Search Results for "Africa"

East Africa Metals Announces SinoTech Elects to Exercise $805,000 in Warrants

VANCOUVER, BC–(Marketwired – August 23, 2016) – East Africa Metals Inc. (TSX VENTURE: EAM) (“East Africa” or the “Company”) is pleased to report that long time shareholder SinoTech (Hong Kong) Corporation Limited (“SinoTech”) has elected to exercise 3,500,000 warrants at a price of $0.23 realizing $805,000 CDN for the Company. The exercise will bring SinoTech’s total holdings to 37,788,062 or 32.1% of the Company. SinoTech is a private share company incorporated October 26, 2010, that has supported East Africa’s advancement activities for a number of years.

The proceeds will be used for ongoing technical, permitting and exploration expenditures as the Company prepares to advance the Terakimti Oxide Gold Project to the development stage, and prepare the Mato Bula and Da Tambuk deposits for mine permitting.

East Africa’s management anticipates an active Fall program on the development and exploration fronts as the Company looks to address corporate objectives including; completion of mine permitting, close project financing and on receipt of the mining permit initiate development for the Terakimti Oxide Gold project, the initiation of operations at Magambazi in Tanzania, and continuing to grow the Company’s mineral resource base in Ethiopia through exploration and definition drilling.

The Company’s current resource base in Ethiopia comprises 926,000 gold equivalent ounces in the indicated category plus 860,000 gold equivalent ounces in the inferred category (see table below and news release dated June 29, 2016) from Terakimti, Mato Bula and Da Tambuk. Exploration targets planned to be tested to continue the growth of the resource base include the VTEM09 and Mayshehagne prospects, and additional targets along the largely underexplored Mato Bula/Da Tambuk trend.

“The continued support of SinoTech as we develop our Ethiopian assets is greatly appreciated”, stated Andrew Lee Smith, Company President and CEO. “East Africa Metals expects to continue to benefit from the contributions of our Beijing-based partner as we continue to advance the Harvest and Adyabo Projects”.

East Africa’s Mineral Resources at Harvest (Terakimti) and Adyabo Projects

Project Ownership Resource Summary
Adyabo 3(Indicated) 100% 446K Ounces AuEquiv
Adyabo 3(Inferred) 100% 434K Ounces AuEquiv
Terakimti Oxide Update 1 (Indicated) 70% (Permit Pending) 132K Ounces AuEquiv
Terakimti Sulphide 2 (Indicated) 70% 348K Ounces AuEquiv 139M lbs CuEquiv
Terakimti Sulphide 2 (Inferred) 70% 426K Ounces AuEquiv 170M lbs CuEquiv

The resources stated above have been previously disclosed in News Releases. (Terakimti Initial Resource Estimate disclosed via news release dated January 27, 2014; effective date January 17, 2014. Terakimti Gold Oxide disclosed via news release October 27, 2015; effective date October 18, 2015. Subsequent to the release of the Terakimti Gold Oxide Resource update, a review by the resource QP identified an error in the tabulation of mineral resources. The corrected resource information was disclosed via news release on January 11, 2016. Adyabo project updated mineral resource estimate disclosed via news release dated June 14, 2016; effective date May 31, 2016).

1Terakimti Gold Oxide Resource update disclosed October 27, 2015; effective date October 18, 2015. Full mineral resource estimate disclosure can be found in the company’s news release dated October 27, 2015, available at www.eastafricametals.com or at www.sedar.com. Subsequent to the release of the Terakimti Gold Oxide Resource update, a review by the resource QP identified an error in the tabulation of mineral resources. The corrected resource information was disclosed via news release on January 11, 2016. Metal prices for gold and silver are $1,300/oz and $17.50/oz, respectively.

2Terakimti Initial Resource Estimate disclosed via new release dated January 27, , 2014; effective date January 17, 2014. Full mineral resource estimate disclosure can be found on the company’s website or at www.sedar.com. Metal prices for gold, silver, copper, and zinc are $1,400/oz, $25.00/oz, $3.50/lb, and $0.90/lb, respectively.

3Adyabo project updated mineral resource estimate disclosed via news release dated June 14, 2016; effective date May 31, 2016. Metal prices for gold, silver, and copper are $1,400/oz, $20.00/oz, and $3.20/lb, respectively. Metallurgical recoveries of 88.5% for gold, 87.5% for copper and 50% for silver were applied at Mato Bula and Mato Bula North. Metallurgical recoveries of 97% for gold, 72% for copper, and 50% for silver were applied at Da Tambuk.

Gold Equivalent grade calculator (Au, Ag, Cu):Au g/t + (Ag g/t*$Au/$Ag) + (Cu %*22.0462*$Cu)/($Au/31.1035)|||Gold Equivalent grade calculator (Au, Ag, Cu, Zn):Au g/t + (Ag g/t*$Au/$Ag) + (Cu %*22.0462*$Cu)/($Au/31.1035) + (Zn %*22.0462*$Zb)/($Au/31.1035)|||Copper Equivalent grade calculator (Cu, Au, Ag):Cu % + ((Au g/t*$Au)+(Ag g/t*$Ag)/(22.0462*$Cu*31.0135)|||Copper Equivalent grade calculator (Cu, Au, Ag, Zn):Cu % + ((Au g/t*$Au)+(Ag g/t*$Ag)/(22.0462*$Cu*31.0135) + Zn%*$Zn/$Cu|||31.1035 is a grams/ounce conversion factor. 22.0462 is a tonne/pound conversion factor.

About East Africa

The Company’s principal assets and interests include both the 70%-owned Harvest polymetallic VMS exploration Project, which hosts the Terakimti Deposit and which covers approximately 86 square kilometres in the Tigray region of Ethiopia, 600 kilometres north‐northwest of the capital city of Addis Ababa, and the Adyabo Project, hosting the Mato Bula trend Adyabo Resource, covering 225 square kilometres immediately west of the Harvest Project. The Company owns 80% of the Adyabo Project, and upon execution of a net smelter return agreement the Company will own 100% of the Adyabo Project, subject to a 2% NSR. East Africa now has mineral resources defined at both projects in Ethiopia and plans to continue to test priority targets. Additionally, the Company owns the 91 square kilometre Handeni Property located in north-eastern Tanzania. Handeni includes the Magambazi Project, a gold deposit discovered in 2009. East Africa has entered into a definitive agreement with an arm’s length private exploration and development company to advance the project.

More information on the Company can be viewed at the Company’s website: www.eastafricametals.com. Jeff Heidema, P.Geo., a Qualified Person under the definitions of National Instrument 43-101, has reviewed and approved the contents of this news release.

On behalf of the Board of Directors:
Andrew Lee Smith, P.Geo., CEO

Cautionary Statement Regarding Forward-Looking Information

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “plan”, “expect”, “intend”, “estimate”, “forecast”, “project”, “budget”, “schedule”, “may”, “will”, “could”, “might”, “should” or variations of such words or similar words or expressions. Forward-looking information is based on reasonable assumptions that have been made by East Africa as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of East Africa to be materially different from those expressed or implied by such forward-looking information, including but not limited to: receipt of the Terakimti Gold Oxide Resource mining permit; closing of project finance; early exploration; the closing of the agreement with the exploration and development company to advance the Magambazi Project or identify any other corporate opportunities for the Company; mineral exploration and development; metal and mineral prices; availability of capital; accuracy of East Africa’s projections and estimates, including the initial mineral resource for the Adyabo, Harvest and Magambazi Projects; estimated exploration licence extensions; interest and exchange rates; competition; stock price fluctuations; availability of drilling equipment and access; actual results of current exploration activities; government regulation; political or economic developments; foreign taxation risks; environmental risks; insurance risks; capital expenditures; operating or technical difficulties in connection with development activities; personnel relations; the speculative nature of strategic metal exploration and development including the risks of diminishing quantities of grades of reserves; contests over title to properties; and changes in project parameters as plans continue to be refined, as well as those risk factors set out in East Africa’s management’s discussion and analysis for the year end December 31, 2015; management’s discussion and analysis for the three months ended March 31, 2016; East Africa’s listing application dated July 8, 2013 and Tigray Resources Inc. Management Information Circular dated March 28, 2014. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The contained gold, copper and silver figures shown are in situ. No assurance can be given that the estimated quantities will be produced. Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to the successful integration of Tigray Resources Inc.’s business with the Company; the price of gold, silver, copper and zinc; the demand for gold, silver, copper and zinc; the ability to carry on exploration and development activities; the timely receipt of any required approvals including mining permits; the ability to obtain qualified personnel, equipment and services in a timely and cost-efficient manner; the ability to operate in a safe, efficient and effective manner; and the regulatory framework regarding environmental matters, the renewal or extension of exploration licences, and such other assumptions and factors as set out herein. Although East Africa has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. The Company does not update or revise forward looking information even if new information becomes available unless legislation requires the Company do so. Accordingly, readers should not place undue reliance on forward-looking information contained herein, except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information contact:
Nick Watters
Business Development
Telephone +1 (604) 488-0822
Email investors@eastafricametals.com
Website www.eastafricametals.com

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Silver Bull’s Mitzic Iron Ore License in Gabon, Central Africa Renewed

Silver Bull Resources, Inc. (TSX:SVB) was granted renewal of its 2,000 square kilometer Mitzic license by the Ministry of Mines in Gabon for an additional 3 years. Silver Bull also reported results of the work program on the Mitzic License completed over the last 2 years.

As quoted in the press release:

The Mitzic license lies 180km northeast of the capital city of Libreville and is accessed via a paved road directly to site and lies 60km to the north of a functioning railway. In addition to the Mitzic license, Silver Bull also recently renewed its 2,000 square kilometer “Ndjole” license which is highly prospective for gold and manganese.

Mitzic License – Iron Results: A regional reconnaissance work program on the Mitzic license targeting over 70 kilometers of magnetic highs has confirmed the widespread presence of a coarse grained, magnetite rich, Banded Iron Formation “BIF” averaging approximately 40% Fe. Localized supergene and hypogene enrichment in excess of 65% Fe is seen in the field but is thus far poorly constrained. Geological mapping shows the BIF forms a series of topographic highs with up to 300m of relief and has localized evidence of thickening through folding and faulting. The steep dipping nature of the BIF’s also suggests they continue at depth.

Click here to read the Silver Bull Resources (TSX:SVB) press release

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Silver Bull Announces Termination of Ndjole-Mevang and Ogooue Joint Ventures in Central Africa

AngloGold Ashanti Holdings has notified Silver Bull Resources, Inc. (TSX:SVB) on terminating the Ndjole-Mevang and Ogooue joint venture agreements in Gabon, Central Africa.

As quoted in the press release:

Under the terms of the joint venture, AngloGold earned a 20% interest by paying to Dome US $400,000 upon signing of the joint venture agreement in October 2009. AngloGold could then earn an additional 40% interest by paying Dome US $100,000 per year over the next three years and by spending US $3.7 million on exploration over this period. By terminating the joint venture AngloGold forfeits all its interests in these licenses and 100% of these licenses return to Dome.

In addition to the Ndjole-Mevang joint venture, AngloGold, aided by Dome, also acquired a reconnaissance license under its own name over an area comprising 8,295 square kilometers in Gabon, West Africa. Dome retained a 20% interest in the license with AngloGold making a firm commitment to spend US $100,000 on exploration and to solely fund the first US $3 million of exploration expenditures, after which the parties would contribute on an 80/20 basis.

Silver Bull Resources President and CEO Tim Barry said:

We wish to thank AngloGold for the professional manner in which it carried out its obligations under the joint venture agreements and for significantly advancing the projects. We remain very positive about the exploration opportunities that exist in Gabon, especially on the manganese and gold potential we see in the Ndjole area, and the iron ore potential of our Mitzic license – which was not part of the AngloGold joint venture.

Click here to read the Silver Bull Resources (TSX:SVB) press release

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Sono Extends High-Resolution Aeromag Program on its Copper/Silver Project in Botswana, Africa

Sono Resources Inc. (OTC:SRCI) announced it has extended its aeromag program at its copper-silver property in Botswana.

The press release is quoted as saying:

After an initial review of the high-resolution magnetic data, target horizon extensions were identified from a detailed technical analysis of the local geology which matches the geological model of the Kalahari Copper Belt. Therefore, the decision was made to fly additional line kilometers over the Company’s three license blocks.

To read the full press release, click here.


Rockgate Announces Positive Metallurgy Results with Recoveries of 90% for Uranium and 77.5% for Silver, Falea U-Ag-Cu Project, Mali, West Africa

Rockgate Capital Corp. (TSX VENTURE:RGT) reported positive results from preliminary metallurgical testwork completed on the North Zone at the Falea Uranium Silver Copper project by SGS South Africa Mineralogical Services.

The press release is quoted as saying:

Silver leach recoveries can likely be improved using a finer grind and/or employing a stronger cyanide solution. Further testwork is required to optimize silver leach recoveries. Similarly, further flotation testing will focus on optimization of copper and silver concentrates.

Click here to access the entire press release

Click here to access Rockgate Capital Corporate Site


Barrick: Pricing of African Barrick Gold plc Initial Public Offering

Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) reported the pricing of the initial public offering of African Barrick Gold plc , a new company whose equity will be admitted to the Official List of the Financial Services Authority and to trading on the London Stock Exchange’s main market for listed securities.

The press release is quoted as saying:

An offer price of GBP 5.75 per ordinary share has been set and the net proceeds of the offering are expected to be approximately $834 million, which will be paid to Barrick.

Click here to access the entire press release

Click here to access Barrick Gold Corporate Site


A-Mark Precious Metals Reports Fiscal Fourth Quarter and Full Year 2016 Results

SANTA MONICA, Calif., Sept. 21, 2016 (GLOBE NEWSWIRE) — A-Mark Precious Metals, Inc. (NASDAQ:AMRK), a full-service precious metals trading company and an official distributor for all the major sovereign mints, reported results for the fiscal fourth quarter and full year ended June 30, 2016.

