VANCOUVER, Nov. 30, 2017 /CNW/ - Marlin Gold Mining
Ltd. (TSX-V: MLN) ("Marlin" or the "Company") is pleased to
announce its financial results for the three and nine months ending
September 30, 2017 ("Q3" and the
"First Nine Months 2017," respectively). This press release
should be read in conjunction with the Company's Condensed Interim
Consolidated Financial Statements for the three and nine months
ended September 30, 2017 and 2016 as
well as Management's Discussion & Analysis ("MD&A") for the
same period, available on the Company's website at
www.marlingold.com and under the Company's name on SEDAR at
www.sedar.com. All monetary amounts are expressed in Canadian
dollars unless otherwise specified.
Marlin began continuously mining the high grade HS Zone at the
La Trinidad gold mine in
Sinaloa, Mexico (the "La Trinidad
Mine") on September 15, 2016, and
began recovering gold from this area early in the fourth quarter of
2016 ("Q4"). For the First Nine Months 2017, the Company
produced 29,955 ounces of gold and sold 36,112 ounces.
Adjusted EBITDA was $0.0 million
($0.00 per share) and $27.1 million ($0.16 per share) in Q3 and the First Nine Months
2017, respectively.1 Net Loss was
$6.7 million ($0.04 per share) and $13.9
million ($0.08 per share) in
Q3 and the First Nine Months 2017, respectively.
The current assets of the Company at Q3 stand at $42.3 million ($0.25 per share). Cash and finished gold
account for $1.9 million of current
assets, while inventories account for $17.2
million. Inventories included $1.3 million of finished gold and $14.4 million of gold-in-process.
Investments in shares of Golden Reign Resources Ltd. stood at
$12.7 million at quarter end.
Akiba Leisman, Executive Chairman
and Interim CEO states that, "Q3 was an especially active quarter
for Marlin. Most of the activity focused on expanding and
deepening the north side of the Taunus pit and mitigating the rainy
season at the La Trinidad Mine. Rainy season ended in early
October and the Company regained access to the remaining high grade
HS Zone in the north side of the Taunus pit. The Company is
now focused on accessing the high grade HS Zone in the south side
of the pit, drilling exploration targets at Colinas (less than one
kilometer from the pit) and completing an expanded 30-hole
exploration program at Commonwealth."
Q3 and First Nine Months 2017 Highlights
- Production of 29,955 (2016 – 5,106) ounces of gold in the First
Nine Months 2017
- Sale of 36,112 (2016 – 5,651) ounces of gold in the First Nine
Months 2017
- Revenue of $58.2 million (2016 –
$9.5 million) in the First Nine
Months 2017
- On July 5, 2017, August 8, 2017 and August
30, 2017, the Company received US$2
million, US$5 million and
$1.9 million, respectively, from the
Wexford Funds, increasing the Wexford Loan to US$38.9 million
- On August 17, 2017, the Company
completed the acquisition of the Gavilanes Property located in
Durango State, Mexico from
Santacruz Silver Mining Ltd for total consideration of US$3.6 million
- On August 25, 2017, the Wexford
Funds extended the maturity on the Wexford Loan by one year
- In the First Nine Months 2017, the Company initiated another
normal course issuer bid (the "NCIB"), pursuant to which the
Company has purchased 1.26 million common shares in the capital of
the Company. All common shares acquired by the Company under the
NCIB have been returned to treasury and cancelled
Highlights Subsequent to September 30,
2017
- On October 24, 2017 and
November 14, 2017, the Company
received US$1.1 million and
US$1.5 million, respectively, from
the Wexford Funds, increasing the Wexford Loan to US$41.5 million.
- On October 30, 2017, the Company
received $89,416 (US$69,655), the cash equivalent of the second 55
troy ounces of gold as part of the proceeds from the sale of the
El Compas gold-silver mining
project
La Trinidad Update
The Company mined what could safely be accessed in the north
part of the high grade HS Zone by January 2017. During this
time, a surface stockpile was accumulated that, when combined with
inventory in the leach pad, reached $40.3
million of gold-in-process in Q4. The surface
stockpile was largely depleted in Q2 2017 and the proceeds were
used to fund waste removal to regain access to the high grade HS
Zone and a leach pad expansion.
Marlin returned to mining high grade HS Zone mineralization in
the north side of the Taunus pit in early August. Since then,
gold stacked to the leach has been steadily increasing.
Month-to-date November, over 5,700 ounces of gold have been stacked
on the leach pad, daily gold recoveries are now exceeding 125
ounces and expected to continue to rise and a stockpile of
approximately 20,000 tonnes (containing approximately 1,200 ounces
of gold) has been accumulated in front of the crusher.
Importantly, mining of the high grade mineralization in the south
HS Zone is expected to commence in approximately two months.
A drill program at the Colinas target less than one kilometer
from the Taunus pit commenced with assays on the first two holes
released earlier this week. Diamond drill hole 17COLDDH02
intersected 10.57 g/t Au over 6.00 meters (see press release dated
November 27, 2017). Assays from
additional drill holes at Colinas are expected by year-end.
