VANCOUVER, BC, May 31, 2021 /CNW/ - Elemental Royalties
Corp. ("Elemental" or "the Company") (TSXV: ELE)
(OTCQX: ELEMF) is pleased to announce its operating and financial
results for the quarter ended March 31,
2021. For complete details please refer to the Financial
Statements and associated Management Discussion and Analysis for
the quarter ended March 31, 2021,
available on SEDAR (www.sedar.com) or the Company's website
(www.elementalroyalties.com).
Frederick Bell, CEO of
Elemental commented, "We are pleased to build on a
record-breaking 2020 with another quarter of consistent revenue
generation. With the closing of the South32 acquisition in Q1, we
have the strongest organic growth profile in the Company's history
with the near-term catalyst of first gold pour at the Karlawinda
gold mine. This royalty alone will almost double the Company's
revenue with additional royalty revenue from the operating Mercedes
mine contributing from mid-2022.
Both the Wahgnion gold mine and the Mercedes mine have new
operators from Q1 with Endeavour Mining, a top 10 gold producer
globally, and Equinox Gold improving the quality of Elemental's
counter-parties. With significant exploration investment across our
producing royalties already underway, it highlights the quality of
our portfolio, which remains a key differentiator."
Corporate Highlights
- Completed the acquisition of a portfolio of gold royalties in
Western Australia from South32
Limited
- Cornerstone royalty at Karlawinda on track for first gold pour
in Q2
- Expanded the portfolio from 6 to 9 royalties and simultaneously
increased average mine life, weighting to Tier 1 jurisdictions,
counterparty quality and gold exposure
- Expanded Board with appointment of South32 Chief Development
Officer Simon Collins
Financial Highlights
- Revenue of US$1.1 million
generated from existing royalties with production at Karlawinda to
commence in Q2 and Amancaya revenue to rise following change to
contractor mining
- 2021 guidance of US$7-7.9 million
remains unchanged, weighted towards H2 2021
- 641 attributable gold equivalent ounces1 sold at
zero cash cost to the Company
- Adjusted EBITDA1 of US$0.6
million
- Net loss of US$1.1 million,
driven by financing costs related to the South32 portfolio
acquisition
- Cash and cash equivalents of US$6.6
million as of March 31, 2021
prior to Q1 royalty revenue
Outlook
Elemental continues to expect 4,000 to 4,400 attributable
zero-cost gold equivalent ounces1 in 2021 from its
existing portfolio, weighted towards the second half of the year,
with over 90% of expected revenue derived from gold and silver.
Asset Updates
Karlawinda (2% NSR)
- Capricorn Metals ("Capricorn") (ASX: CMM) announced that
concreting and civil earthworks have been completed at the
processing plant, the ball mill has been delivered to site, the
majority of processing equipment and steelwork has been delivered,
construction of the Tailings Storage Facility is underway, and
mining has commenced in the Bibra open pit.
- Development costs are in line with budget, with the available
funding balance including a 29% contingency allowance. First gold
production continues to be expected in Q2 2021.
- Capricorn has also commenced a near pit exploration program,
targeting the conversion of Inferred Resources to Indicated
immediately to the west of the current A$1,600 Bibra pit, to support potential pit
expansions and production increases.
Wahgnion (1% NSR)
- Produced 43,000 ounces in Q1 2021
- Production was higher compared with Q4 2020 due to higher
processed grades as recoveries and throughput remained
consistent
- Endeavour Mining (TSX: EDV) completed the acquisition of
Teranga Gold on February 10,
2021
- On track to meet guidance, with the mine expected to produce
between 140-155 thousand ounces for the period February 10, 2021 to December 31, 2021
- The 2021 exploration program, with a planned expenditure of
approximately US$12.0 million, will
focus on Nogbele North and Nogbele South deposits, targeting the
continuation of mineralized structures between the Nogbele pits.
Additionally, Endeavour is
targeting continuation of the Fourkoura deposit and the Hillside
target. On the exploration permits efforts will be focused on
various attractive targets such as Kafina West and
Korindougou.
Amancaya (2.25% NSR)
- Produced 4,600 ounces in Q1 2021 and 9.3koz of gold sales.
Austral gold has a further approximately 1,500 ounces of refined
gold in inventory
- Expected lower production due to the decision to outsource
operations to contractor mining from the end of Q4 2020.
- By mid-April 2021 the contractor
had achieved the planned production rates
- Further exploration results on drill out extensions to the Main
Vein at Amancaya are starting to define two new veins parallel to,
and on either side of the Main Vein
- New drilling on the earlier discovered 'East Vein' has returned
the following intersections:
-
- 1.82m @ 3.11g/t from 377.5m (DAM016)
- 4.27m @ 7.81g/t from 249.8m (DAM019)
- The 'West Vein' has been discovered through drilling on the
other side of the mine workings with the following results:
-
- 2.41m @ 10.2g/t from 20.3m (DAM024)
- 1.17m @ 25.0g/t from 52.6m (DAM026)
Mercedes (1% NSR)
- On December 16, 2020 Equinox Gold
(TSX/NYSE-A: EQX) and Premier Gold Mines announced that the
companies had entered into a definitive agreement whereby Equinox
Gold would acquire all of the outstanding shares of Premier. The
acquisition was completed on April 7,
2021 and the combined entity has a market capitalisation of
approximately US$2.7 billion.