Fiscal Q4 2016 Highlights (compared to the same year-ago quarter)

  • Revenues increased 19% to $1.74 billion
  • Gross profit increased 27% to $7.6 million
  • Net income decreased 58% to $1.1 million or $0.15 per diluted share
  • Gold ounces sold increased 48% to 711,000 ounces
  • Silver ounces sold increased 17% to 25.8 million ounces
  • Trading ticket volume decreased 8% to 20,964 tickets

Fiscal Q4 2016 Financial Results
Revenues increased 19% to $1.74 billion from $1.45 billion in the same year-ago quarter. The increase in revenue was primarily due to a 48% increase in gold ounces sold and a 17% increase in silver ounces sold, driven by demand for the company’s primary products, as well as a 5% increase in the price of gold.

Gross profit increased 27% to $7.6 million (0.44% of revenue) from $6.0 million (0.41% of revenue) in the same year-ago quarter. The improvement in gross profit margin was primarily due to better performance of the company’s higher-margin custom coin products.

Selling, general and administrative expenses increased 46% to $5.9 million from $4.1 million in the same year-ago quarter. The increase was primarily due to higher performance-based compensation accruals, IT system consulting costs, as well as operational costs related to the Las Vegas logistics facility established to provide fulfillment services to customers.

Interest income increased 53% to $2.4 million from $1.6 million in same year-ago quarter, driven primarily by an increase in the size of the company’s loan portfolio, as well as an improvement in certain finance products.

Interest expense increased 88% to $2.1 million from $1.1 million in same year-ago quarter, which was primarily due to greater usage of the company’s lines of credit and other product financing arrangements.

Net income decreased 58% to $1.1 million or $0.15 per diluted share from $2.6 million or $0.36 per diluted share in the same year-ago quarter. The decrease was primarily due to a higher provision for income taxes, as well as higher interest expense and selling, general and administrative expenses. The decrease in net income was partially offset by higher gross profit and interest income compared to the same year-ago quarter.

Fiscal 2016 Highlights (compared to the same year-ago period)

  • Revenues increased 12% to $6.78 billion
  • Gross profit increased 41% to $34.5 million
  • Net income increased 31% to $9.3 million or $1.30 per diluted share
  • Gold ounces sold increased 45% to 3.0 million ounces
  • Silver ounces sold increased 43% to 126.3 million ounces
  • Trading ticket volume increased 4% to 88,486 tickets

Fiscal 2016 Financial Results
Revenues increased 12% to $6.78 billion from $6.07 billion in the same year-ago period, driven primarily by a 45% increase in gold ounces sold and a 43% increase in silver ounces sold. Key factors contributing to the increase in demand were the volatility and decrease in commodity prices during fiscal Q1 2016, which resulted in renewed investment interest in precious metals.

Gross profit increased 41% to $34.5 million (0.51% of revenue) from $24.5 million (0.40% of revenue) in the same year-ago period. The increase in gross margin was due, in part, to higher premium spreads on the company’s primary products, particularly during fiscal Q1 2016.

Selling, general and administrative expenses increased 30% to $22.2 million from $17.1 million in the same year-ago period. The increase was primarily due to higher performance-based compensation accruals, salary expenses, IT system consulting costs, and the operational cost of the company’s new logistics facility.

Interest income increased 45% to $8.8 million from $6.1 million in the same year-ago period. The increase was primarily due to an increase in the size of the company’s loan portfolio, as well as an improvement in certain finance products.

Interest expense increased 47% to $6.3 million from $4.3 million in the same year-ago period, which was primarily due to greater usage of the company’s lines of credit and product financing arrangements, increased interest rates and amortization of loan fees.

Net income increased 31% to $9.3 million or $1.30 per diluted share from $7.1 million or $1.00 per diluted share in the same period last year. The increase was primarily due to higher revenue, gross profits and interest income, partially offset by higher selling, general and administrative expenses, interest expense, and income taxes.

Management Commentary
“The fourth quarter was our eleventh consecutive quarter of profitability as a public company and marked a strong finish to a pivotal year in A-Mark’s development,” said company CEO, Greg Roberts. “Our performance in Q4 was reflected by double-digit growth in several key metrics, including revenue and gross profit. Our financial performance also demonstrated strong growth in our finance products, as reflected by the 53% increase in interest income during the quarter.

“Our results for the fourth quarter and full year illustrate the advantages of our unique business model, which is structured to provide consistent profitability in all market environments, while offering opportunities for significantly higher gross profit when we experience increased volatility and demand for our products and services. To this end, in fiscal 2016 we believe A-Mark has invested in its future successfully growing its capacity and future earnings potential. In step with this, we continue to pursue business development initiatives that can provide us with greater capacity and direct influence over our profitability. This includes growing our finance product portfolio and expanding our value-added service offerings, like minting, storage and logistics. To support these services, we will leverage the full capacity and advantages of our Las Vegas logistics facility, which began operations more than a year ago. This facility enables us to provide a full suite of ancillary services, allowing us to deepen our customer relationships and drive more predictable revenue growth and improved gross margins.

“An integral part of our long-term strategy is vertical integration. Our execution on this initiative was demonstrated by our recent strategic investment in SilverTowne Mint, a leading producer of fabricated silver products. SilverTowne Mint will be one of the most efficient vertically integrated mints in North America, benefiting from A-Mark’s industry-leading distribution network and Asahi’s unparalleled refining capabilities as part of the strategic supplier agreement. The numerous operating synergies between A-Mark and SilverTowne will significantly expand our capacity to meet unforeseen surges in demand during volatile market environments, such as the one we experienced last August and September.

“Along that line, during our fiscal first quarter of 2017 ending September 30, we have seen normal market conditions in precious metals compared to the high demand and volatility we experienced in the same year-ago period. That being said, we continue to be optimistic about our business and opportunities, but given current market conditions, do not anticipate our financial performance to be commensurate with the same year-ago period.

“Looking ahead, we expect that fiscal 2017 will be a year of continued execution on our plan that’s focused on growing our platform of turnkey solutions. We plan to build on this platform throughout the year in order to meet the current and changing demands of our customers. We also continue to look for strategic investments, like SilverTowne Mint, that are highly synergistic and complementary to our expanding platform.”

Conference Call
A-Mark will hold a conference call today (September 21, 2016) to discuss these financial results. The company’s CEO Greg Roberts, President Thor Gjerdrum and CFO Cary Dickson will host the call at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). A question and answer session will follow management’s presentation.

To participate, please dial the appropriate number at least five minutes prior to the start time, and ask for the A-Mark Precious Metals conference call.

U.S. dial-in number: 1-877-407-0789
International number: 1-201-689-8562

The conference call will be broadcast simultaneously and available for replay via the Investor Information section of A-Mark’s website at www.amark.com. If you have any difficulty connecting with the conference call or webcast, please contact Liolios Group at 949-574-3860.

A replay of the call will be available after 7:30 p.m. Eastern time through October 5, 2016.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Conference ID: 13645683

About A-Mark Precious Metals
A-Mark Precious Metals, Inc. is a full-service precious metals trading company and an official distributor for many government mints throughout the world. The company offers gold, silver, platinum and palladium in the form of bars, plates, powder, wafers, grain, ingots and coins. Its Industrial unit services manufacturers and fabricators of products utilizing or incorporating precious metals, while its Coin & Bar unit deals in over 200 coin and bar products in a variety of weights, shapes and sizes for distribution to dealers and other qualified purchasers. The company operates trading centers in Santa Monica, California, and Vienna, Austria, for buying and selling precious metals.

In addition to wholesale and trading activity, A-Mark offers customers a variety of services, including financing, consignment and various customized financial programs. As a U.S. Mint-authorized purchaser of gold, silver and platinum coins, A-Mark purchases bullion products directly from the U.S. Mint for sale to customers. A-Mark also has distributorships with other sovereign mints, including in Australia, Austria, Canada, China, Mexico and South Africa. Customers of A Mark include mints, manufacturers and fabricators, refiners, coin and metal dealers, banks and other financial institutions, jewelers, investors and collectors. For more information about A-Mark Precious Metals, visit www.amark.com.

Through its subsidiary Collateral Finance Corporation, a licensed California Finance Lender, the company offers loans collateralized by numismatic and semi-numismatic coins and bullion to coin and metal dealers, investors and collectors. Through its Transcontinental Depository Services subsidiary, it offers a variety of managed storage options for precious metals products to financial institutions, dealers, investors and collectors around the world. Through its A-M Global Logistics subsidiary, the company provides its customers an array of complementary services, including storage, shipping, handling, receiving, processing, and inventorying of precious metals and custom coins on a secure basis.

Important Cautions Regarding Forward-Looking Statements
Statements in this press release that relate to future plans, objectives, expectations, performance, events and the like are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ include the following: the failure to execute our growth strategy as planned; greater than anticipated costs incurred to execute this strategy; changes in the current international political climate which has favorably contributed to demand and volatility in the precious metals markets; increased competition for our higher margin services, which could depress pricing; the failure of our business model to respond to changes in the market environment as anticipated; general risks of doing business in the commodity markets; and other business, economic, financial and governmental risks as described in in the Company’s public filings with the Securities and Exchange Commission.

The words “should,” “believe,” “estimate,” “expect,” “intend,” “anticipate,” “foresee,” “plan” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

 

A-MARK PRECIOUS METALS, INC.CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except for share data)
 June 30,
2016
 June 30,
2015
ASSETS
Current assets:
Cash $ 17,142 $ 20,927
Receivables, net 43,302 30,025
Derivative assets 33,732 11,364
Secured loans receivable 70,004 48,666
Inventories:
Inventories 185,699 152,076
Restricted inventories 59,358 39,425
245,057 191,501
Income taxes receivable 7,318 7,846
Income taxes receivable from Former Parent 203 1,095
Prepaid expenses and other assets 1,503 1,202
Total current assets 418,261 312,626
Property and equipment, net 3,482 2,850
Goodwill 4,620 4,884
Intangibles, net 1,987 2,369
Long-term secured loans receivable 500 650
Long-term investments 7,873 2,500
Deferred tax assets – non-current 424 783
Total assets $ 437,147 $ 326,662
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Lines of credit $ 212,000 $ 147,000
Liability on borrowed metals 4,352 9,500
Product financing arrangement 59,358 39,425
Accounts payable 46,769 50,639
Derivative liabilities 36,454 17,897
Accrued liabilities 7,660 5,330
Total current liabilities 366,593 269,791
Deferred tax liabilities – non-current 7,245 909
Total liabilities 373,838 270,700
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 10,000,000 shares; issued and outstanding: none as of June 30, 2016 and 2015
Common Stock, par value $0.01; 40,000,000 shares authorized; 7,021,450 and 6,973,549 shares issued and outstanding as of June 30, 2016 and 2015, respectively 71 70
Additional paid-in capital 22,220 22,470
Retained earnings 41,018 33,422
Total stockholders’ equity 63,309 55,962
Total liabilities and stockholders’ equity $ 437,147 $ 326,662

A-MARK PRECIOUS METALS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share and per share data)
Years Ended June 30, 2016 2015
Revenues $ 6,784,039 $ 6,070,234
Cost of sales 6,749,518 6,045,736
Gross profit 34,521 24,498
Selling, general and administrative expenses (22,233 ) (17,131 )
Interest income 8,795 6,073
Interest expense (6,319 ) (4,311 )
Other income 701
Unrealized gains on foreign exchange 99 19
Net income before provision for income taxes 15,564 9,148
Provision for income taxes (6,293 ) (2,097 )
Net income $ 9,271 $ 7,051
Basic and diluted income per share:
Basic – net income $ 1.33 $ 1.01
Diluted – net income $ 1.30 $ 1.00
Weighted average shares outstanding:
Basic 6,981,900 6,962,800
Diluted 7,120,300 7,062,600
A-MARK PRECIOUS METALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
Years Ended June 30, 2016 2015
Cash flows from operating activities:
Net income $ 9,271 $ 7,051
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization 1,216 895
Amortization of loan cost 204
Deferred income taxes 6,695 (1,363 )
Interest added to principal of secured loans (83 ) (212 )
Share-based compensation 419 253
Earnings from equity method investment (701 )
Loss on sale of property and equipment 41
Changes in assets and liabilities:
Receivables (13,277 ) 9,354
Secured loans 4,345 (737 )
Secured loans to Former Parent (1,369 ) 2,562
Derivative assets (22,368 ) 10,820
Income tax receivable 528 (7,846 )
Inventories (53,556 ) (15,947 )
Prepaid expenses and other current assets (505 ) (589 )
Accounts payable (3,870 ) 5,995
Derivative liabilities 18,557 (14,885 )
Liabilities on borrowed metals (5,148 ) 791
Accrued liabilities 2,594 (740 )
Receivable from/payables to Former Parent 892 2,044
Income taxes payable (2,178 )
Net cash used in operating activities (56,156 ) (4,691 )
Cash flows from investing activities:
Capital expenditures for property and equipment (1,466 ) (1,784 )
Proceeds from the sale of property and equipment 60
Purchase of long-term investments (4,672 ) (2,000 )
Secured loans, net (24,081 ) (9,668 )
Net cash used in investing activities (30,219 ) (13,392 )
Cash flows from financing activities:
Product financing arrangement, net 19,933 14,815
Dividends paid (1,675 ) (698 )
Borrowings (repayments) under lines of credit, net 65,000 11,800
Release of common stock 1
Repurchase and retirement of restricted stock for payroll taxes (669 ) (100 )
Net cash provided by financing activities 82,590 25,817
Net (decrease) increase in cash and cash equivalents (3,785 ) 7,734
Cash and cash equivalents, beginning of period 20,927 13,193
Cash and cash equivalents, end of period $ 17,142 $ 20,927
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense $ 6,143 $ 4,141
Income taxes $ 149 $ 12,883
Non-cash investing and financing activities:
Interest added to principal of secured loans $ 83 $ 212

