TSX:ORV
/NOT FOR DISTRIBUTION IN
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 first quarter of fiscal 2024, and readers should refer to the full set of unaudited consolidated financial statements for the quarters ended
"We continue our efforts to secure financing for the
Highlights
Orovalle -
- In
January 2024 , Orovalle successfully concluded negotiations regarding basic terms of its 2023-2025 Collective Bargain Agreement ("CBA"), which were ratified by workers' assemblies. The period of validity of the 2019-2022 Collective Agreement of Orovalle ended inDecember 2022 , and has been extended until the new CBA is finalized. Upon agreement to the basic terms of the new CBA, the 3-hour stoppages per shift strike that had commenced in midNovember 2023 were halted, and labour attendance and operational conditions were returned back to normal. - As a consequence of this non-recurrent event, Orovalle's first quarter performance has been negatively impacted, and the tonnage mined and milled was below the plan for the quarter. Q1 FY2024 throughput of 130,267 tonnes was 31% lower than the previous quarter.
- Production of 9,550 gold equivalent ounces[1] (7,994 gold ounces, 0.7 million copper pounds and 20,393 silver ounces) was 39% lower when compared to 15,567 gold equivalent ounces1 ("GEO") in the previous quarter. The main cause of the lower metal production was the lower throughput.
- Orovalle is currently re-assessing production estimates for the fiscal year, targeting to reach the lower end of the 2024 production guidance. At the same time, the Company continues working on the operational efficiencies planned for the year. Capital expenditures and unitary costs guidance will be re-assessed at the end of the second quarter, once the rescheduling of the fiscal 2024 production is completed and the implementation of operational efficiencies advances.
- The Annual Information Form of the Company for the fiscal year ended
September 30, 2023 (the "FY2023 AIF") was filed onDecember 20, 2023 , including Mineral Resource and Reserves estimates for Orovalle with an effective date ofSeptember 30, 2023 . The FY2023 AIF includes the latest production schedule produced by Orovalle based upon the estimated Mineral Reserves. The schedule includes oxides and skarns ore mined from both the Boinás and Carlés underground mines at an average rate of 595,000 tpa for a period of 4 years. The FY2023 AIF can be found on the Company's website at www.orvana.com and by reviewing its profile on SEDAR+ at www.sedarplus.ca.
- Orvana is 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 in the first half of calendar 2024, subject to the completion of sufficient financing. - In
November 2023 , the Autoridad de Supervisión del Sistema Financiero (ASFI), theBolivian Financial Supervisory Authority , approved EMIPA's proposed$47 million Bond Program to be offered in the Bolivian stock market (the "Bond Program"). Previously, inSeptember 2023 , EMIPA received ASFI approval of its registration as an eligible Bond Issuer in the Bolivian stock market. - The proposed OSP financing structure includes:
$47 million Bond Program, as the structure core, for CAPEX;$33 million working capital during construction and ramp-up phases. During Q1 FY2024 the Company continued exploring different potential financing sources, including without limitation, equity at the EMIPA's level and a prepayment facility, and$3 million Bank Debt inBolivia , secured in fiscal 2023.
- EMIPA expects to commence the bonds offering in
Bolivia in the next few weeks, the closing of which would be conditional upon securing the remaining of the OSP financing structure as summarized above.
Taguas -
- Orvana is analyzing a strategic option to combine oxides and sulphides in a larger undertaking strategy at Taguas. During Q1 FY2024 the Company continued working on enhancing the analytics of the sulphides zone of the deposit, and a new geological modeling is in progress. Next steps would include spectral analysis campaign to improve alteration types definition, and geo-metallurgical tests with oxide and sulphide ores. Once the oxides – sulphides combined opportunity is understood, next steps for the project will be determined.
Selected Financial Information
Quarters Ended | Variance % | Quarter ended | |||
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| |||
GEO 1 | 9,550 | 15,567 | (39 %) | 13,815 | |
Consolidated Financial Performance (in 000's) | |||||
Revenue | 20,124 | 29,842 | (33 %) | 22,978 | |
Mining costs | 17,927 | 19,542 | (8 %) | 18,840 | |
Comprehensive (loss) income | (5,934) | 2,406 | (347 %) | 971 | |
EBITDA 1 | 47 | 10,002 | (100 %) | 2,736 | |
Cash provided by operating activities | 1,208 | 4,107 | (71 %) | 2,648 | |
Capital expenditures (cash basis) | 2,472 | 2,106 | 17 % | 3,087 | |
Cash (used in) financing activities | (1,631) | (2,743) | (41 %) | (3,136) | |
Total assets | 113,635 | 123,249 | (8 %) | 129,260 | |
Current liabilities | 36,364 | 38,430 | (5 %) | 39,946 | |
Non-current liabilities | 26,646 | 28,260 | (6 %) | 34,161 | |
Orovalle | COC 1 ($/oz) | 1,702 | 1,099 | 55 % | 1,309 |
AISC 1 ($/oz) | 1,893 | 1,380 | 37 % | 1,598 | |
Consolidated | COC 1 ($/oz) | 1,785 | 1,152 | 55 % | 1,388 |
AISC 1 ($/oz) | 2,153 | 1,407 | 53 % | 1,790 |
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 Q1 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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