TSX:ORV
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This news release does not constitute an offer of securities for sale in
This news release contains only a summary of the Company's financial and operations results for the second quarter of fiscal 2024, and readers should refer to the full set of unaudited consolidated financial statements for the six months ended
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Highlights
Orovalle -
- Production of 10,101 gold equivalent ounces[1] (7,775 gold ounces, 1.1 million copper pounds and 26,728 silver ounces) was 6% higher when compared to 9,550 gold equivalent ounces[1] ("GEO") in the previous quarter. The increase was mainly due to higher copper grade.
- Q2 FY2024 throughput of 136,371 tonnes was in line with the first quarter of fiscal 2024, but 23% below the second quarter of fiscal 2023. Main causes of the low tonnage were:
- The 3-hour stoppages per shift strike that had commenced in
mid-November 2023 and were halted inJanuary 2024 , upon agreement to the basic terms of the 2023-2025 Collective Bargain Agreement ("CBA"). - High levels of absenteeism, negatively impacting operational performance. The absenteeism increase is in line with the national trends in
Spain . The Company is reinforcing recruitment and on boarding programs, to minimize the time required to cover temporary vacancies. - Low level of availability of machinery, mainly due to turnover of experienced technical personnel. The Company is working on different initiatives to reinforce the maintenance team, with direct employees and additional technical services.
- The 3-hour stoppages per shift strike that had commenced in
- Gold grade was below the plan for the quarter, and copper grade was above the plan for the quarter, as a result of a different ore blend, with lower percentage of oxides and higher percentage of skarn than initially planned. The Company rescheduled the mining sequence of the second quarter with higher percentage of skarn, in order to allocate equipment resources to backfill activities to increase oxides areas available for the second half of the fiscal year.
- During the second quarter Orovalle rescheduled the production plan until
September 2024 , and continues focused on improving mining operational ratios, targeting to increase the monthly throughput to 58,000 tonnes in average over the second half of fiscal 2024. At the same time, the Company continues working on the operational efficiencies planned for the year. - Fiscal 2024 production guidance:
- On track to meet higher end of copper guidance of 3,300 – 3,700 k lbs.
- Targeting to reach lower end of gold guidance of 41,000 - 45,000 oz.
- Orvana continues focused on restarting production at Don Mario.
The Oxides Stockpile Project (the "OSP"), consisting of a plant expansion to treat ore stockpiled in the Don Mario Operation from previous years of mining activity, is projected to operate for 35 months, starting after a 13-month construction period that the Company expects to start inJuly 2024 , subject to the completion of sufficient financing. - The proposed OSP financing structure includes:
$47 million Bonds Program, as the structure core, for CAPEX;-
$3 million Bank Debt: during the fourth quarter of fiscal 2023 EMIPA secured a financing line with Banco FIE inBolivia and$1.5 million of that line were withdrawn during that quarter; and -
$33 million working capital facility during construction and ramp-up phases. During Q2 FY2024 the Company continued exploring different potential financing sources, including without limitation, equity at the EMIPA's level and a prepayment facility.
- In the first quarter of fiscal 2023, EMIPA initiated the process for the issuance of the US
$47 million Bond Program to be issued through theBolivian Stock Market . InSeptember 2023 , EMIPA received the Autoridad de Supervisión del Sistema Financiero ("ASFI") approval of its registration as an eligible Bond Issuer in theBolivian Stock Market . InNovember 2023 , ASFI approved EMIPA's proposed Bond Program to be offered in the Bolivian stock market. InFebruary 2024 EMIPA notified the market inBolivia of its intention to commence the Bonds Offering in theBolivian Stock Exchange . EMIPA's agent,Panamerican Securities, S.A. will conduct the financing on a best efforts basis. The minimum placement amount of the Bonds Offering is 80% of the approximately US$47 million offering. As of the date hereof, EMIPA continues to seek financing for the OSP. There can be no assurance that EMIPA's efforts will result in adequate financing for the OSP. Updates on the status of EMIPA's financing efforts will be provided as material information develops from time to time. - In
September 2023 , the Autoridad de Supervision del Sistema Financiero (ASFI),Bolivia's financial regulator, approved and registered EMIPA as an eligible bond issuer on the Bolivian stock market. As a registered bond issuer on the Bolivian stock market, EMIPA is required to file its quarterly financial statements with ASFI. The purpose of registering EMIPA as an eligible bond issuer is to provide the subsidiary with the ability to raise funds from the sale of bonds inBolivia to finance OSP as described above. - As an eligible bond issuer on the Bolivian stock market, EMIPA has filed its unaudited financial statements for the quarter ended
March 31, 2024 (the "EMIPA Q2 FY2024"), which may be viewed at the following ASFI landing page (the "ASFI Page") when published by ASFI and available for viewing: https://www.asfi.gob.bo/index.php/registro-rmv/mv-entidades-inscritas-en-el-rmv.html
To search for EMIPA's financial statements, select the following at the ASFI Page:
ENTIDADES REGULADAS – EMISORES: Empresa Minera Paitití, S.A. EMIPA
Ver: Estados Financieros
Taguas -
- Orvana is analyzing a strategic option to combine oxides and sulphides in a larger undertaking strategy at Taguas. During Q2 FY2024 the Company continued working on enhancing the analytics of the sulphides zone of the deposit, and a new geological modeling is in progress. Next steps would include spectral analysis campaign to improve alteration types definition, and geo-metallurgical tests with oxide and sulphide ores. Once the oxides – sulphides combined opportunity is understood, next steps for the project will be determined.