A-MARK PRECIOUS METALS, INC.
RESULTS OF OPERATIONS
(in thousands, except for per share data)
 Consolidated Results of Operations

The operating results of our business for the year ended June 30, 2016 and 2015 are as follows:

 
Years Ended June 30, 2016 2015 $ %
$ % of
revenue
$ % of
revenue
Increase/
(decrease)
Increase/
(decrease)
Revenues $ 6,784,039 100.000 % $ 6,070,234 100.000 % $ 713,805 11.8 %
Gross profit 34,521 0.509 % 24,498 0.404 % $ 10,023 40.9 %
Selling, general and administrative expenses (22,233 ) (0.328 )% (17,131 ) (0.282 )% $ 5,102 29.8 %
Interest income 8,795 0.130 % 6,073 0.100 % $ 2,722 44.8 %
Interest expense (6,319 ) (0.093 )% (4,311 ) (0.071 )% $ 2,008 46.6 %
Other income 701 0.010 % % $ 701 %
Unrealized gains on foreign exchange 99 0.001 % 19 % $ 80 NM
Net income before provision for income taxes 15,564 0.229 % 9,148 0.151 % $ 6,416 70.1 %
Provision for income taxes (6,293 ) (0.093 )% (2,097 ) (0.035 )% $ 4,196 200.1 %
Net income $ 9,271 0.137 % $ 7,051 0.116 % $ 2,220 31.5 %
Per Share Data:
Basic $ 1.33 $ 1.01 $ 0.32 31.7 %
Diluted $ 1.30 $ 1.00 $ 0.30 30.0 %

 

The operating results of our business for the three months ended June 30, 2016 and 2015 are as follows:
Three Months Ended June 30, 2016 2015 $ %
$ % of
revenue
$ % of
revenue
Increase/
(decrease)
Increase/
(decrease)
Revenues $ 1,735,210 100.000 % $ 1,453,402 100.000 % $ 281,808 19.4 %
Gross profit 7,563 0.436 % 5,951 0.409 % $ 1,612 27.1 %
Selling, general and administrative expenses (5,931 ) (0.342 )% (4,069 ) (0.280 )% $ 1,862 45.8 %
Interest income 2,430 0.140 % 1,591 0.109 % $ 839 52.7 %
Interest expense (2,105 ) (0.121 )% (1,122 ) (0.077 )% $ 983 87.6 %
Other income 88 0.005 % % $ 88 %
Unrealized gains on foreign exchange 90 0.005 % 226 0.016 % $ (136 ) NM
Net income before provision for income taxes 2,135 0.123 % 2,577 0.177 % $ (442 ) (17.2 )%
Provision for income taxes (1,067 ) (0.061 )% (11 ) (0.001 )% $ 1,056 NM
Net income $ 1,068 0.062 % $ 2,566 0.177 % $ (1,498 ) (58.4 )%
Per Share Data:
Basic $ 0.15 $ 0.37 $ (0.22 ) (59.5 )%
Diluted $ 0.15 $ 0.36 $ (0.21 ) (58.3 )%

 

CONTACT: Company Contact:
Thor Gjerdrum, President
A-Mark Precious Metals, Inc.
310-587-1414
thor@amark.com

Investor Relations Contact:
Matt Glover or Najim Mostamand
Liolios Group, Inc.
949-574-3860
AMRK@liolios.com


Prospero Announces Appointment of Officer and Grant of Stock Options

VANCOUVER, BRITISH COLUMBIA–(Marketwired – Sept. 22, 2016) – Prospero Silver Corp. (TSX VENTURE:PSL) (“Prospero” or the “Company”) is pleased to announce that it has appointed Mr. Ralph Rushton as Executive Vice President, Business Development of the Company. Mr. Rushton holds a B.Sc. in geology from Portsmouth University in the UK, a Master’s degree in Economic Geology from the University of Alberta, and a Certificate in Business Communications from Simon Fraser University. He has over 30 years’ experience in precious and base metals mining and exploration, much of which was gained working as a geologist in Southern Africa, the Middle East and Eastern Europe for Rio Tinto and Anglo American plc. For the last 13 years he has worked in business development for a number of junior resource companies and currently serves as a director on the boards of three Vancouver-based companies. He has experience in a broad range of commodities including precious and base metals, iron ore and phosphate, and has helped to raise over C$400mil through private placement financings to fund exploration and development programs in Latin America, Scandinavia and Eastern Europe.

The board of directors of the Company has approved the grant of 400,000 stock options (the “Options”) pursuant to the Company’s Share Option Plan to Mr. Rushton. The Options are exercisable at a price of $0.30 per share expiring on September 19, 2021 and vest as to 100,000 Options or 25% on the dates that are three, six, nine and twelve months from the date of grant.

About Prospero Silver Corp.:

Prospero is a Canadian resource company with the majority of its staff based in Mexico and who work for its wholly-owned subsidiary Minera Fumarola, SA de CV. Prospero’s objective, as a project generator, is to quickly evaluate properties it acquires for their suitability to provide size potential and/or amenability for strategic joint ventures. For additional information on Prospero, readers are encouraged to see the disclosure documents filed under the Company’s profile at www.sedar.com, and to visit the Company’s website at www.prosperosilver.com.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933 (the “1933 Act”) or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.

Neither the TSX nor its regulation services provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy and accuracy of this press release.

Prospero Silver Corp.
William Murray
Chairman
604-288-7813
www.prosperosilver.com

A-Mark Precious Metals Sets Fiscal Fourth Quarter and Full Year 2016 Earnings Call

SANTA MONICA, Calif., Sept. 15, 2016 (GLOBE NEWSWIRE) — A-Mark Precious Metals, Inc. (NASDAQ:AMRK), a full-service precious metals trading company and an official distributor for all the major sovereign mints, will hold a conference call on Wednesday, September 21 at 4:30 p.m. Eastern time to discuss results for the fiscal fourth quarter and full year ended June 30, 2016. Financial results will be issued in a press release prior to the call.

A-Mark’s CEO Greg Roberts, President Thor Gjerdrum and CFO Cary Dickson will host the presentation, followed by a question and answer period.

Date: Wednesday, September 21, 2016
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
U.S. dial-in number: 1-877-407-0789
International number: 1-201-689-8562

The conference call will be broadcasted live and available for replay in the Investor Relations section of A-Mark’s website at www.amark.com.

Please call the conference telephone number 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.

A replay of the call will be available after 7:30 p.m. Eastern time on the same day through October 5, 2016.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Conference ID: 13645683

About A-Mark Precious Metals
A-Mark Precious Metals, Inc. is a full-service precious metals trading company and an official distributor for many government mints throughout the world. The company offers gold, silver, platinum and palladium in the form of bars, plates, powder, wafers, grain, ingots and coins. Its Industrial unit services manufacturers and fabricators of products utilizing or incorporating precious metals, while its Coin & Bar unit deals in over 200 coin and bar products in a variety of weights, shapes and sizes for distribution to dealers and other qualified purchasers. The company operates trading centers in Santa Monica, California, and Vienna, Austria, for buying and selling precious metals.

In addition to wholesale and trading activity, A-Mark offers customers a variety of services, including financing, consignment and various customized financial programs. As a U.S. Mint-authorized purchaser of gold, silver and platinum coins, A-Mark purchases bullion products directly from the U.S. Mint for sale to customers. A-Mark also has distributorships with other sovereign mints, including in Australia, Austria, Canada, China, Mexico and South Africa. Customers of A Mark include mints, manufacturers and fabricators, refiners, coin and metal dealers, banks and other financial institutions, jewelers, investors and collectors. For more information about A-Mark Precious Metals, visit www.amark.com.

Through its subsidiary Collateral Finance Corporation, a licensed California Finance Lender, the company offers loans collateralized by numismatic and semi-numismatic coins and bullion to coin and metal dealers, investors and collectors. Through its Transcontinental Depository Services subsidiary, it offers a variety of managed storage options for precious metals products to financial institutions, dealers, investors and collectors around the world. Through its A-M Global Logistics subsidiary, the company provides its customers an array of complementary services, including storage, shipping, handling, receiving, processing, and inventorying of precious metals and custom coins on a secure basis.

CONTACT: Company Contact:
Thor Gjerdrum, President
A-Mark Precious Metals, Inc.
310-587-1414
thor@amark.com 

Investor Relations Contact:
Matt Glover or Najim Mostamand
Liolios Group, Inc.
949-574-3860
AMRK@liolios.com


A-Mark Precious Metals Sets Fiscal Fourth Quarter

SANTA MONICA, Calif., Sept. 15, 2016 (GLOBE NEWSWIRE) — A-Mark Precious Metals, Inc. (NASDAQ:AMRK), a full-service precious metals trading company and an official distributor for all the major sovereign mints, will hold a conference call on Wednesday, September 21 at 4:30 p.m. Eastern time to discuss results for the fiscal fourth quarter and full year ended June 30, 2016. Financial results will be issued in a press release prior to the call.

A-Mark’s CEO Greg Roberts, President Thor Gjerdrum and CFO Cary Dickson will host the presentation, followed by a question and answer period.

Date: Wednesday, September 21, 2016
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
U.S. dial-in number: 1-877-407-0789
International number: 1-201-689-8562

The conference call will be broadcasted live and available for replay in the Investor Relations section of A-Mark’s website at www.amark.com.

Please call the conference telephone number 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.

A replay of the call will be available after 7:30 p.m. Eastern time on the same day through October 5, 2016.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Conference ID: 13645683

About A-Mark Precious Metals
A-Mark Precious Metals, Inc. is a full-service precious metals trading company and an official distributor for many government mints throughout the world. The company offers gold, silver, platinum and palladium in the form of bars, plates, powder, wafers, grain, ingots and coins. Its Industrial unit services manufacturers and fabricators of products utilizing or incorporating precious metals, while its Coin & Bar unit deals in over 200 coin and bar products in a variety of weights, shapes and sizes for distribution to dealers and other qualified purchasers. The company operates trading centers in Santa Monica, California, and Vienna, Austria, for buying and selling precious metals.

In addition to wholesale and trading activity, A-Mark offers customers a variety of services, including financing, consignment and various customized financial programs. As a U.S. Mint-authorized purchaser of gold, silver and platinum coins, A-Mark purchases bullion products directly from the U.S. Mint for sale to customers. A-Mark also has distributorships with other sovereign mints, including in Australia, Austria, Canada, China, Mexico and South Africa. Customers of A Mark include mints, manufacturers and fabricators, refiners, coin and metal dealers, banks and other financial institutions, jewelers, investors and collectors. For more information about A-Mark Precious Metals, visit www.amark.com.

Through its subsidiary Collateral Finance Corporation, a licensed California Finance Lender, the company offers loans collateralized by numismatic and semi-numismatic coins and bullion to coin and metal dealers, investors and collectors. Through its Transcontinental Depository Services subsidiary, it offers a variety of managed storage options for precious metals products to financial institutions, dealers, investors and collectors around the world. Through its A-M Global Logistics subsidiary, the company provides its customers an array of complementary services, including storage, shipping, handling, receiving, processing, and inventorying of precious metals and custom coins on a secure basis.

CONTACT: Company Contact:
Thor Gjerdrum, President
A-Mark Precious Metals, Inc.
310-587-1414
thor@amark.com 

Investor Relations Contact:
Matt Glover or Najim Mostamand
Liolios Group, Inc.
949-574-3860
AMRK@liolios.com

A-Mark Precious Metals Maintains $0.07 per Share Quarterly Dividend

SANTA MONICA, Calif., Sept. 09, 2016 (GLOBE NEWSWIRE) — The board of directors of A-Mark Precious Metals, Inc. (NASDAQ:AMRK), a full-service precious metals trading company and an official distributor for all the major sovereign mints, has maintained the company’s regular quarterly cash dividend of $0.07 per share. The cash dividend will be paid on or about October 7, 2016 to all stockholders of record as of September 19, 2016.

About A-Mark Precious Metals
A-Mark Precious Metals, Inc. is a full-service precious metals trading company and an official distributor for many government mints throughout the world. The company offers gold, silver, platinum and palladium in the form of bars, plates, powder, wafers, grain, ingots and coins. Its Industrial unit services manufacturers and fabricators of products utilizing or incorporating precious metals, while its Coin & Bar unit deals in over 200 coin and bar products in a variety of weights, shapes and sizes for distribution to dealers and other qualified purchasers. The company operates trading centers in Santa Monica, California, and Vienna, Austria, for buying and selling precious metals.

In addition to wholesale and trading activity, A-Mark offers customers a variety of services, including financing, consignment and various customized financial programs. As a U.S. Mint-authorized purchaser of gold, silver and platinum coins, A-Mark purchases bullion products directly from the U.S. Mint for sale to customers. A-Mark also has distributorships with other sovereign mints, including in Australia, Austria, Canada, China, Mexico and South Africa. Customers of A Mark include mints, manufacturers and fabricators, refiners, coin and metal dealers, banks and other financial institutions, jewelers, investors and collectors. For more information about A-Mark Precious Metals, visit www.amark.com.

Through its subsidiary Collateral Finance Corporation, a licensed California Finance Lender, the company offers loans collateralized by numismatic and semi-numismatic coins and bullion to coin and metal dealers, investors and collectors. Through its Transcontinental Depository Services subsidiary, it offers a variety of managed storage options for precious metals products to financial institutions, dealers, investors and collectors around the world. Through its A-M Global Logistics subsidiary, the company provides its customers an array of complementary services, including storage, shipping, handling, receiving, processing, and inventorying of precious metals and custom coins on a secure basis.