Commonwealth Update
In the First Nine Months 2017, $3.2
million of exploration was expensed at Marlin's wholly owned
Commonwealth silver and gold property in Cochise County, Arizona (the "Commonwealth
Project"). Notably, drill results at the Commonwealth Project
are surpassing the Company's expectations. Specifically,
results from the Six Mile Hill target (see press release dated
July 17, 2017) are pointing to a
discovery that the Company is aggressively following up on.
An expanded 30-hole drill program (up from 15) is currently
underway at Six Mile Hill with first results expected in early
January. Additionally, an approximately 10-tonne
comprehensive metallurgical program is also underway, with results
also expected early in 2018.
Sailfish Update
On June 27, 2017, Sailfish entered
into a definitive agreement to acquire a 3.5% royalty (the "TZ
Royalty") on the advanced stage Tocantinzinho gold project in
Brazil owned by Eldorado Gold
Corp. for US$6.5 million in cash and
US$5.5 million in common shares of
Sailfish (see press release dated June
28, 2017). The TZ Royalty, along with Sailfish's
interest in the gold stream agreement with Golden Reign Resources
Ltd. on its high grade San Albino gold deposit in Nicaragua (the "SA Gold Stream"), which is
expected to begin production in late 2018, gives Sailfish enough
scale to operate as a separate publicly traded royalty
company.
Marlin received an interim order from the Supreme Court of
British Columbia dated
November 15, 2017, authorizing the
Company to convene an annual and special meeting of its
shareholders on December 14, 2017 for
the purpose of, among other things, considering and approving an
arrangement under the Business Corporations Act
(British Columbia) (the
"Arrangement"), which would result in the spin-out of Sailfish to
Marlin's shareholders (the "Spin-out"). Marlin expects to
complete the Spin-out shortly thereafter, subject to the concurrent
closing of the acquisition of the TZ Royalty.
Gavilanes Acquisition
On August 17, 2017, Marlin
completed the acquisition of the Gavilanes property in Durango, Mexico for cash consideration of
US$3.5 million, plus applicable value
added taxes (see joint press release dated August 17, 2017). The Company will be
evaluating next steps for the Gavilanes property, which may include the
creation of a separate publicly traded exploration company.
Wexford Loan
Principal on the loan owed to affiliates of the Company's
controlling shareholder, Wexford Capital LP (together the "Wexford
Funds"), stood at US$38.9 million at
Q3. During the quarter, the Wexford Funds extended the
maturity on the Wexford Loan by one year to January 15, 2019 for no additional fees.
Subsequent to the quarter end, an additional US$2.6 million in loans were received to support
exploration efforts at Commonwealth and La Trinidad.
Financial Summary
($000's)
|
Q3
2017
|
Q3 2016
|
First Nine
Months
2017
|
First Nine
Months
2016
|
Revenue
|
8,825
|
3,539
|
58,175
|
9,447
|
Net profit
(loss)
|
(6,680)
|
(6,087)
|
(13,872)
|
(18,196)
|
Net profit (loss) per
share
|
(0.04)
|
(0.04)
|
(0.08)
|
(0.13)
|
Adjusted
EBITDA(1)
|
(13)
|
(1,926)
|
27,138
|
(2,144)
|
Adjusted EBITDA per
share(1)
|
(0.00)
|
(0.01)
|
0.16
|
(0.02)
|
Gold ounces produced
(troy ounces)(2)
|
5,614
|
1,614
|
29,955
|
5,106
|
Gold ounces sold
(troy ounces)
|
5,886
|
1,985
|
36,112
|
5,651
|
Weighted average
number of shares outstanding (000's)
|
171,785
|
135,470
|
172,266
|
138,932
|
|
|
(1)
|
This is a non-IFRS
measure; refer to Non-IFRS Measures section of this press release
and see below for reconciliation to the Company's financial
statements.
|
(2)
|
Does not include
ounces in stockpiled material.
|
Reconciliation of
Adjusted EBITDA ($000's)
|
Q3
2017
|
Q3 2016
|
First Nine
Months
2017
|
First Nine
Months
2016
|
Net profit
(loss)
|
(6,680)
|
(6,087)
|
(13,872)
|
(18,196)
|
Accretion and
interest expense, net of interest income
|
1,493
|
1,894
|
4,659
|
5,145
|
Income tax expense
and deferred tax recovery
|
-
|
-
|
372
|
-
|
Depreciation,
depletion and amortization
|
3,842
|
447
|
31,219
|
1,819
|
EBITDA
|
(1,345)
|
(3,746)
|
22,379
|
(11,232)
|
Impairments(3)
|
1,332
|
1,820
|
4,759
|
9,089
|
Adjusted
EBITDA
|
(13)
|
(1,926)
|
27,138
|
(2,144)
|
|
|
(3)
|
Categories under
"Impairments" include impairment of mineral property, inventory
write down and impairment write-down of gold-in-process. EDITDA is
adjusted by these categories, as they are non-recurring in
nature.
|
Balance Sheet
Summary ($000's)
|
Q3
2017
|
Q3 2016
|
Current
Assets(4)
|
42,344
|
28,844
|
Total
Assets
|
102,891
|
100,486
|
Total
Liabilities
|
84,924
|
78,982
|
Equity
|
17,967
|
21,504
|
|
|
(4)
|
Q3 2017
includes $14,430,228 of gold-in-process and $1,269,438 of finished
gold.
|
Non-IFRS Measures
The discussion of financial results in this press release
includes reference to Adjusted EBITDA, which is a non-
International Financial Reporting Standards ("IFRS") measure.
