TORONTO, Nov. 1, 2018 /CNW/ -

Excellon Resources Inc. (TSX:EXN, EXN.WT.A and OTC:EXLLF) ("Excellon" or the "Company") reports financial results for the three and nine month periods ended September 30, 2018.

Q3 2018 Financial Highlights (compared to Q3 2017)

• Revenue of $2.6 million (Q3 2017 – $7.1 million)
• Sales of 258,920 silver equivalent ("AgEq") ounces payable (Q3 2017 – 443,921 AgEq ounces payable)
• Gross loss from operations of $3.5 million (Q3 2017 – profit of $1.5 million)
• Total cash cost per Ag oz payable of $29.94 (Q3 2017 – $2.46)
• All-in sustaining cost ("AISC") per Ag oz payable of $44.02 (Q3 2017 – $11.62)
• Net loss of $3.6 million or $0.04/share (Q3 2017 – net loss of $5.9 million or $0.08/share)
• Net working capital totaled $11.7 million at September 30^th (December 31, 2017 – $13.8 million) with $11.3 million in cash and current accounts receivable (December 31, 2017 – $14.6 million)

"It was a tough quarter that is not representative of the many operational improvements made at Platosa in recent quarters," stated Brendan Cahill, President and CEO. "In addition to lower production, financial results were impacted by lower by-product prices and associated provisional price adjustments, which have affected the whole market."

"Our assessment of the causes of lower production resulted in management changes at Platosa. Over the six weeks since making those changes, we have increased production and development rates and realized a number of other improvements in the operation. We continue to have a strong balance sheet to weather recent commodity markets while exploring both of our projects, including the newly expanded Evolución property."

Financial Results

Financial results for the three and nine month periods ended September 30, 2018 and 2017 were as follows:

Revenues decreased significantly during Q3 2018 to $2.6 million (Q3 2017 – $7.1 million), primarily due to a 42% decrease in AgEq ounces payable of 258,920 (Q3 2017 – 443,921 AgEq oz) and a $1 million negative adjustment on revenue upon settlement of concentrate sales delivered in Q2 at higher metal prices (Q3 2017 – negative adjustment of $24,000). The negative adjustment derived from the material decrease in metal prices from Q2 to Q3 2018. Cash and current accounts receivable decreased by $5.8 million during the quarter to $11.3 million, reflecting $4.1 million of cash flow used in operations (after exploration and general and administrative expenses), $1.2 million in changes in working capital, $1.1 million in capital expenditures and positive forex adjustments of $0.5 million on non-USD denominated accounts. Financial performance has improved during recent weeks with metal prices stabilizing and is expected to continue improving as production accesses multiple ore faces and development progresses towards the next production horizon.

Production cost per tonne increased by 40% to $292/t in Q3 2018, primarily due to lower tonnage mined and higher electricity costs associated with increased pumping and rising electricity prices during the quarter. Production cost per tonne is expected to improve as production rates increase.

Cash general and administrative expense of $678,000 was in line with the comparable quarter (Q3 2017 – $671,000).

The Company incurred $1.0 million in exploration spending in Q3 2018, with a total of 6,073 metres drilled during the quarter from surface and underground at Platosa and from surface at Miguel Auza.

Total cash costs per silver ounce payable of $29.94 in Q3 2018 (Q3 2017 – $2.46) and AISC of $44.02 (Q3 2017 – $11.62) resulted from lower metal production, higher production costs, lower byproduct revenue and the $1 million negative revenue adjustment to byproduct credits from prior period sales.

Excellon defines AISC per silver ounce payable as the sum of total cash costs (including treatment charges and net of by-product credits), capital expenditures that are sustaining in nature, corporate general and administrative costs (including non-cash share-based compensation), capitalized and expensed exploration that is sustaining in nature, and (non-cash) environmental reclamation costs, all divided by the total payable silver ounces sold during the period to arrive at a per ounce figure.

All financial information is prepared in accordance with IFRS, and all dollar amounts are expressed in U.S. dollars unless otherwise specified. The information in this press release should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2018 and associated management discussion and analysis ("MD&A") which are available from the Company's website at www.excellonresources.com and under the Company's profile on SEDAR at www.sedar.com.

The discussion of financial results in this press release includes references to "cash flow from operations before changes in working capital items", "production cost per tonne", "cash cost per silver ounce payable", and "AISC per silver ounce payable", which are non-IFRS performance measures. The Company presents these measures to provide additional information regarding the Company's financial results and performance. Please refer to the Company's MD&A for the three and nine month periods ended September 30, 2018, for a reconciliation of these measures to reported IFRS results.

Production Highlights

Operational performance for the periods indicated below was as follows:

Production during Q3 2018 was impacted by surveying and planning issues, which have since been addressed, that resulted in lower tonnage production of peripheral and lower-grade ore instead of the high-grade block model ore. With development now accessing the core of the orebody, production is sourced from four to six high-grade ore faces. During Q3, development rates increased by 36% relative to Q2 2018 with increased mechanization, and headings will shortly be accessing additional key areas for future production. Development is progressing toward the 928 level, where the Company expects to achieve a steady production rate going forward. Ground support, which also continues to be an important area of focus, has improved with the use of two mechanized bolters from late Q2 2018.

During the quarter, the Company continued to process low-grade historical stockpiles and sump material, with minimal associated mining cost. This mineralized material is blended with mined ore to improve payability and recoveries (particularly for lead and zinc), as well as being cash flow positive.

About Excellon

Excellon's 100%-owned Platosa Mine in Durango has been Mexico's highest-grade silver mine since production commenced in 2005. The Company is focused on optimizing the Platosa Mine's cost and production profile, discovering further high-grade silver and carbonate replacement deposit (CRD) mineralization on the 21,000 hectare Platosa Project and epithermal silver mineralization on the 100%-owned 45,000 hectare Evolución Property and capitalizing on the opportunity in current market conditions to acquire undervalued projects in the Americas.

Additional details on Excellon's projects are available at www.excellonresources.com.

Forward-Looking Statements

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. 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. 

SOURCE Excellon Resources Inc.

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/November2018/01/c2744.html