- The focus at Mercedes is currently on the promising,
fast-evolving Diluvio/Lupita/San Martin system while also
implementing continued exploration, underground development, and
mill maintenance programs with the intention of returning to full
annual production of approximately 80,000 to 90,000 ounces. Equinox
have guided gold production at Mercedes of 30,000 to 35,000 ounces
from April 7, 2021 to December 31, 2021.
Kwale (0.25% Gross Royalty)
- Base produced 84,000 tonnes of ilmenite, 19,500 tonnes of
rutile and 7,400 tonnes of zircon, and sold 97,000 tonnes of
ilmenite, 26,000 tonnes of rutile, and 6,600 tonnes of zircon in
Q1
- Grades were higher than expected due to mine path and better
reconciliation to the resource model in certain areas
- Global pigment producers have indicated that the strong
recovery in demand over the past two quarters has continued through
the March quarter, more than offsetting the usual seasonal weakness
experienced by the pigment industry at this time of year. The
demand recovery for zircon gathered pace through the quarter as
ceramic plants in Europe operated
at full capacity and Chinese consumption of zircon accelerated on
the back of strong economic conditions
Laverton (2% Gross Revenue Royalty)
- Focus Minerals released an Initial Pre-Feasibility Study
("PFS") across only 21% of Focus' Mineral Resource base with
substantial potential for resource growth at Elemental's
Beasley Creek deposit, which remains
open along strike and where additional infill drilling may lead to
an upgrade of shallow existing Inferred Resources
- Focus recently announced JORC 20121 compliant maiden Ore
Reserves of 546koz of gold, of which 238koz of gold is from the
higher-grade Beasley Creek, Beasley
Creek South and Wedge Deposits covered by Elemental's royalty
- New strong intersections at Beasley Creek South to be included
in second-phase PFS already underway
- A number of other deposits with JORC 2004 resources with grades
of 2g/t or greater, many of which are within Elemental's royalty
area, are to be updated to JORC 2012 compliance before inclusion in
the second-phase PFS
Mount Pleasant (5% NPI or
A$10/oz Royalty)
- Elemental notes an announcement by a mining contractor that
initial underground development is underway on the Tuart orebody,
covered by Elemental's royalty at Zijin's Mount Pleasant
Operations
- Tuart has a historical JORC 2012 compliant Indicated Resource
of 212koz of gold at 1.8g/t and Inferred Resource of 232koz of gold
at 3.8g/t2 on both conceptual underground and open pit
mineralisation
Panton (0.5% NSR)
- Red Emperor Resources NL ("Red Emperor") (ASX/AIM: RMP)
announced that it intends to acquire Great Northern Palladium Pty
Ltd ("GNP") the private company which owns 80% of the Panton
project, and holds an option over the remaining 20%.
- Concurrent with the acquisition, Red
Emperor intends to complete a A$10
million equity fundraising with former Stillwater Mining
Company Managing Director Mick
McMullen to be appointed as a strategic adviser and
Justin Tremain as a director
alongside a geologist who worked on the original Mineral Resource
Estimate delineation drilling.
- Panton has a Measured and Indicated JORC Resource of 12.2Mt @
2.46g/t Pd, 2.25g/t Pt, 0.3g/t Au, 0.26% Ni, 0.07% Cu for 963koz Pd
and 878koz Pt; and an Inferred JORC Resource of 2.2Mt @ 2.0g/t Pd,
1.9g/t Pt, 0.3g/t Au. 0.31% Ni, 0.11% Cu, for 139koz Pd and 129koz
Pt2.
Western Queen (A$6 to
A$20/oz Royalty)
- During Q1 2021, Rumble Resources announced that the final Phase
3 resource drilling results at the Western Queen deposit had been
completed
- Rumble intercepted multiple high-grade gold shoots intercepted
100m below the current Western Queen
South Open Pit. Drill hole WQRC188 returned:
-
- 5m @ 38.76g/t from 193m
- 17 @ 5.7g/t from 221m
- Rumble expect to finalise database completion and associated
resource estimated work for the multiple resource zones in Q2
2021
On behalf of Elemental Royalties Corp.