CONTACT: Company Contact:
Thor Gjerdrum, President
A-Mark Precious Metals, Inc.
310-587-1414
thor@amark.com

Investor Relations Contact:
Matt Glover 
Liolios
949-574-3860
AMRK@liolios.com


A-Mark Precious Metals Enters Into New Employment Agreement with Thor Gjerdrum

SANTA MONICA, Calif., Sept. 08, 2016 (GLOBE NEWSWIRE) — A-Mark Precious Metals, Inc. (NASDAQ:AMRK), a full-service precious metals trading company and an official distributor for all the major sovereign mints, has entered into a new three-year employment agreement with Thor Gjerdrum. As part of the agreement, Gjerdrum was promoted to the position of president, succeeding David Madge who was appointed to the new position of chief marketing officer.

Gjerdrum has served as A-Mark’s EVP and COO since 2013, and as CFO from 2010 to 2013. Previously, Gjerdrum held a range of positions with two publicly traded telecommunications companies, including vice president of finance. Gjerdrum received a Bachelor of Science degree in accounting from Santa Clara University.

“We look forward to further benefiting from Thor’s proven financial and operational acumen, as well as deep understanding of our business and industry as our new president,” said company CEO, Greg Roberts. “These qualities will prove to be instrumental in helping us scale the company.”

A-Mark also appointed David Madge to the new position of CMO. Madge will be responsible for expanding the company’s marketing platform across its various business units, as well as marketing the company’s expanding portfolio of value-added products.

Prior to the position of CMO, Madge served as President of A-Mark since 2011. Previously, Madge held various positions with the Royal Canadian Mint (RCM), a Commercial Crown Corporation of the Government of Canada, since 1995, most recently serving as executive director of the Bullion and Refinery Business Services. Madge received a Bachelor of Science degree in 1983 and a Bachelor of Arts degree in 1987, each from the University of Waterloo (Ontario, Canada).

“David is considered a pioneer in the custom coin business,” commented Roberts. “He established A-Mark’s value-added products segment a couple of years ago and has grown it to more than 40 products in the market today. As our new CMO, we believe David’s industry knowledge and thought leadership will help expand the A-Mark brand not only domestically but also internationally.”

About A-Mark Precious Metals
A-Mark Precious Metals, Inc. is a full-service precious metals trading company and an official distributor for many government mints throughout the world. The company offers gold, silver, platinum and palladium in the form of bars, plates, powder, wafers, grain, ingots and coins. Its Industrial unit services manufacturers and fabricators of products utilizing or incorporating precious metals, while its Coin & Bar unit deals in over 200 coin and bar products in a variety of weights, shapes and sizes for distribution to dealers and other qualified purchasers. The company operates trading centers in Santa Monica, California, and Vienna, Austria, for buying and selling precious metals.

In addition to wholesale and trading activity, A-Mark offers customers a variety of services, including financing, consignment and various customized financial programs. As a U.S. Mint-authorized purchaser of gold, silver and platinum coins, A-Mark purchases bullion products directly from the U.S. Mint for sale to customers. A-Mark also has distributorships with other sovereign mints, including in Australia, Austria, Canada, China, Mexico and South Africa. Customers of A Mark include mints, manufacturers and fabricators, refiners, coin and metal dealers, banks and other financial institutions, jewelers, investors and collectors. For more information about A-Mark Precious Metals, visit www.amark.com.

Through its subsidiary Collateral Finance Corporation, a licensed California Finance Lender, the company offers loans collateralized by numismatic and semi-numismatic coins and bullion to coin and metal dealers, investors and collectors. Through its Transcontinental Depository Services subsidiary, it offers a variety of managed storage options for precious metals products to financial institutions, dealers, investors and collectors around the world. Through its A-M Global Logistics subsidiary, the company provides its customers an array of complementary services, including storage, shipping, handling, receiving, processing, and inventorying of precious metals and custom coins on a secure basis.

CONTACT: Company Contact:
Thor Gjerdrum, President
A-Mark Precious Metals, Inc.
310-587-1414
thor@amark.com

Investor Relations Contact:
Matt Glover or Najim Mostamand
Liolios
949-574-3860
AMRK@liolios.com


A-Mark Precious Metals Acquires Majority Stake in SilverTowne Mint

SANTA MONICA, Calif., Aug. 31, 2016 (GLOBE NEWSWIRE) — A-Mark Precious Metals, Inc. (NASDAQ:AMRK), a full-service precious metals trading company and an official distributor for all the major sovereign mints, has acquired a majority ownership stake in Indiana-based SilverTowne Mint and entered into an exclusive supplier agreement with Asahi Refining USA Inc. a subsidiary of Asahi Holdings (TSE: 5857), a global refiner and producer of precious metals.

Founded in 1973 in Indiana, SilverTowne Mint is a leading producer of fabricated silver products. Over the last 12 months, the company has produced approximately 12.5 million ounces of silver, and has the capacity to produce up to 20.0 million ounces annually.

Under the terms of the agreement, Asahi Holdings, which refines in excess of 75 million ounces of silver annually, will act as the exclusive supplier of LBMA-approved silver feedstock to SilverTowne Mint. The arrangement will provide SilverTowne Mint with a consistent supply of silver feedstock, enabling the mint to produce significantly more fabricated bullion annually, which A-Mark will then distribute exclusively throughout Asia, Europe and North America.

A-Mark’s many customers are familiar with the SilverTowne brand. With this new stake, it is anticipated that A-Mark will increase its purchases of fabricated silver products from SilverTowne Mint as well as providing SilverTowne customers with A-Mark’s full range of products and services.

SilverTowne Mint designs and produces more than 25 different fabricated silver bullion products and more than 300 different seasonal and topical specialty products. A-Mark intends to leverage SilverTowne Mint’s longstanding fabrication capabilities and extensive coin die portfolio to expand its custom coin programs, as well as introducing innovative, new custom products for individual customers.

SilverTowne’s current management team will continue to be involved in the newly acquired SilverTowne Mint under the new ownership structure. David Hendrickson, who has served as President of SilverTowne since 2010 and guided the company’s growth during an ever increasing competitive environment, will also serve as chief relationship officer of SilverTowne Mint to support the management team and growth of the new joint venture. Jamie Meadows, who most recently served as Vice President and General Manager of SilverTowne, will assume the role of President of SilverTowne Mint and will continue his role of developing and implementing strategies to grow the mint operations.  Also, Brent McCormick, another former SilverTowne executive who managed day-to-day operations during a period of significant growth, will serve as Vice President of Mint Operations.

“It’s a remarkable opportunity for SilverTowne to join forces with A-Mark,” said Hendrickson. “We are excited to provide our customers with the product selection, and finance and service options that will be available to them through our partnership with A-Mark.  As a family owned and operated business for three generations, I’m proud of what we have accomplished within our industry, but I’m even more excited about the level of service we will be able to provide to our customers as a result of this joint venture with A-Mark.”

Greg Roberts, CEO of A-Mark Precious Metals, commented: “The acquisition of SilverTowne Mint is truly unparalleled in the mint fabrication industry. SilverTowne Mint will be one of the most efficient vertically integrated mints in North America, benefiting from Asahi’s global refining capabilities as part of the strategic supplier agreement and A-Mark’s industry-leading distribution network.

“The acquisition also provides A-Mark with two world-class traders in Rita Graft and Patty Roberts, who have 47 years of combined experience and will join our international trading team. In addition, the numerous operating synergies between A-Mark and SilverTowne will significantly expand our capacity to meet unforeseen surges in demand during volatile market environments, such as the one we experienced last August and September.

“Most importantly, our exclusive distributorship with SilverTowne will enable us to sell a greater amount of silver per year to fulfill the increasing demand of our existing customers and service a broader range of potential customers. This helps us further establish our reputation for being not only one of the leading bullion trading companies, but also a full-service precious metals provider with a complete array of value-added services, including financing, storage, and logistics.”

About SilverTowne Mint
SilverTowne Mint, formerly a division of SilverTowne, L.P., is a manufacturer of silver bars and rounds and other non-precious medals.  Built on the SilverTowne brand, established by its founder, Leon Hendrickson, in 1949, the company produces products that are among the most trusted and highly respected within the industry.  The company operates its minting facility in a rural town in Indiana.

Supplying minted products to wholesale and retail customers, SilverTowne Mint currently offers approximately 25 core silver products, and more than 300 specialty and holiday-themed designs.  While hand-crafting nearly all of its dies in-house, the company also offers custom design silver, non-precious and hand-enameled products ideal for business marketing, awards or commemorative promotions.

In addition to its vast product selection, SilverTowne Mint has an exceptional workforce that has helped to support the growth of the business over the past several decades.  With nearly one-third of its employees with more than 15 years of service at SilverTowne Mint, the company is well-positioned for significant growth and to further meet the capacity demands of the silver bullion industry.  For more information about SilverTowne Mint, please visit www.silvertownemint.com.

SilverTowne will continue to operate its other businesses independently, which include its retail storefront, its e-commerce businesses, and the nation’s longest-running coin television show, The Coin Vault, which it produces and broadcasts live.  For more information about SilverTowne or The Coin Vault, please visit www.silvertowne.com or www.thecoinvault.com.

About A-Mark Precious Metals
A-Mark Precious Metals, Inc. is a full-service precious metals trading company and an official distributor for many government mints throughout the world. The company offers gold, silver, platinum and palladium in the form of bars, plates, powder, wafers, grain, ingots and coins. Its Industrial unit services manufacturers and fabricators of products utilizing or incorporating precious metals, while its Coin & Bar unit deals in over 200 coin and bar products in a variety of weights, shapes and sizes for distribution to dealers and other qualified purchasers. The company operates trading centers in Santa Monica, California, and Vienna, Austria, for buying and selling precious metals.

In addition to wholesale and trading activity, A-Mark offers customers a variety of services, including financing, consignment and various customized financial programs. As a U.S. Mint-authorized purchaser of gold, silver and platinum coins, A-Mark purchases bullion products directly from the U.S. Mint for sale to customers. A-Mark also has distributorships with other sovereign mints, including in Australia, Austria, Canada, China, Mexico and South Africa. Customers of A-Mark include mints, manufacturers and fabricators, refiners, coin and metal dealers, banks and other financial institutions, jewelers, investors and collectors. For more information about A-Mark Precious Metals, visit www.amark.com.

Through its subsidiary Collateral Finance Corporation, a licensed California Finance Lender, the company offers loans collateralized by numismatic and semi-numismatic coins and bullion to coin and metal dealers, investors and collectors. Through its Transcontinental Depository Services subsidiary, it offers a variety of managed storage options for precious metals products to financial institutions, dealers, investors and collectors around the world. Through its A-M Global Logistics subsidiary, the company provides its customers an array of complementary services, including storage, shipping, handling, receiving, processing, and inventorying of precious metals and custom coins on a secure basis.

Important Cautions Regarding Forward-Looking Statements
Statements in this press release that relate to future plans, objectives, expectations, performance, events and the like are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ include the following: the failure to execute our growth strategy as planned; greater than anticipated costs incurred to execute this strategy; changes in the current international political climate which has favorably contributed to demand and volatility in the precious metals markets; increased competition for our higher margin services, which could depress pricing; the failure of our business model to respond to changes in the market environment as anticipated; general risks of doing business in the commodity markets; and other business, economic, financial and governmental risks as described in in the Company’s public filings with the Securities and Exchange Commission.

The words “should,” “believe,” “estimate,” “expect,” “intend,” “anticipate,” “foresee,” “plan” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

CONTACT: A-Mark Company Contact:
Thor Gjerdrum, EVP & COO
A-Mark Precious Metals, Inc.
310-587-1414
thor@amark.com

A-Mark Investor Relations Contact:
Matt Glover 
Liolios
949-574-3860
AMRK@liolios.com

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Excellon Appoints Ben Pullinger as Vice-President Geology

TORONTO, ON–(Marketwired – August 23, 2016) – Excellon Resources Inc. (TSX: EXN) (OTC: EXLLF) (“Excellon” or the “Company”), Mexico’s highest grade silver producer, is pleased to announce the appointment of Ben Pullinger, P.Geo as Vice-President Geology effective in mid-September 2016, taking over from John Sullivan, P.Geo., who is stepping into a consulting role.

“We are tremendously excited to have Mr. Pullinger join the team in the coming weeks,” stated Brendan Cahill, President and Chief Executive Officer. “He brings an exceptional track record of discovery and project advancement using the latest in exploration techniques and has experience in all phases of the mining industry, from grass-roots exploration through to production, including a wealth of capital markets and financing experience. He has a proven ability to identify value in mining assets from early stage exploration through to production. Along with our newly appointed Vice-President Technical Services, Denis Flood, Ben will be integral to our next phase of growth.”

Mr. Cahill continued, “Many thanks to John Sullivan for his tireless work as Vice-President Exploration since 2007. He and the exploration team have been instrumental in increasing the mineral resource at Platosa and making the important skarn-sulphide discovery at Rincon del Caido, which will see additional drilling in the coming months. John has been a trusted colleague during Excellon’s growth and turnaround in recent years.”

Mr. Pullinger brings over 12 years of experience in advancing projects from early stage exploration through to production including marketing, financing, planning and execution. Most recently, he was Vice-President Exploration at Roxgold Inc. where he made a significant contribution towards growing the 55 Zone at the Yaramoko Project in Burkina Faso from a small inferred gold resource into a producing mine, and additionally discovered the high grade QV1 and QV’ gold resources. Mr. Pullinger has extensive international experience in Asia, South America, North America and Africa. He is a Professional Geologist (Ontario) and holds an Honours Degree in Geology from the University of Johannesburg.

