellonresources.com . All figures unless otherwise noted are in US$.
2011 Highlights:
The Company recorded a profit of $4.4 million for the year ended December 31, 2011 (December 31, 2010 a loss of $2.4 million), including exploration programs of $6.1 million for 2011 ($8.8 million for 2010);
The Company recorded earnings of $0.02 per share in 2011 vs. a loss of $0.02 in 2010;
Gross profit for the year ended December 31, 2011 was $30.8 million compared to $10.5 million for the year ended December 31, 2010;
Sales of metal were 1.3 million ounces of silver, 6.5 million pounds of lead and 8.7 million pounds of zinc in 2011;
Cash operating costs for the year ended December 31, 2011 were $5.29 per ounce of silver net of by-product credits ($7.46 for year ended December 31, 2010);
All exploration costs continue to be funded from operating cash flow;
New equipment ordered in Q4, 2011 to enhance mining and development and facilitate planned production expansion at La Platosa;
Improved water management with the installation of watertight doors;
Available additional capacity at Miguel Auza for custom milling or increased La Platosa production.
Financial Highlights: Highlights for the year ended December 31, 2011, and the year ended December 31, 2010 are as follows:
Years Ended
Dec 31, 2011 Dec 31, 2010
$ 000’s $ 000’s
Revenue 48,010 29,384
Cost of sales 17,195 18,906
Gross profit 30,815 10,478
Expenses:
Corporate administration 8,405 5,842
Exploration 6,067 8,800
Other 5,096 1,195
Income tax (recovery) 6,814 (1,494)
Net income (loss) for the year 4,433 (3,865)
Cash flow increase (decrease) 20,284 (2,506)
During the year ended, December 31, 2011, the Company recorded net income of $4.4 million compared to a loss of $3.9 million for the year ended December 31, 2010 or net income of $0.02 per share vs. a loss of $0.02 per share for December 31, 2010.
Gross profit for 2011 was $30.8 million compared to $10.5 million for the year ended December 31, 2010. This was significantly higher in 2011 due to higher commodity prices. In the last quarter of 2011, throughput was increased to 6,000 tonnes per month from 5,000 tonnes per month. Silver produced in 2011 was 1.3 million ounces virtually unchanged from 2010.
Silver sales accounted for approximately 80% of total sales in 2011.
Mining Operations: The following are La Platosa mine production statistics for the period indicated:
Years Ended
Dec 31, 2011 Dec 31,2010
Tonnes of Ore Processed 59,405 64,462
Ore Grades:
Silver (g/t) 796 814
Lead (%) 6.24 6.37
Zinc (%) 9.17 7.68
Recoveries:
Silver (%) 88.9 85.4
Lead (%) 75.6 68.2
Zinc (%) 78.5 74.5
Production:
Silver (oz) 1,312,146 1,317,605
Lead (lb) 6,529,018 5,804,014
Zinc (lb) 8,674,527 8,074,321
Sales:
Silver (oz) 1,312,146 1,302,321
Lead (lb) 6,529,018 5,726,157
Zinc (lb) 8,674,527 8,009,077
Realized Prices:
Silver ($US/oz) 34.16 19.78
Lead ($US/lb) 0.98 0.95
Zinc ($US/lb) 1.02 0.94
Production issues 2011: In mid-2011, La Platosa lost seven days of production that came from picketing by two non-representative unions seeking to replace the existing union at the mine. However, the mine exceeded its 2011 budget targets.
Water management continues to be a top priority for La Platosa. In late-2010 and mid-2011, three watertight doors, critical for water control became fully operational.
In 2011, two 1,000 hp turbine pumps were delivered and are currently being installed; also a third jumbo drill, an underground diamond drill, and a scissor lift were purchased with delivery expected in mid-2012. This new equipment along with the watertight doors will allow Excellon to increase development and production at the mine and will allow effective management and control of water issues.
Outlook: Today, La Platosa continues to outperform its forecast. In 2011, La Platosa processed 59,405 tonnes of ore compared to a forecast of 57,000 tonnes (4% above plan), at an average head grade of 796 g/t Ag compared to a forecast grade of 793 g/t Ag. For January and February 2012, as previously reported, silver averaged 1,034 g/t Ag, which will assist the Company in meeting its forecast targets for 2012.
Growth will be an important and vital part of the Company’s strategy in the future. It is Management’s belief that the Mexican silver mining sector and the competitive gold sector in the Timmins/Abitibi area, have not experienced the consolidation that some of the other precious metals sectors have experienced in the recent past. With 40% extra mill capacity available for custom milling at Miguel Auza, an increasing cash position from production ($22.3 million at December 31, 2011), along with continuing favourable grades at the mine and expected resilient commodity prices, Excellon is in a good position to evaluate consolidation of potential mining opportunities. The Company also believes that its aggressive exploration programs in Mexico and Canada will lead to organic growth going forward.
Expenditures on exploration in 2011 totalled $6.1 million ($8.8 million in 2010). The majority of expenditures in both years have been for diamond drilling in Mexico, focused on increasing mineral resources at La Platosa.
The Company frequently reviews opportunities that may continue to enhance value for shareholders by providing further diversity, upside exploration opportunities and exposure to increased commodity prices.
About Excellon Excellon, a mineral resource company operating in Durango and Zacatecas States, Mexico, and Ontario and Quebec, Canada, is committed to building value through production, expansion and discovery. Excellonis Mexico’s highest-grade silver producer; it produces silver, lead and zinc from the high-grade manto Mineral Resource on its large, 100% owned Platosa Property, strategically located in the middle of the Mexican CRD/silver belt. Excellon’s focus is on expanding its operating capacity and increasing its Mineral Resources at Platosa where an exploration program focused on diamond drilling and advanced geophysical techniques is ongoing. The Platosa Property, not fully explored, has several geological indicators of a large mineralized system. The Miguel Auza Mill Operation in Zacatecas also has 41,000 hectares of under explored land. Excellon also has ongoing gold exploration programs on the DeSantis Project, located near Timmins, Ontario and the Beschefer Project, located in northwestern Quebec. Both these projects host gold mineralization and significant potential for the discovery of more. Excellon will continue to use cash from operations to fund its ongoing exploration activities.
On behalf of
EXCELLON RESOURCES INC. “Jeremy Wyeth” President and Chief Executive Officer
Disclaimer The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this Press Release, which has been prepared by management. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 27E of the Exchange Act. Such statements include, without limitation, statements regarding the future results of operations, performance and achievements of the Company, including potential property acquisitions, the timing, content, cost and results of proposed work programs, the discovery and delineation of mineral deposits/resources/reserves, geological interpretations, proposed production rates, potential mineral recovery processes and rates, business and financing plans, business trends and future operating revenues. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking statements as a result of various factors, including, but not limited to, variations in the nature, quality and quantity of any mineral deposits that may be located, significant downward variations in the market price of any minerals produced [particularly silver], the Company’s inability to obtain any necessary permits, consents or authorizations required for its activities, to produce minerals from its properties successfully or profitably, to continue its projected growth, to raise the necessary capital or to be fully able to implement its business strategies. All of the Company’s public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company’s mineral properties, and particularly the November 22, 2011 NI 43-101-compliant technical report prepared by Roscoe Postle Associates Inc. with respect to the Platosa Property. This press release is not, and is not to be construed in any way as, an offer to buy or sell securities in the United States.