Frederick Bell
CEO and
Director
Corporate Inquiries:
Dustin Zinger, Investor Relations
Manager
Corporate Website: www.elementalroyalties.com
Direct: +1 (604) 653-9464
Email: dustin@elementalroyalties.com
Elemental is a proud member of Discovery Group. For more
information please visit: www.discoverygroup.ca or contact
604-653-9464
TSX.V: ELE | OTCQX: ELEMF | ISIN: CA28619L1076
About Elemental Royalties
Elemental is a gold-focused royalty company listed on the TSX-V
in Canada and provides investors
with lower risk precious metals exposure through a portfolio of
nine high-quality royalties. This enables investors to
benefit from ongoing royalty revenue, future exploration upside and
low operating costs. Elemental's experienced team seeks to secure
royalties in advanced precious metals projects, run by established
operators, from its pipeline of identified opportunities.
Qualified Person
Richard Evans, FAusIMM, is Senior
Vice President Technical for Elemental, and a qualified person
under National Instrument 43-101 – Standards of Disclosure for
Mineral Projects, has reviewed and approved the scientific and
technical disclosure contained in this press release.
Neither the TSX-V nor its Regulation Service Provider (as
that term is defined in the policies of the TSX-V.) accepts
responsibility for the adequacy or accuracy of this press
release.
1 Elemental has included certain
performance measures in this press release that do not have any
standardized meaning prescribed by International Financial
Reporting Standards (IFRS). The Company's royalty revenue is
converted to an attributable gold equivalent ounce basis by
dividing the royalty revenue received in a period by the average
gold price for the same respective period. The presentation of this
non-IFRS measure is intended to provide additional information and
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. Other
companies may calculate these non-IFRS measures differently. The
production forecast was derived using information that is available
in the public domain as at the date hereof, which included guidance
and estimates prepared and issued by management of the operators of
the mining operations in which Elemental holds an interest. The
production forecast is sensitive to the performance and operating
status of the underlying mines. None of the information has been
independently verified by Elemental and maybe subject to
uncertainty. There can be no assurance that such information is
complete or accurate.
2 The Tuart deposit in Elemental's
Mt Pleasant royalty area has been
assigned a historical resource estimate on both conceptual
underground and open pit mineralisation on the basis of Norton Gold
Fields Limited's announcement dated February
3, 2015, titled "January 2015
Mineral Resource & Ore Reserve update". The estimate was
prepared by Norton Goldfields Ltd (ASX: NGF) in accordance with the
JORC Code 2012 for the situation at Dec 31,
2014, and is available on the ASX website at:
https://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01596085.
Elemental believes that the resources disclosed are fundamentally
reliable but they should not be relied on as a current resource
estimate, and no qualified person of Elemental has done sufficient
work to classify the above estimate as current Mineral Resources.
Elemental is not treating the historical estimate as current
Mineral Resources or Mineral Reserves and it is unknown how much of
the historical resource will be economic under the proposed mine
plan. Elemental understands that there has been no production from
the area since the historical resource estimate was
published
Cautionary note regarding forward-looking
statements
This release contains certain "forward looking
statements" and certain "forward-looking information" as defined
under applicable Canadian securities laws. Forward-looking
statements and information can generally be identified by the use
of forward-looking terminology such as "may", "will", "should",
"expect", "intend", "estimate", "anticipate", "believe",
"continue", "plans" or similar terminology.
Forward-looking statements and information include, but are not
limited to, statements with respect to the future growth and
development of the Company. Forward-looking statements and
information are based on forecasts of future results, estimates of
amounts not yet determinable and assumptions that, while believed
by management to be reasonable, are inherently subject to
significant business, economic and competitive uncertainties and
contingencies. Forward-looking statements and information are
subject to various known and unknown risks and uncertainties, many
of which are beyond the ability of Elemental to control or predict,
that may cause Elemental's actual results, performance or
achievements to be materially different from those expressed or
implied thereby, and are developed based on assumptions about such
risks, uncertainties and other factors set out herein, including
but not limited to: the requirement for regulatory approvals and
third party consents, the impact of general business and economic
conditions, the absence of control over the mining operations from
which Elemental will receive royalties, including risks related to
international operations, government relations and environmental
regulation, the inherent risks involved in the exploration and
development of mineral properties; the uncertainties involved in
interpreting exploration data; the potential for delays in
exploration or development activities; the geology, grade and
continuity of mineral deposits; the impact of the COVID-19
pandemic; the possibility that future exploration, development or
mining results will not be consistent with Elemental's
expectations; accidents, equipment breakdowns, title matters, labor
disputes or other unanticipated difficulties or interruptions in
operations; fluctuating metal prices; unanticipated costs and
expenses; uncertainties relating to the availability and costs of
financing needed in the future; the inherent uncertainty of
production and cost estimates and the potential for unexpected
costs and expenses, commodity price fluctuations; currency
fluctuations; regulatory restrictions, including environmental
regulatory restrictions; liability, competition, loss of key
employees and other related risks and uncertainties. Elemental
undertakes no obligation to update forward-looking information
except as required by applicable law. Such forward-looking
information represents management's best judgment based on
information currently available. No forward-looking statement can
be guaranteed, and actual future results may vary materially.
Accordingly, readers are advised not to place undue reliance on
forward-looking statements or information.
SOURCE Elemental Royalties Corp.