About Excellon

Excellon’s 100%-owned La Platosa Mine in Durango is Mexico’s highest grade silver mine, with lead and zinc by-products making it historically one of the lowest cash cost silver mines in the country. The Company is positioning itself to capitalize on undervalued projects by focusing on increasing La Platosa’s silver production and near-term mineable resources.

Additional information on Excellon is 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, and particularly the July 9, 2015 NI 43-101-compliant technical report prepared by Roscoe Postle Associates Inc. with respect to the Platosa Property. 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.

For Further Information, Please Contact:
Excellon Resources Inc.
Brendan Cahill
President & CEO

or

Nisha Hasan
Director, Investor Relations
(416) 364-1130
info@excellonresources.com
www.excellonresources.com

"Did You Know Many Zinc Investors Have Made Over 41.51% In Returns Since January 2016?"

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5 Top TSX Stocks: Arizona Mining Tops the List

The S&P/TSX Composite index (INDEXTSI:OSPTX) was down last week by 0.06 percent to 14,687.46 points.

The exchange dropping was in part due to a rise in the US dollar putting pressure on commodity prices, according to the Globe and Mail.

Still, a number of stocks saw some minor gains over the week.

Companies that were up for the week included:

  • Arizona Mining (TSX:AZ)
  • Marathon Gold (TSX:MOZ)
  • Coro Mining (TSX:COP)
  • NGEx Resources (TSX:NGQ)
  • Paladin Energy (TSX:PDN)

Here’s a look at those companies:

"Did You Know Many Zinc Investors Have Made Over 41.51% In Returns Since January 2016?"

Click here to download a rare INN Report on zinc industry and zinc investing. Your report is 100% FREE. No credit card required.

Arizona Mining

Arizona Mining is currently focused on exploring and developing its 100 percent owned Hermosa Project in Arizona. The Taylor Deposit is a lead-zinc-silver carbonate replacement deposit with a resource of 39.4 million tonnes in the Inferred Mineral Resource.

Last week, the company announced results of further three exploration drill holes at the Taylor deposit, including 24 feet grading 22.4 percent zinc, 24.5 lead, 0.41 percent copper and 13.3 opt silver.

Over a five-day period, Arizona Mining’s shares rose 25.45 percent to reach $2.07.

Marathon Gold

Next on the list is Marathon Gold, who is currently focused on the Valentine Lake property in Newfoundland. Late in the week, the company announced that 1,725,000 share purchase warrants at $0.75 with an expiry of August 21, 2016.

Marathon Gold’s shares increased 14.93 percent to close the week out oat $0.77.

Coro Mining

Coro Mining came in third in last week’s TSXV top five, whose shares rose 5.71 percent to $0.185. The company is a precious metals based company with deposits in Latin America.

Most recent company news was released August 8, wherein Coro Mining provided an update on its copper Marimaca Project located in Chile.

NGEx Resources

NGEx Resources is currently exploring projects in chile and Argentina—the Project Constellation and Filo del Sol—both copper-gold-silver projects. Last week, the company announced the spin-out of its wholly-owned Filo del Sol property into a wholly-owned subsidiary of a Plan Arrangement under the Canada Business Corporation Act.

Last week, shares of NGEx rose 11.48 percent to finish the week off at $1.36.

Paladin Energy

Closing out last week’s TSX list is Paladin Energy, whose shares increased 9.09 percent to $0.18.

The company is a uranium production company with projects in Australia, and two mines in Africa.

Don’t forget to follow us @INN_Resource for real-time news updates.

"Did You Know Many Zinc Investors Have Made Over 41.51% In Returns Since January 2016?"

Click here to download a rare INN Report on zinc industry and zinc investing. Your report is 100% FREE. No credit card required.

Data for 5 Top TSX Stocks articles is retrieved each Friday after market close using The Globe and Mail’s market data filter. Only companies with a market capitalization greater than $50 million prior to the week’s gains are included. Companies within the mining and precious metals sectors are considered.

Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.

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Best Mining Companies to Invest In on the TSXV?

So far, 2016 has been kind to the TSX Venture Exchange (INDEXTSI:JX). The index has increased 58.92 percent year-to-date, which is a rise of 309.74 points to 835.50. 

In data released by the TMX, at the halfway point of the year, the venture was the top performing global index. With that in mind, a number of companies on the TSX Venture 50 have made gains. The list, which is released annually, chooses companies based on market cap growth, share price and trading volume.

For investors, the TSX Venture Exchange is a good place to start when looking to find companies to invest in. Here’s a look at the top 10 best mining companies to invest in according to the list, what they’re up to and how their share price is performing this year.

Pure Energy Minerals (TSXV:PE)

Currently, Pure Energy Minerals is focused on developing its lithium brine project in Nevada. In 2015, the company entered into a conditional deal to supply Tesla Motors (NASDAQ:TSLA) with lithium for its lithium-ion battery gigafactory. On August 9, Pure Energy provided an update on the mini-pilot plant work for lithium recovery process. The release notes that brine pre-treatment testing exceeded the company’s expectations for lithium recovery.

Year-to-date, the company’s shares have increased 57.14 percent to $0.88. Over a one-year period, Pure Energy has risen 131.58 percent overall.

Nemaska Lithium (TSX:NMX)

Nemaska Lithium made the TSX Venture 50 list earlier this year, but has since moved to a listing on the TSX. The company intends to become a lithium hydroxide supplier as well as a lithium carbonate supplier to the lithium battery market. The company is currently focused on its Quebec-based Whabouchi lithium project. In July, the company released an update on the lithium drilling program at its Whabouchi Lithium Project wherein they reported that the drilling was progressing at a faster than expected rate. Up to that point, 22 holes had been drilled, totalling 5,935 meters.

Looking to the company’s share price performance, Nemaska Lithium saw an increase of 181.82 percent to $1.24 From January 1st to July 11th, when it moved to the bigger exchange. Nemaska is currently trading at $1.17 per share on the TSX.

Integra Gold (TSXV:ICG)

Integra Gold is focused on the exploration of its high-grade Lamaque Project in the gold producing district, the “Valley of Gold,” in Quebec. On August 9, the company announced assay results from its fall 2015/winter 2016 drill program on the Lamaque South Gold project, which they report highlight the continuity and resource growth potential at Triangle.

The company’s shares have also had relative success this year, rising 164.71 percent to $0.90, and have steadily risen 239.62 percent over a one-year period.

Arena Minerals (TSXV:AN)

Arena Minerals has a number of properties in  Chile’s copper and gold mining districts and once held two projects under operation: the Atacama Copper Project and Pampas El Penon Project. However, in August, the company announced the closing of a transaction with Rouge Resources for the disposition of the Pampas el Penon gold project.

Although the company has had a busy year, its shares are down 28.57 percent to $0.20. Despite the year-to-date loss, Arena’s shares are still up 11.11 percent over a one-year period.

Elcora Advanced Materials (TSXV:ERA)

Elcora Advanced Materials mines, processes and refines graphite in addition to targeting graphite markets, such as lithium-ion batteries and graphene R&D. The company is currently producing graphite at its Ragedara mine in Sri Lanka and is working towards finalizing mining and processing rights in other locations.

In July, the company announced successful graphite nano-platelet tests.

Unfortunately, like Arena Minerals, the company’s shares are also down this year by 11.59 percent to $0.305. Still, over a one-year period the company has seen an increase of 79.41 percent.

Gold Standard Ventures (TSXV:GSV)

Shares of Gold Standard Ventures have seen a significant increase year-to-date, rising 266.32 percent so far to $3.48. Over one-year, its increase is considerably higher at 596 percent overall.

Gold Standard is an advanced stage gold exploration company with a focus on its Railroad Pinion gold project. This particular project now hosts NI 43-101 compliant near-surface oxide gold resources at the Pinion Deposit and Dark Star deposit. On August 9, Gold Standard reported assay results from the first three step out core holes at its North Dark Star oxide gold deposit on the Railroad-Pinion project.

Canada Carbon (TSXV:CCB)

Canada Carbon holds 100 percent interest in three graphite properties in Quebec: the Miller graphite project, the Asbury graphite project and the Dun Raven graphite mine project. Most recently, the company announced they had achieved almost 100 percent graphite purity for West Block samples following nuclear graphite thermal upgrading.

However, the company’s shares are down 21.13 percent year-to-date to $0.28, but are still up slightly over a one-year period by 9.8 percent.

Viscount Mining (TSXV:VML)

Viscount Mining is a company exploring silver and gold deposits, with a 100 percent interest in the Cherry Creek Project in Nevada and the Silver Cliff project in Colorado.  On August 10, Viscount Mining announced an update on its recently completed Phase 4 soil sampling program that included highly anomalous gold at the Cherry Creek project.

Year-to-date, the company’s shares have increased slightly by 28 percent, however they have steadily risen 166.67 percent over a one-year period.

Roxgold (TSXV:ROG)

Shares of Roxgold have risen comfortably by 130 percent to $1.61 year-to-date, and 123.61 percent over a one-year period.

Roxgold’s key asset is the Yaramoko Gold mine in West Africa, with expectations to reach commercial production by the third quarter in 2016.  In July, the company released its production results for the period ending June 30, 2016, announcing 14,482 ounces of gold poured in the first six weeks of production.

Don’t forget to follow us @INN_Resource for real-time news updates.

Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article. 

Editorial Disclosure: Canada Carbon and Nemaska Lithium are clients of the Investing News Network. This article is not paid-for content. 


**This is an update to an article written in February 2016. Read above for the most recent information.**

2015 was a tough year for the mining space, and while 2016 is shaping up to be at least a little better, many investors are still wondering how to find the best mining companies to invest in.

One place to consider looking is the TSX Venture Exchange’s TSX Venture 50 list. Released annually, it ranks the exchange’s strongest performers across five sectors: cleantech, diversified industries, oil and gas, technology and life sciences and, of course, mining. Companies are chosen based on three equally weighted criteria: market cap growth, share price appreciation and trading volume. According to the exchange, the companies on this year’s list collectively delivered a return of 72 percent in 2015.

For investors trying to find the best mining companies to invest in, these stocks may be a good place to start. Read on to learn which mining companies made it onto this year’s TSX Venture 50 list, and to get a brief overview of what they’re currently up to.

1. Pure Energy Minerals (TSXV:PE)

Pure Energy Minerals is focused on its Nevada-based Clayton Valley lithium brine project, and is best known for its conditional deal to supply Tesla Motors (NASDAQ:TSLA) with lithium for its lithium-ion battery gigafactory. Aside from joint venture partners Bacanora Minerals (TSXV:BCN,LSE:BCN) and Rare Earth Minerals (LSE:REM), Pure Energy is the only lithium company to have secured such an agreement.

The company signed its deal with Tesla in September 2015, and since then has continued to work hard at Clayton Valley. Most recently, it completed the fifth well at the project, exceeding the target depth.

2. Nemaska Lithium (TSXV:NMX)

As its name suggests, Nemaska Lithium is also a lithium company. And like Pure Energy, Nemaska has its sights set on the lithium-ion battery market. It’s currently developing its Quebec-based Whabouchi lithium project, and ultimately plans to produce spodumene concentrate there, then transform that material into high-purity lithium hydroxide and lithium carbonate that it can sell to lithium-ion battery producers.

Earlier this month, the company released an update on the construction of its Phase 1 lithium hydroxide plant. Construction is expected to start this quarter and finish in Q4 2016; the plant is slated to produce 500 tonnes per year of high-purity lithium hydroxide.

3. NexGen Energy (TSXV:NXE)

Uranium exploration and development company NexGen Energy has a portfolio of projects across Saskatchewan’s Athabasca Basin. Its key focus is the Arrow zone, located at its Rook 1 project. Rook 1 also hosts the Bow discovery, which is 3.7 kilometers northeast of Arrow.

NexGen completed a lot of work at Arrow in 2014 and 2015, and so far has kept it up into 2016. Its most recent results from the zone came this week — the company reported that it’s extended Arrow’s strike length to 670 meters. Earlier in February, NexGen drilled its most intense mineralization to date at Arrow.

4. Integra Gold (TSXV:ICG)

Integra Gold’s main asset is its Quebec-based Lamaque South project, which has two primary targets: the Parallel zone and the Triangle zone. In addition to Lamaque South, the company holds the fully permitted Sigma mill and tailings facility, located just 1 kilometer from Parallel and 3 kilometers from Triangle. At the moment, Integra is in the midst of releasing assay results from fall 2015/winter 2016 drilling at Triangle.

5. Arena Minerals (TSXV:AN)

Arena Minerals describes itself as a prospect generator, and at the moment it has two properties under option in Chile. Its flagship project is the Atacama copper project, and its other project is Pampas El Penon. Commenting on Arena’s inclusion on this year’s TSX Venture 50 list, President and CEO William Randall said that among other things, the company’s 2015 achievements include signing three joint venture agreements.

6. Elcora Advanced Materials (TSXV:ERA)

Elcora Advanced Materials, formerly Elcora Resources, is looking to become a vertically integrated graphite and graphene company that mines, processes and refines graphite, and produces both graphene and applications for graphene. The company is currently producing graphite at the Ragedara mine in Sri Lanka, and recently completed its processing facility.

In recent weeks, Elcora has begun construction of its graphene production facility, and, along with its joint venture partner Sakura Graphite, has entered into a 10-year exclusive distribution agreement with Thyssenkrupp Metallurgical Products.

7. Gold Standard Ventures (TSXV:GSV,NYSEMKT:GSV)

Advanced-stage gold exploration company Gold Standard Ventures is focused on district-scale discoveries at the Railroad-Pinion gold project, located in the Nevada-based Carlin Trend. According to the company, Railroad-Pinion is adjacent to Newmont Mining’s (NYSE:NEM) Rain and Emigrant mines, and “encompasses a unique target-rich district which still remains predominantly untested.”