Ajdusted EBITDA does not have any standard meaning under
IFRS, and therefore may not be comparable to Adjusted EBITDA
presented by other issuers. The Company provides this measure
as additional information regarding the Company's financial results
and performance.
Qualified Person
Dr. Matthew D. Gray. C.P.G., of
Resource Geosciences Incorporated, which oversees, directly or
indirectly, the Company's exploration programs in Mexico and Arizona, a Qualified Person under the
definitions of CSA NI 43-101, has
supervised the preparation of the information that forms the basis
for the scientific and technical disclosure in this news
release.
Notes on sampling and assaying of drill holes in this press
release can be found in the previously disseminated press releases
referenced herein.
About Marlin
Marlin is a growth-oriented gold and silver mining company
focused on the Americas. The company owns three properties
located in Mexico and the
USA and a portfolio of
royalties. Marlin's priority is to profitably operate its La
Trinidad Mine, conduct further exploration on its other projects
and enhance shareholder value through growth of its wholly owned
subsidiary, Sailfish Royalty Corp. Marlin is backed by a
well-funded investor with a successful track record in the
resources sector. The La Trinidad Mine in Sinaloa, Mexico declared commercial production
on November 1, 2014 and is one of the
highest-grade open pit heap leach gold mines in Mexico.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as the term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
None of the securities to be issued under the Arrangement
have been or will be registered under the United States Securities
Act of 1933, as amended, or any state securities laws, and such
securities are anticipated to be issued in the United States pursuant to exemptions from
such registration requirements. This news release does not
constitute an offer of any securities for sale, nor a solicitation
for offers to buy any securities.
Cautionary statement regarding
forward‐looking information
This news release contains "forward-looking statements"
within the meaning of applicable securities laws. Forward-looking
statements are statements that are not historical facts and are
generally, but not always, identified by words such as the
following: expects, plans, anticipates, believes, intends,
estimates, projects, assumes, potential and similar expressions.
Forward-looking statements also include reference to events or
conditions that will, would, may, could or should occur, including,
without limitation statements relating to: the receipt of assay
results; the anticipated access to mineralized material at the
Taunus Pit; the timing of certain drilling and metallurgical
programs; the anticipated uses of the Increased Facility; and the
completion of the Arrangement. These forward-looking statements are
necessarily based upon a number of estimates and assumptions that
are based on management's expectations and considered reasonable at
the time they are made, including among others: that work proceeds
in accordance with the timing and scope anticipated by management;
that the projects that the Company and Sailfish have a stream or
royalty interest in are advanced as contemplated by the project
owners and operators; that the Company will obtain all necessary
court, shareholder and regulatory approvals for the Arrangement and
the Spin-out; that the Company will be able to complete the
Spin-out as expected; that the Sailfish shares will be accepted for
listing on the TSX-V; that the Company will hold the Meeting on or
about December 14, 2017; and that the
Company will complete the acquisition of the TZ Royalty
concurrently with the Arrangement. Investors are cautioned that all
forward-looking statements are inherently subject to a variety of
risks and uncertainties which could cause actual events or results
to differ materially from those reflected in the forward-looking
statements, including, without limitation: uncertainties related to
raising sufficient financing to fund planned work in a timely
manner and on acceptable terms; changes in planned work resulting
from logistical, technical or other factors; the possibility that
results of work will not fulfill projections/expectations and
realize the perceived potential of the Company's projects;
uncertainties involved in the interpretation of drilling results
and other tests and the estimation of gold resources; risk of
accidents, equipment breakdowns and labour disputes or other
unanticipated difficulties or interruptions; the possibility of
environmental issues at the Company's projects; the possibility of
cost overruns or unanticipated expenses in work programs; the need
to obtain permits and comply with environmental laws and
regulations and other government requirements; fluctuations in the
price of gold; the risk that the project in which the Company
and/or Sailfish have a stream or royalty interest in are not put
into production as presently contemplated or at all; the risk that
the Company is unable to obtain all necessary court, shareholder
and regulatory approvals for the Arrangement as and when expected
or at all; the risk that the Company is unable to complete the
Arrangement as expected or at all; the risk that the Company fails
to hold the Meeting when expected; the risk that the Company may
not close the acquisition of the TZ Royalty as expected or at all;
and other risks and uncertainties, including those described in the
Company's annual management's discussion and analysis filed on
SEDAR at www.sedar.com. As a result, readers are
cautioned not to place undue reliance on these forward-looking
statements. The forward-looking statements contained in this news
release are made as of the date of this release. Unless required by
law, Marlin has no intention to and assumes no obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
___________________________
1 This is a non-IFRS measure; refer to Non-IFRS Measures
section of this press release and see below for reconciliation to
the Company's financial statements.
SOURCE Marlin Gold Mining Ltd.