Selected Financial Information
Quarters ended | Variance % | Six Months ended | Variance % | ||||
GEO 1 | 10,101 | 14,470 | (30 %) | 19,651 | 28,285 | (31 %) | |
Consolidated Financial Performance (in 000's) | |||||||
Revenue | 15,927 | 22,304 | (29 %) | 36,051 | 45,282 | (20 %) | |
Mining costs | 13,663 | 18,205 | (25 %) | 31,590 | 37,045 | (15 %) | |
Comprehensive (loss) income | 875 | (845) | 204 % | (5,059) | 126 | (4,115 %) | |
EBITDA 1 | 1,889 | 3,750 | (50 %) | 1,936 | 6,486 | (70 %) | |
Cash provided by operating activities | 1,282 | 1,262 | 2 % | 1,072 | 4,949 | (78 %) | |
Capital expenditures (cash basis) | 2,063 | 1,502 | 37 % | 4,535 | 4,589 | (1 %) | |
Cash (used in) provided by financing activities | 295 | (662) | 145 % | (1,336) | (3,798) | 65 % | |
Total assets | 116,042 | 130,300 | (11 %) | 116,042 | 130,300 | (11 %) | |
Current liabilities | 38,839 | 42,281 | (8 %) | 38,839 | 42,281 | (8 %) | |
Non-current liabilities | 25,703 | 33,711 | (24 %) | 25,703 | 33,711 | (24 %) | |
Orovalle | |||||||
COC 1 ($/oz) | 1,723 | 1,438 | 20 % | 1,711 | 1,370 | 25 % | |
AISC 1 ($/oz) | 2,094 | 1,691 | 24 % | 1,975 | 1,642 | 20 % | |
Consolidated | |||||||
COC 1 ($/oz) | 1,812 | 1,524 | 19 % | 1,796 | 1,452 | 24 % | |
AISC 1 ($/oz) | 2,157 | 1,893 | 14 % | 2,155 | 1,838 | 17 % |
1 Gold Equivalent Ounces (GEO), EBITDA, cash costs per ounce (COC) and all-in sustaining costs (AISC) per ounce are Non-GAAP Financial Performance Measures. For further information and detailed reconciliations, please see the "Non-GAAP Financial Performance Measures" section of the Company's Q2 FY2024 MD&A. |
ABOUT ORVANA – Orvana is a multi-mine gold-copper-silver company. Orvana's assets consist of the producing
Cautionary Statements – Forward-Looking Information
Certain statements in this presentation constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, potentials, future events or performance (often, but not always, using words or phrases such as "believes", "expects", "plans", "estimates" or "intends" or stating that certain actions, events or results "may", "could", "would", "might", "will", "are projected to" or "confident of" be taken or achieved) are not statements of historical fact, but are forward-looking statements.
The forward-looking statements herein relate to, among other things, Orvana's ability to achieve improvement in free cash flow; the ability to maintain expected mining rates and expected throughput rates at El Valle Plant; the potential to extend the mine life of
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies, which includes, without limitation, as particularly set out in the notes accompanying the Company's most recently filed financial statements. The estimates and assumptions of the Company contained or incorporated by reference in this news release, which may prove to be incorrect, include, but are not limited to the various assumptions set forth herein and in Orvana's most recently filed Management's Discussion & Analysis and Annual Information Form in respect of the Company's most recently completed fiscal year (the "Company Disclosures") or as otherwise expressly incorporated herein by reference as well as: there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; permitting, development, operations, expansion and acquisitions at El Valle,
A variety of inherent risks, uncertainties and factors, many of which are beyond the Company's control, affect the operations, performance and results of the Company and its business, and could cause actual events or results to differ materially from estimated or anticipated events or results expressed or implied by forward looking statements. Some of these risks, uncertainties and factors include: the potential impact of global health and global economic conditions on the Company's business and operations, including: our ability to continue operations; and our ability to manage challenges presented by such conditions; the general economic, political and social impacts of the continuing conflict between
Any forward-looking statements made herein with respect to the anticipated development and exploration of the Company's mineral projects are intended to provide an overview of management's expectations with respect to certain future activities of the Company and may not be appropriate for other purposes. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions and, except as required by law, the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Readers are cautioned not to put undue reliance on forward-looking statements. The forward-looking statements made in this information are intended to provide an overview of management's expectations with respect to certain future operating activities of the Company and may not be appropriate for other purposes.
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