This week, Gold Standard announced 2016 exploration plans for Railroad-Pinion, commenting that a US$13.4-million exploration program is in the works. It will cover about 43,000 meters across 100 holes, with the majority of work being completed at the Dark Star and Pinion oxide gold deposits.

8. Canada Carbon (TSXV:CCB)

Canada Carbon is a graphite exploration company whose current focus is its Quebec-based Miller hydrothermal lump/vein graphite project. The graphite at the project is very high in carbon content, and requires only limited upgrading to reach carbon purity levels of 99 percent and above. As the company has explained, a key benefit of having very high-purity graphite is that “there are numerous potential applications because the product is lower cost than synthetic graphite.”

In December, the company said a preliminary economic assessment for Miller is in the works, among other things.

9. Viscount Mining (TSXV:VML)

Like Arena Minerals, Viscount Mining bills itself as a prospect generator, though instead of Chile it’s looking to build a portfolio of high-quality exploration projects in the US. Its flagship project is the Nevada-based Cherry Creek project, which is made up of over 400 unpatented and patented claims, as well as mill rights. It also holds the Silver Cliff project, which consists of 96 lode claims.

The company has been fairly quiet so far in 2016, but did announce assay results from Phase 1 drilling at Cherry Creek earlier this month. According to the company, “[m]oderate to high grade silver mineralization was intercepted in many of the holes.” Work at Cherry Creek is being conducted by Summit Mining Exploration, a subsidiary of Sumitomo (TSE:8053).

10. Roxgold (TSXV:ROG)

Roxgold is a gold exploration and development company whose key asset is the Burkina Faso-based Yaramoko gold project. The company is advancing the 55 zone at the project through construction and expects to start production there in Q2 2016. Roxgold’s most recent news came earlier this month, when it announced a $20-million bought-deal financing.

**This is an update to an article written in February 2016. Read above for the most recent information.**

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Editorial Disclosure: Canada Carbon and Nemaska Lithium are clients of the Investing News Network. This article is not paid-for content. 

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2015 TSX Venture 50: Gold Companies Dominate

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Ivanhoe Mines Announces Financial Results and Review of Operations for the Second Quarter of 2016

TORONTO, ONTARIO–(Marketwired – Aug. 12, 2016) - Ivanhoe Mines (TSX:IVN) today announced its financial results for the second quarter ended June 30, 2016. All figures are in US dollars unless otherwise stated.

HIGHLIGHTS

On August 11, 2016, Ivanhoe Mines announced what could prove to be Africa’s most significant copper discovery at Kakula, on the Kamoa Copper Project, in the Democratic Republic of Congo (DRC). The massive, flat-lying, shallow, chalcocite-rich core of the Kakula Discovery zone now has been expanded to more than three kilometres in length – and still remains open in both directions.
Based on the game-changing drill results received to date, Ivanhoe believes that Kakula’s copper discovery is substantially richer, thicker and more consistent than other known mineralization elsewhere on the Kamoa Project. The primary objective of the current drilling program at Kakula, which is using seven rigs, is to expand the thick, flat-lying, bottom-loaded zone of very high-grade, stratabound copper mineralization at the southern part of the discovery area that has the potential to be amenable to bulk, mechanized mining and to have a significant, positive impact on the Kamoa Project’s future development plans.
Ivanhoe expects to receive an initial, independent Mineral Resource estimate for the Kakula Discovery around the end of Q3 2016. Upon receipt of the resource estimate, the Kamoa technical team plans to begin work on a preliminary economic assessment for Kakula.
Underground mine development at Kamoa’s planned initial mining area at Kansoko Sud is progressing ahead of plan and within budgeted costs. The twin declines, incorporating both a service and a conveyor tunnel, each have advanced more than 130 metres since the first excavation blast was conducted in May of this year. Development of the underground mine is designed to reach the high-grade copper mineralization at the Kansoko Sud deposit during the first quarter of 2017.
Initial metallurgical test results received in July 2016 from a sample of drill core from exploration drilling in the Kakula Discovery zone achieved copper recoveries of 86% and produced a copper concentrate with an extremely high grade of 53% copper. The results also indicate that material from Kamoa’s Kakula and Kansoko zones could be processed through the same concentrator plant, which would yield significant operational and economic efficiencies.
Earlier metallurgical testwork indicated that the Kamoa concentrates contain extremely low arsenic levels, by world standards – approximately 0.02%. Given this critical competitive marketing advantage, Kamoa’s concentrates are expected to attract a significant premium from copper-concentrate traders for use in blending with concentrates from other mines. The Kamoa concentrates will help to enable the other concentrates to meet the limit of 0.5% arsenic imposed by Chinese smelters to meet China’s new environmental restrictions.
Constructive and cordial negotiations are continuing between Ivanhoe Mines, its Kamoa joint-venture partner Zijin Mining Group Co., Ltd. and senior DRC government officials to complete the transfer to the DRC government of an additional 15% interest in the Kamoa Project, on terms to be negotiated. Ivanhoe expects a mutually beneficial agreement to be achieved in the near future that will provide long-lasting, positive benefits to the DRC government and the Congolese people.
On July 8, 2016, Ivanhoe received the second installment of $41.2 million owing from a Zijin Mining subsidiary as part of a strategic co-development agreement under which Zijin acquired 49.5% of Ivanhoe’s majority stake in the Kamoa copper discovery. Zijin agreed to pay $412 million for a 49.5% interest in Ivanhoe subsidiary Kamoa Holding Limited that presently owns 95% of the Kamoa Project.
Also in the DRC, on May 2, 2016, Ivanhoe Mines announced a positive preliminary economic assessment (PEA) for the redevelopment of the Kipushi zinc-copper-germanium-lead-silver mine. The PEA plan covers the redevelopment of Kipushi as an underground mine, producing an annual average of 530,000 tonnes of zinc concentrate over a 10-year mine life at a total cash cost, including copper by-product credits, of approximately $0.54 per pound of zinc. Successful planned restoration of production would make Kipushi the world’s highest grade, major zinc mine. A pre-feasibility study is underway that will further refine the optimal development scenario for the existing underground mine.
On May 11, 2016, Ivanhoe Mines announced a 58% increase in Indicated Mineral Resources tonnage and a 21% increase in the Inferred Mineral Resources tonnage at its Platreef platinum-group metals (PGM), nickel, copper and gold project in South Africa. The new resource estimate is further confirmation of Ivanhoe’s belief that the deposit will be a model for safe, mechanized, underground platinum mining in South Africa.
Platreef’s Indicated Resources now contain an estimated 42.0 million ounces of PGM plus gold, with an additional 52.8 million ounces in Inferred Resources, at the base-case cut-off grade of 2.0 grams per tonne (g/t) 3PE (platinum, palladium and rhodium) plus gold.
At a lower cut-off grade of 1.0 g/t 3PE+gold, Platreef’s Indicated Resources now contain an estimated 58.8 million ounces of PGM plus gold, with an additional 94.3 million ounces in Inferred Resources.
Platreef’s Shaft 1, which entered its permanent sinking phase last month, now has reached a depth of more than 70 metres below surface and is expected to reach the Flatreef Deposit at a depth of 777 metres below surface during the third quarter of 2017. Shaft 1 will provide early development access into the deposit and will be utilized to fast track production during the first phase of the project. Ivanhoe expects to start Shaft 2 early works in 2017, including civil work for the box cut and hitch foundation.
Ivanhoe has made good progress on advancing the feasibility study for the first phase of development at Platreef. The study, which began in August 2015 and is being managed by DRA Global, is expected to be completed in early 2017.
Ivanhoe Mines’ three projects achieved a combined 10.87 million hours of lost-time-injury-free (LTIF) work by the end of the second quarter of 2016. Ivanhoe had recorded 1.27 million LTIF hours at Platreef, 4.42 million hours at Kipushi and 5.18 million hours at Kamoa to the end of Q2 2016.

Principal projects and review of activities

1. Platreef Project

64%-owned by Ivanhoe Mines

South Africa

The Platreef Project is owned by Ivanplats (Pty) Ltd, which is 64%-owned by Ivanhoe Mines. A 26% interest is held by Ivanplats’ historically-disadvantaged broad-based, black economic empowerment (B-BBEE) partners, which include 20 local host communities with a total of approximately 150,000 people, project employees and local entrepreneurs. Ivanplats reconfirmed its Level 3 status in its second verification assessment on a B-BBEE scorecard. A Japanese consortium of ITOCHU Corporation and its affiliate, ITC Platinum, plus Japan Oil, Gas and Metals National Corporation and JGC Corporation, owns a 10% interest in Ivanplats, which it acquired in two tranches for a total investment of $290 million.

The Platreef Project hosts an underground deposit of thick, platinum-group metals, nickel, copper and gold mineralization in the Northern Limb of the Bushveld Igneous Complex, approximately 280 kilometres northeast of Johannesburg and eight kilometres from the town of Mokopane in Limpopo Province. Since 2007, Ivanhoe has focused its exploration activities on defining and advancing the down-dip extension of its original Platreef discovery, now known as the Flatreef Deposit, which is amenable to highly mechanized, underground mining methods. The Flatreef area lies entirely on the Turfspruit and Macalacaskop properties, which form part of the company’s mining right.

Updated estimates result in substantial increases in Indicated and Inferred Mineral Resources at Platreef

On May 11, 2016, Ivanhoe Mines announced a substantial increase in Indicated and Inferred Mineral Resources at the Platreef Project. The updated Mineral Resource estimate, which included updated UMT_TCU Mineral Resources, Bikkuri Mineral Resources and the Mineral Resources in the immediate footwall of the TCU, was prepared by Ivanhoe Mines under the direction of Dr. Harry Parker, RM SME, of Amec Foster Wheeler E&C Services Inc. Dr. Parker and Timothy Kuhl, RM SME, also of Amec Foster Wheeler, have independently confirmed the Mineral Resource estimate and are the Qualified Persons for the estimate, which has an effective date of April 22, 2016.

The Flatreef Mineral Resource, with a strike length of 6.5 kilometres, lies predominantly within a flat-to-gently-dipping portion of the Platreef mineralized belt at relatively shallow depths of approximately 500 metres to 1,350 metres below the surface. The Flatreef Deposit is characterized by its very large vertical thicknesses of high-grade mineralization and a platinum-to-palladium ratio of approximately 1:1, which is significantly higher than other recent PGM discoveries on the Bushveld’s Northern Limb.

The Platreef Indicated Mineral Resources for all mineralized zones are 346 million tonnes at a grade of 3.77 g/t 3PE+gold (1.68 g/t platinum, 1.70 g/t palladium, 0.11 g/t rhodium, 0.28 g/t gold), 0.32% nickel and 0.16% copper at a 2.0 g/t 3PE+gold cut-off. The average thickness of the 2.0 g/t 3PE+gold grade shell used to constrain the T2MZ resources for the indicated area is 19 metres.

Inferred mineral resources for all mineralized zones are 506 million tonnes at a grade of 3.24 g/t 3PE+gold (1.42 g/t platinum, 1.46 g/t palladium, 0.10 g/t rhodium, 0.26 g/t gold), 0.31% nickel and 0.16% copper. The average thickness of the 2.0 g/t 3PE+gold grade shell used to constrain the T2MZ resources for the inferred area is 12.7 metres.

Figure 1. Mineralization at the Platreef Project is open to expansion to the south and west, beyond the area of the current Indicated Mineral Resources, shown in green, and the Inferred Mineral Resources, shown in blue: http://media3.marketwire.com/docs/1065830-F1.pdf

Health and safety at Platreef

The Platreef Project reached a total of 5,903,038 million hours in terms of the Mines Health and Safety Act and the Occupational Health and Safety Act by the end of June 2016. The project recorded 1,266,480 lost-time-injury-free hours at Platreef up until the end of Q2 2016. The Platreef Project continues to strive toward its workplace objective of an environment that causes zero harm to any employees, contractors, sub-contractors or consultants.

Shaft 1 construction

Shaft 1, with an internal diameter of 7.25 metres, will provide initial access to the ore body and will enable the initial underground capital development to take place while Shaft 2 (the main production shaft) is being developed. Following the successful commissioning and licencing of the stage and kibble winders and ancillary equipment, the permanent sinking phase started in July 2016. The initial sinking rate is 1.8 metres per day and will continue until sufficient clearance between the shaft bottom and the stage has been created. The main sink is planned to commence at a depth of 107 metres below surface and the advance per day is expected to be increased to 2.7 metres. This phase will continue to a depth of 1,025 metres below surface, which is expected to be reached in early 2018.

Work now is complete on the internal substation, which has a capacity of five million volt-amperes (MVA). Construction is underway on the power transmission lines from Eskom, the South African public electricity utility, which are expected to supply the electrical power to be used for shaft sinking. Back-up generators have been installed to ensure sinking operations continue despite any interruptions in power supply.

The new transmission lines from Eskom also are expected to provide power to an adjacent community near the Platreef Project, which will be a major community benefit. Other on-site work includes the construction of the storm-water drains and ponds.

National Road (N11) intersection construction

Construction began in April of the intersection on the National Road (N11) highway to provide safe and convenient access to the Platreef mine site. The work includes adding extra lanes to the existing roadway, exit and entry ramps, storm-water management and resurfacing of the intersection.

Platreef implementing a phased approach to a large, underground, mechanized mine

Ivanhoe plans to develop the Platreef Mine in phases. The initial annual rate of four million tonnes per annum (Mtpa) is designed to establish an operating platform to support future expansions. This is expected to be followed by a potential doubling of production to 8.0 Mtpa; and then a third expansion phase to a steady-state 12 Mtpa which would establish Platreef among the largest platinum-group-metals mines in the world.

Ivanhoe has made good progress on advancing the feasibility study of the first phase, which began in August 2015. The study is being managed by DRA Global, with specialized sub-consultants including Stantec Consulting, Murray & Roberts Cementation, SRK, Golder Associates and Digby Wells Environmental. There are expected to be opportunities to refine and modify the timing and capacities of subsequent phases of production to suit market conditions during the development and commissioning of the first phase.

