Quarterly production improved although mine conditions remain challenging.
Production in 2016 was 1.44M oz AgEq which represents a ~11%
decrease YoY if you adjust for metal price differences. Due to challenging conditions, substantial production in Q4 originated from the fringes and
areas outside of the Rodilla Manto’s block model, which increased dilution and reduced grades. However, quarterly metal production increased by 4%
QoQ and 3% YoY when adjusting for metal price differences. As mining conditions improve on the back of the ongoing optimization program, Excellon plans
to progress mine development towards the higher grade 623 Manto and the Rodilla core, which is one of the mine’s deepest areas and is currently below
the water table. We expect production to increase later this year when the optimization program is completed.
Water management program progressing.
Excellon reported that over the course of Q4, two submersible pumps were commissioned, resulting
in drawdown of over one meter during the first week of operations, which is 150% higher than what was expected. In addition, drilling of nine out of
fourteen wells has been completed. The company is now expecting the optimization program to be completed later this quarter with dry mining conditions
achieved in Q2 2017. In our view, the completion of optimization measures is critical to improve mining conditions, reduce costs and increase production.
Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
Red Cloud Klondike Strike Inc.
79 Wellington St. W. Suite 1630, PO Box 148
Toronto ON, M5K 1H1
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Company Specific Disclosure Details Excellon Resources Inc. - TSX:EXN - 2,4
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