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Orvana reports 3Q19 financial results

Published by
Global Mining Review,


On 8 August, Orvana Minerals Corp. (Orvana) announced its financial and operational results for the third quarter of fiscal 2019 (3Q19). The company is also providing financial and operational updates for its El Valle and Carlés Mines (collectively, El Valle) operations in northern Spain, and for its Don Mario mine operations in Bolivia.

The unaudited condensed interim consolidated financial statements for 3Q19 and Management's Discussion and Analysis related thereto are available on SEDAR and on the company's website at www.orvana.com.

The company reports its 3Q19 operational and financial results:

  • Consolidated gold production of 20 696 oz compared to 27 306 oz in 2Q19 and 26 761 oz compared to the same quarter in 2018.
  • FY19 to date gold production of 75 274 oz and 3.9 million lb of copper.

Consolidated cash costs

  • COC of US$1213 - 25% higher compared to US$971 in 2Q19 and 18% higher compared to US$1027 for the same quarter in 2018.
  • AISC of US$1432 - 29% higher compared to US$1107 in 2Q19 and 11% higher compared to US$1291 for the same quarter in 2018.
  • COC and AISC increased due to a production decrease in the third quarter, according to operational plans for the quarter. On track to meet fiscal 2019 cost guidance.
  • EBITDA of US$0.5 million and US$13.3 million for the fiscal 2019 to date compared to US$3.9 million in the same quarter in fiscal 2018 and US$12.6 million for the first three quarters of fiscal 2018.
  • Net loss of US$3.9 million and US$1.6 million for the fiscal 2019 to date compared to a loss of US$3 million in the same quarter in 2018 and US$9.9 million for the first three quarters of fiscal 2018. 
  • El Valle delivers 22% lower gold production of 13,854 ounces in the third quarter of fiscal 2019 compared to 17 742 oz the second quarter, due to 7% grade decrease and 17% lower mill throughput.
  • Gold production decrease was according to operational planning, with Carlés not providing skarn in the third quarter.
  • Don Mario produces 6842 oz of gold in the third quarter of fiscal 2019 compared to 9564 gold oz the second quarter. A 28% decrease, which was consistent with planned lower ore grade while working on the last benches of Cerro Felix open pit.

Based on the positive results yielded by the exploration activities, production from Las Tojas is expected to start in the fourth quarter of fiscal 2019, and continue along fiscal 2020. Preliminary Las Tojas production plan has been developed using a cut-off grade of 1.3 g/t of gold, resulting in six small pits optimising available resources. Based on the additional information provided by the exploration in progress, the production plan will be reviewed and optimised.

The development and engineering of a Sulfidisation-Acidification-Recycling-Thickening (SART) circuit, and ancillary facilities, continues to advance. This undertaking is designed to add an additional three years of mine life to the Don Mario operations, commencing in FY21, subject to completion of technical, economic and funding reviews.

On track to maintain fiscal 2019 consolidated guidance: Based on operating results generated from the first nine months of fiscal 2019, the company is confident that it will achieve its stated fiscal 2019 consolidated production of 100 000 – 110 000 oz of gold and deliver on COC guidance of US$950 - US$1050 and AISC of US$1150.

Juan Gavidia, CEO of Orvana Minerals stated: "We are very pleased with our results to date. The reduced production in 3Q19 was expected under our operational planning, and was due to anticipated lower grades at El Valle, Carlés not providing skarn in the quarter, and completion of the last benches of the Cerro Felix open pit. The operational plan for FY19 also includes the implementation of plans to lay the foundation for the extension of life of mines at both El Valle and Don Mario. As we proceed towards year-end of FY19, our primary objective at El Valle and Don Mario will be to deliver on our consolidated production guidance while developing our FY20 operational plans, which will continue to be based on safe and stable production; reduced unitary costs; and intensive regional exploration programmes to extend the life of our operations."

Exploration update

El Valle

A total of 6981 m of diamond drilling were completed in the Valle Mine in the third quarter of fiscal 2019. The drilling programme, which commenced in September 2018, was focused on infill definition in the oxides areas.

Two drill holes totalling 1202 m of Greenfield Exploration were completed in the "Quintana Investigation Permit" in the third quarter of fiscal 2019. Gold presence has been encountered within the main regional structure 2 km away from Boinás mine. The next steps in this area will require a detailed study of the new information available, in order to find new targets.

Guadalupe Collar (European Geologist), who supervised the explorations programs, is responsible for all aspects of the work, including the quality control/quality assurance programme. Ms. Collar, Chief of Geology at OROVALLE, is a qualified person as defined in NI 43-101 and has approved all of the geological scientific and technical information relating to El Valle disclosed in this news release.

Don Mario

A drill programme consisting of 5226 m has been completed for Las Tojas Deposit. Updated measured and indicated resources for this deposit have been estimated at 1 386 000 tonnes with an average gold grade of 1.52 g/t as at 30 June 2019. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

Luis Isla (Geologist certified by the "Comisión Calificadora de Competencias en Recursos y Reservas Mineras", Chile), who supervised the estimate of Las Tojas' mineral resources as at June 30, 2019, is responsible for all aspects of the work, including the quality control/quality assurance programme. Isla, the Chief of Geology at EMIPA, is a qualified person as defined in NI 43-101 and has approved all of the geological scientific and technical information relating to Las Tojas disclosed in this news release.

Detailed additional information of the Quintana Investigation Permit and Las Tojas Deposit has been included in the MD&A for the third quarter of fiscal 2019.

Taguas gold property acquisition

On 14 May 2019, the company entered into a purchase agreement with Compañía Minera Taguas S.A. pursuant to which Orvana agreed to acquire the Taguas property (Taguas) located in the Province of San Juan, Argentina. Taguas consists of 15 mining concessions over an area of 3273.87 ha. It is located in the Province of San Juan, Argentina, on the eastern flank of the Andes, between 3500 - 4300 m above sea level. On 9 July, the company filed a Preliminary Economic Assessment Report for the Taguas property. Closing of the transaction is subject to the final acceptance of the Toronto Stock Exchange and a number of closing conditions including, without limitation, completion of satisfactory due diligence by Orvana and applicable local mining rights registration.

Read the article online at: https://www.globalminingreview.com/mining/09082019/orvana-reports-3q19-financial-results/

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