Metallurgical testwork and processing

Metallurgical testwork has focused on maximizing the recovery of platinum-group metals and base metals, also while producing an acceptably high-grade concentrate grade for sale to third parties. The three main geo-metallurgical units and composites have produced concentrator grades of approximately 85 to 110 g/t 3PE+gold at good PGE recoveries (86% to 88% 3PE+gold).

Comminution and flotation testwork has demonstrated that the optimum grind size of 80% passing 75 micrometres in one stage of milling is sufficient to achieve recoveries referred to above. This simplifies the circuit and should enable Ivanhoe to optimize the capital and operating cost of the concentrator.

The flow sheet for phase one comprises a four-million-tonne-per-year, three-stage crushing circuit, which will feed into two parallel milling-flotation modules, each with a capacity of two million tonnes per year. Flotation is followed by a four-million-tonne-per-year tailings-handling and concentrate-thickening, filtration and storage circuit.

Planned mining methods to incorporate highly productive, mechanized methods

The selected mining areas in the current mine plan occur at depths ranging from approximately 700 metres to 1,200 metres below the surface. The main access to the Flatreef Deposit and ventilation system is expected to be comprised of four vertical shafts. Shaft 2 will host the main personnel transport cage, material and ore-handling systems, while Shafts 1, 3 and 4 will be utilized for ventilation to the underground workings. Shaft 1, now under development, will be used for initial access to the deposit and early underground development.

The planned mining methods are expected to use highly productive, mechanized methods, including long-hole stoping and drift-and-fill mining. Mined-out areas will be backfilled with a paste mixture that utilizes tailings from the process plant and cement. The ore will be hauled from the stopes to a series of ore passes that will connect to a main haulage level at Shaft 2, from where it will be hoisted to surface for processing.

Shaft 2 is being designed to have an internal diameter of 10 metres and capable of hoisting six million tonnes per year. The headgear design for the six-million-tonne-per-year permanent hoisting facility has been completed by South Africa-based Murray & Roberts Cementation. Ivanhoe expects to start Shaft 2 early works in 2017, including civil work for the box cut and hitch foundation.

Bulk water and electricity supply

The Olifants River Water Resource Development Project (ORWRDP) is designed to deliver water to the Eastern and Northern limbs of South Africa’s Bushveld Igneous Complex. The project consists of the new De Hoop Dam, the raised wall of the Flag Boshielo Dam and related pipeline infrastructure that ultimately is expected to deliver water to Pruissen, southeast of the Northern Limb. The Pruissen Pipeline Project is expected to be developed to deliver water onward from Pruissen to the municipalities, communities and mining projects on the Northern Limb. Ivanhoe is a member of the ORWRDP’s Joint Water Forum. The Minister of Water & Sanitation has directed that the Trans-Caledon Tunnel Authority serve as the implementing agent for the outstanding phases of the ORWRDP scheme, which include the Phase 2B pipeline from Flag Boshielo Dam to Mokopane.

Platreef Project’s water requirement for the first phase of development is projected to peak at approximately 10 million litres per day. This requirement is to be serviced by the scheme. Ivanhoe also is investigating various alternative sources of bulk water, including an allocation of bulk grey-water from the local Mogalakwena municipality.

The Platreef Project’s electricity requirement for a four-million-tonne-per-year underground mine, concentrator and associated infrastructure has been estimated at approximately 100 million volt-amperes. An agreement has been reached with Eskom for the supply of phase-one power. Ivanhoe chose a self-build option for permanent power, enabling Ivanhoe to manage the construction of the distribution lines from Eskom’s Burutho sub-station to the Platreef Mine.

Development of human resources and job skills

Work is progressing well on the further implementation of Ivanhoe’s Social and Labour Plan, to which the company has pledged a total of R160 million ($11 million) during the first five years, until November 2019. The approved plan includes R67 million ($4 million) for the development of job skills among local residents and R88 million ($6 million) for local economic development projects. Additional internal training is ongoing to provide members of the current workforce with opportunities to expand their skills.

2. Kipushi Project

68%-owned by Ivanhoe Mines

Democratic Republic of Congo

The Kipushi copper-zinc-germanium-lead mine, in the Democratic Republic of Congo, is adjacent to the town of Kipushi and approximately 30 kilometres southwest of Lubumbashi. It also is located on the Central African Copperbelt, approximately 250 kilometres southeast of Ivanhoe’s Kamoa Project, and less than one kilometre from the Zambian border. Ivanhoe acquired its 68% interest in the Kipushi Project in November 2011; the balance of 32% is held by the state-owned mining company, La Générale des Carrières et des Mines (Gécamines).

Health, safety and community development at Kipushi

The Kipushi Project achieved a total of 4,418,232 lost-time-injury-free hours (1,423 days) to the end of Q2 2016. Malaria remains the most frequent health concern at Kipushi; in Q2 2016, there was an average of 12 cases each month among employees, but numbers are declining with the dry season.

In an effort to reduce the incidence of malaria in the Kipushi community, a Water Sanitation and Health (WASH) program has been initiated in cooperation with the Territorial Administrator and the local community. The main emphasis of the program’s first phase is cleaning storm drains in the municipality to prevent the accumulation of ponded water, where malarial mosquitos breed.

The Fionet program to combat malaria rolled out 37 Deki Readers, which provide rapid malaria tests, and provided training of operators at medical service providers in the Kipushi Health Zone. The program is expected to expand to a total of 300 Deki Readers in Q3 2016. Results from the initial six months of the program are strongly encouraging, as unnecessary medication is no longer prescribed to approximately half of all patients, who tested negative for malaria.

National Road rehabilitation through the center of Kipushi municipality was completed by MCK under contract to Ivanhoe. As part of a Haut Katanga provincial initiative, the Office of Roads and Drainage, in conjunction with the work completed by Ivanhoe, is completing the tarmac surface on the road.

Project development and infrastructure

The Kipushi Mine, which had been placed on care and maintenance in 1993, flooded in early 2011 due to a lack of pump maintenance over an extended period. At its peak, water reached 851 metres below the surface. A major milestone was reached in December 2013 when Ivanhoe restored access to the mine’s principal haulage level at 1,150 metres below the surface. Since then, crews have been upgrading underground infrastructure to permanently stabilize the water levels.

Since completion of the drilling program, water levels have been lowered to approximately the 1,245-metre-level in Shaft 5. Engineering work has focused on upgrading of Shaft 5 conveyances and infrastructure, cleaning the shaft bottom to facilitate the installation of new hoist ropes, repairs and upgrades to the hoisting infrastructure and cleaning and stripping of the main pump station at the 1,200-metre-level.

Figure 2. Main pump station in Shaft 5 at 1,200-metre-level with installation of Grifo centrifugal pump: http://media3.marketwire.com/docs/1065830-F2.pdf

Preliminary economic assessment announced for the redevelopment of the Kipushi Project

Ivanhoe announced a positive preliminary economic assessment (PEA) for the redevelopment of the Kipushi Project on May 2, 2016. The PEA was prepared in compliance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects. On May 27, 2016, the NI 43-101 Technical Report on the PEA was filed on www.sedar.com and the company’s website.

Highlights of the PEA, prepared by OreWin Pty. Ltd., of Adelaide, Australia, and the MSA Group (Pty) Ltd, of Johannesburg, South Africa, include:

  • After-tax net present value (NPV) at an 8% real discount rate is $533 million.
  • After-tax real internal rate of return (IRR) is 30.9%.
  • After-tax project payback period is 2.2 years.
  • Leveraging existing surface and underground infrastructure significantly lowers the redevelopment capital compared to a greenfield development project, as well as the time required to reinstate production.
  • Life-of-mine average planned zinc concentrate production of 530,000 dry tonnes per annum – with a concentrate grade of 53% zinc – is expected to rank Kipushi, once in production, among the world’s major zinc mines.
  • Life-of-mine average cash cost of $0.54/lb. of zinc is expected to rank Kipushi, once in production, in the bottom quartile of the cash-cost curve for zinc producers globally.

A pre-feasibility study now is underway that will further refine the optimal development scenario for the existing underground mine at Kipushi.

3. Kamoa Project

47%-owned by Ivanhoe Mines

Democratic Republic of Congo

The Kamoa Copper Project, a joint venture between Ivanhoe Mines and Zijin Mining Group Co., Ltd., is a very large, stratiform copper deposit with adjacent prospective exploration areas within the Central African Copperbelt in the Democratic Republic of Congo (DRC), approximately 25 kilometres west of the town of Kolwezi and about 270 kilometres west of Lubumbashi. Ivanhoe sold a 49.5% share interest in Kamoa Holding Limited (Kamoa Holding), the company that presently owns 95% of the Kamoa Project, to Zijin Mining in December 2015 for an aggregate consideration of $412 million. In addition, Ivanhoe sold a 1% share interest in Kamoa Holding to privately-owned Crystal River Global Limited for $8.32 million – which Crystal River will pay through a non-interest-bearing, 10-year promissory note.

A 5%, non-dilutable interest in the Kamoa Project was transferred to the DRC government on September 11, 2012, for no consideration, pursuant to the DRC Mining Code. Ivanhoe also has offered to transfer an additional 15% interest to the DRC government on terms to be negotiated. Constructive and cordial negotiations over the offer are continuing between Ivanhoe Mines, Zijin and senior DRC government officials. Ivanhoe expects a mutually beneficial agreement to be achieved in the near future that will provide long-lasting, positive benefits to the DRC government and the Congolese people.

Subsequent to the sales to Zijin and Crystal River, Ivanhoe owns an effective 47% of the Kamoa Project, which will decrease to an effective 40% should the additional 15% interest be transferred to the DRC government.

Kamoa is the world’s largest, undeveloped, high-grade copper deposit. On February 23, 2016, an updated Mineral Resource estimate was issued for the Kamoa Project, with an effective date of May 5, 2014. Kamoa’s Indicated Mineral Resources total 752 million tonnes grading 2.67% copper and containing 44.3 billion pounds of copper at a 1% copper cut-off grade and an approximate minimum true thickness of three metres. In addition to the Indicated Resources, the updated estimate included Inferred Mineral Resources of 185 million tonnes grading 2.08% copper and containing 8.5 billion pounds of copper, also at a 1.0% copper cut-off grade and an approximate minimum true thickness of three metres.

Kamoa 2016 pre-feasibility study envisages first phase mine production of three million tonnes per year at a grade of 3.86% copper

The Kamoa 2016 pre-feasibility study (PFS), which focuses on the initial phase of development, was filed on March 30, 2016.
Highlights include:

  • Mine production of three million tonnes per annum (Mtpa) at an average grade of 3.86% copper over a 24-year mine life, resulting in annual copper production of approximately 100,000 tonnes.
  • Initial capital cost, including contingency, is $1.2 billion, approximately $200 million lower than estimated in the Kamoa 2013 PEA.
  • Life-of-mine average mine-site cash cost is $0.75/lb. of copper.
  • After-tax NPV at an 8% discount rate of $986 million.
  • After-tax IRR of 17.2% and a payback period of 4.6 years.
  • High-grade copper concentrate with an average grade of 39.2% copper and very low arsenic levels.
  • Improvements to the mining method have the potential to reduce average mine site cash cost during the first phase to $0.61/lb. of copper, and improve the after-tax NPV at an 8% discount rate to $1.182 billion, the IRR to 18.9% and the payback period to 4.3 years.

The Kamoa 2016 PFS identified several areas for further evaluation to optimize the project’s economics, including:

  • The use of controlled convergence room-and-pillar mining, which has been successfully used by KGHM Polska Miedz S.A. at its copper-mining operations in Poland for the past 20 years. Based on detailed analysis by KGHM Cuprum R&D Centre Ltd., this mining method appears to be well suited to the Kamoa Deposit. If implemented, it potentially could provide significant cost savings as there would be no requirement for cemented backfill and ore extraction ratios would increase.
  • Increased production up to 4.0 Mtpa from the proposed initial mining area, with only limited adjustments to the ore-handling and ventilation systems, thereby resulting in a more efficient use of capital.

Ivanhoe and Zijin Mining are working together to define the scope of the feasibility study, taking into account the conclusions and recommendations from the PFS, while critical-path development, such as upgrading of the hydro-electrical facilities at Koni and Mwadingusha, continues to progress.

Health and safety at Kamoa

Health and safety remain key priorities for workers and management alike at the Kamoa Project, where an excellent safety record has been achieved. As of June 30, 2016, a total of 5,183,893 hours had been worked without a lost-time injury.

Exploration activities lead to a substantial expansion of the Kakula Discovery

During Q2 2016, the company began its drilling program at the new Kakula Discovery area. The contractor, Titan Drilling Congo SARL, mobilized to the Kakula site on May 17 and seven rigs now are drilling at Kakula, with two rigs on standby. A total of 30 holes were completed during the quarter, with six in progress, resulting in 11,563 metres of diamond drilling.

As a result of the ongoing success of the Kakula program and the extension along trend of the central, well-mineralized, chalcocite-rich core to the northwest and southeast at relatively shallow depths, the Kakula drilling program has been expanded by an additional 9,000 metres, to a total of 34,000 metres of exploration drilling. As the full scale of the discovery becomes apparent, further expansions to the program will be accelerated.

The 60-square-kilometre Kakula exploration area is approximately 10 kilometres southwest of the Kamoa Project’s planned initial mining area at Kansoko Sud, see Figure 3 below. The primary objective of the current drilling program at Kakula is to confirm and expand a thick, flat-lying, bottom-loaded zone of very high-grade, stratabound copper mineralization at the southern part of the Kakula Discovery area that has the potential to be amenable to bulk, mechanized mining and have a significant, positive impact on the Kamoa Project’s future development plans.

Excellent copper recoveries and concentrate grades confirmed by preliminary metallurgical tests of drill core from Kakula Discovery

In July, initial metallurgical test results from a sample of drill core from ongoing exploration in the Kakula Discovery zone achieved copper recoveries of 86% and produced a copper concentrate with an extremely high grade of 53% copper. The results also indicate that material from Kamoa’s Kakula and Kansoko zones could be processed through the same concentrator plant, which would yield significant operational and economic efficiencies.

Testing of the Kakula sample was conducted at Zijin’s laboratory in China, using the flowsheet developed during the Kamoa PFS. The material tested was a composite of drill holes DD996 and DD998, assaying 4.1% copper. As a comparison, testing of a previous development composite sample from the planned, initial mining deposit at Kamoa’s Kansoko Sud zone and the adjacent Kansoko Centrale zone, assaying 3.61% copper, achieved an 85% recovery and a concentrate grade of 37% copper. The PFS circuit was optimized on this material.

Earlier metallurgical testwork indicated that the Kamoa concentrates contain extremely low arsenic levels, by world standards – approximately 0.02%. Given this critical competitive marketing advantage, Kamoa’s concentrates are expected to attract a significant premium from copper-concentrate traders for use in blending with concentrates from other mines. The Kamoa concentrates will help to enable the other concentrates to meet the limit of 0.5% arsenic imposed by Chinese smelters to meet China’s new environmental restrictions.

Expanded drill program at Kakula Discovery

In June 2016, the company provided an update on the Kakula program, which confirmed the exceptional grades and shallow, flat-lying geometry of the Kakula mineralized zone. Highlights include:

  • DD998 intersected 11.82 metres (true width) of 4.06% copper at a 2.5% copper cut-off, 11.82 metres (true width) of 4.06% copper at a 2% copper cut-off and 13.79 metres (true width) of 3.68% copper at a 1% copper cut-off.
  • DD999 intersected 8.86 metres (true width) of 6.56% copper at a 2.5% copper cut-off, 11.62 metres (true width) of 5.52% copper at a 2% copper cut-off and 13.65 metres (true width) of 4.93% copper at a 1% copper cut-off.
  • DD1002 intersected 6.42 metres (true width) of 5.70% copper at a 2.5% copper cut-off, 14.68 metres (true width) of 3.71% copper at a 2% copper cut-off and 32.55 metres (true width) of 2.49% copper at a 1% copper cut-off.
  • DD1003 intersected 10.23 metres (true width) of 6.18% copper at a 2.5% copper cut-off, 10.23 metres (true width) of 6.18% copper at a 2% copper cut-off and 18.71 metres (true width) of 3.88% copper at a 1% copper cut-off.

Figure 3. Kamoa Project map shows the planned initial mining area at Kansoko Sud and the nearby Kakula exploration and discovery area: http://media3.marketwire.com/docs/1065830-F3.pdf

Additional assays received

Ivanhoe Mines reported highlights of the latest drill results, on August 11, 2016. Significant highlights of these results include:

  • DD1005 intersected 7.36 metres (true width) of 8.11% copper at a 2.5% copper cut-off, 10.13 metres (true width) of 6.52% copper at a 2% copper cut-off and 20.71 metres (true width) of 3.85% copper at a 1% copper cut-off.
  • DD1011 intersected 6.78 metres (true width) of 7.52% copper at a 2.5% copper cut-off, 11.01 metres (true width) of 5.47% copper at a 2% copper cut-off and 15.20 metres (true width) of 4.40% copper at a 1% copper cut-off.
  • DD1012 intersected 7.63 metres (true width) of 7.90% copper at a 2.5% copper cut-off, 13.76 metres (true width) of 5.36% copper at a 2% copper cut-off and 25.17 metres (true width) of 3.59% copper at a 1% copper cut-off.
  • DD1017 intersected 10.31 metres (true width) of 6.92% copper at a 2.5% copper cut-off, 10.31 metres (true width) of 6.92% copper at a 2% copper cut-off and 12.35 metres (true width) of 6.04% copper at a 1% copper cut-off.

Table 1. Assay results received in August 2016 from the Kakula Exploration Program.

1% Copper cut-off 2% Copper cut-off
Drill hole ID From To Length
(m)
True
Width
(m)
Copper
Grade
(%)
From To Length
(m)
True
Width
(m)
Copper
Grade
(%)
DKMC_DD1004 Failed to reach target depth Failed to reach target depth
DKMC_DD1005 369.00 391.50 22.50 20.71 3.85 379.00 390.00 11.00 10.13 6.52
DKMC_DD1006 366.00 402.79 36.79 34.35 1.88 390.00 402.79 12.79 11.94 2.98
DKMC_DD1007 354.00 364.20 10.20 9.52 5.37 356.70 364.20 7.50 7.00 6.91
DKMC_DD1008 325.00 338.26 13.26 13.16 5.82 325.99 338.26 12.27 12.18 6.18
DKMC_DD1009 320.66 335.00 14.34 12.66 4.97 320.66 335.00 14.34 12.66 4.97
DKMC_DD1010 Failed to reach target depth Failed to reach target depth
DKMC_DD1011 412.00 427.81 15.81 15.20 4.40 416.00 427.45 11.45 11.01 5.47
DKMC_DD1012 321.00 347.47 26.47 25.17 3.59 333.00 347.47 14.47 13.76 5.36
DKMC_DD1013 Failed to reach target depth Failed to reach target depth
DKMC_DD1017 349.00 361.50 12.50 12.35 6.04 349.50 359.94 10.44 10.31 6.92
2.5% Copper cut-off 3% Copper cut-off
Drill hole ID From To Length
(m)
True
Width
(m)
Copper
Grade
(%)
From To Length
(m)
True
Width
(m)
Copper
Grade
(%)
DKMC_DD1004 Failed to reach target depth Failed to reach target depth
DKMC_DD1005 382.00 390.00 8.00 7.36 8.11 382.00 390.00 8.00 7.36 8.11
DKMC_DD1006 396.00 400.30 4.30 4.01 4.27 397.00 400.30 3.30 3.08 4.79
DKMC_DD1007 356.70 363.70 7.00 6.54 7.24 358.44 363.70 5.26 4.91 8.78
DKMC_DD1008 326.50 338.26 11.76 11.67 6.34 326.50 337.50 11.00 10.92 6.60
DKMC_DD1009 320.66 334.50 13.84 12.22 5.08 320.66 334.50 13.84 12.22 5.08
DKMC_DD1010 Failed to reach target depth Failed to reach target depth
DKMC_DD1011 420.00 427.05 7.05 6.78 7.52 422.60 426.63 4.03 3.87 11.52
DKMC_DD1012 339.45 347.47 8.02 7.63 7.90 339.45 347.47 8.02 7.63 7.90
DKMC_DD1013 Failed to reach target depth Failed to reach target depth
DKMC_DD1017 349.50 359.94 10.44 10.31 6.92 349.50 359.94 10.44 10.31 6.92

Holes DD1011 and DD1017 are of particular importance, representing substantial step outs to the southeast and northwest, respectively. Both holes intersected significant, bottom-loaded, Kakula-style mineralization and have expanded the high-grade core area of the Kakula target to at least two kilometres in length. The full list of additional results is shown in Table 1.

In addition to the eight new holes for which assays were received, as shown in Table 1, Kamoa has completed an additional 28 holes in the Kakula Discovery area that currently are being processed and for which final assays are pending. Holes pending assays and holes currently in progress also are shown in Figure 4. The consistent nature of Kakula mineralization supports the creation of selective, mineralized zones at cut-offs up to 2.5% and 3.0% copper.

Ivanhoe expects to receive an initial, independent Mineral Resource estimate for the Kakula Discovery around the end of Q3 2016. Upon receipt of the resource estimate, the Kamoa technical team plans to begin work on a preliminary economic assessment for Kakula.

Figure 4: Kakula Discovery Area. Drill-hole location plan for the Kakula Area shows holes completed and in progress, superimposed on 1% composite grade thickness contours: http://media3.marketwire.com/docs/1065830-F4.pdf

Figure 5. Cross-section A-A’ of Kakula Discovery area, showing true thicknesses of drill intercepts at a 2.5% copper cut-off: http://media3.marketwire.com/docs/1065830-F5.pdf

Figure 6. Cross-section B-B’ of Kakula Discovery area, showing true thicknesses of drill intercepts at a 2.5% copper cut-off: http://media3.marketwire.com/docs/1065830-F6.pdf

Mine development

Byrnecut Underground Congo SARL (BUCS) completed the first blast at the twin declines on May 12, 2016, marking the beginning of underground mine development. The twin declines, incorporating both a service and a conveyor tunnel, each have advanced more than 130 metres since. Development of the underground mine is designed to reach the high-grade copper mineralization at the Kansoko Sud deposit during the first quarter of 2017. The development is ahead of schedule and within budgeted costs.

Kamoa and contractor teams are working closely and effectively to focus efforts and equipment on the necessary critical activities. The steel sets required for roof support were installed in each decline in June 2016 and ventilation fans were installed recently.

In parallel with the Kamoa 2016 PFS, an alternative mining method - controlled convergence room-and-pillar mining, developed by Poland-based KGHM - was investigated for its suitability for use on the Kamoa Kansoko deposits. Given the thick, mineralized widths encountered to date in the Kakula drilling program, controlled-convergence room-and-pillar mining also will be investigated for its suitability for use at Kakula.

To help advance the ongoing exploration and delineation of the Kakula deposit, the Kamoa team is proceeding with the engineering and preparation of tender documents for the construction of a box cut at Kakula to accommodate decline ramps that will provide underground access to the deposit.

Four of six mine dewatering boreholes have been completed along the decline and flow testing has commenced. The project team at Kamoa has completed the construction of site offices, a workshop, stores, a vehicle wash-bay, a brake-test ramp and infrastructure for temporary supply of power and water. Upgrading of the contractor camp to meet the rising demand for accommodation is progressing well.

Figure 7. Conveyor decline sets: http://media3.marketwire.com/docs/1065830-F7.pdf

Figure 8. Kamoa declines with recently installed ventilation: http://media3.marketwire.com/docs/1065830-F8.pdf

Figure 9. Aerial view of Kamoa mine site: http://media3.marketwire.com/docs/1065830-F9.pdf

Construction power

A two-megawatt (MW) Sumec generator and a 1.5-MW Caterpillar generator are being rented and provide power for decline development activities until Kamoa receives grid power from the DRC’s state-owned power company, La Société Nationale d’Electricité (SNEL), scheduled in early October 2016 – after which the generators are expected to be used only for back-up power.

Figure 10. Sumec 2-MW generator being commissioned: http://media3.marketwire.com/docs/1065830-F10.pdf

A contract has been awarded to a local company for the supply and construction of eight kilometres of 11 kilovolt (kV) overhead lines, cabling reticulation and five mini-substations for distributing 11 kV power to the mine, camps, offices and de-watering boreholes.

The construction of the 120 kV power line, that branches off from the Kisenge Mine to Kamoa and will supply construction power, is 80% completed and expected to be finished in Q3 2016. Construction power is expected to be available to Kamoa from the electrical grid from October 2016 on the commissioning of the 120/11 kV – 15 MVA mobile substation.

Figure 11. 120 kV power line under construction: http://media3.marketwire.com/docs/1065830-F11.pdf

Hydroelectric power plant upgrading project

The construction power repair work has progressed well during Q2 2016 and the Mwadingusha Unit 1 was recently completed. Unit 1 is going through the required mechanical and electrical commissioning tests prior to being synchronized to the SNEL national electrical grid, which is expected to occur on August 15, 2016.

Selected quarterly financial information

The following table summarizes selected financial information for the prior eight quarters. Ivanhoe had no operating revenue in any financial reporting period and did not declare or pay any dividend or distribution in any financial reporting period.

3 Months ended
June 30,
2016
March 31,
2016
December 31,
2015
September 30,
2015
$’000 $’000 $’000 $’000
Exploration and project expenditure * 8,233 6,917 10,271 8,553
General administrative expenditure * 3,657 3,693 5,833 4,430
Share-based payments 1,312 1,473 2,345 1,655
Gain on partial sale of subsidiary - - (357,671 ) -
Re-measurement to fair value of the interest retained in joint venture - - (376,148 ) -
Finance costs 445 428 1,556 36
Mark-to-market gain on revaluation of warrants - - (429 ) (970 )
Loss (gain) from subsidiary held for partial sale - - 755 (7,958 )
Total comprehensive loss (gain) attributable to:
Owners of the Company 6,568 4,203 (717,213 ) 9,420
Non-controlling interest 3,483 2,897 2,468 3,439
Loss (profit) per share (basic and diluted) 0.01 0.01 (0.92 ) 0.01
3 Months ended
June 30,
2015
March 31,
2015
December 31,
2014
September 30,
2014
$’000 $’000 $’000 $’000
Exploration and project expenditure * 9,009 12,918 21,178 23,388
General administrative expenditure * 1,323 5,859 8,987 8,060
Share-based payments 1,736 1,986 2,245 7,060
Finance costs 48 34 382 377
Mark-to-market gain on revaluation of warrants (1,334 ) (4,212 ) (2,316 ) (12,360 )
Loss from subsidiary held for partial sale 2,675 209 4,813 10,129
Total comprehensive loss attributable to:
Owners of the Company 11,008 15,511 31,649 23,474
Non-controlling interest 3,564 3,498 5,434 15,092
Loss per share (basic and diluted) 0.01 0.02 0.05 0.03
* Prior period amounts have been amended to show the (gains)/losses from subsidiary held for partial sale separately
in order to improve comparability.

Discussion of results of operations

Review of the three months ended June 30, 2016 vs. June 30, 2015

The company’s total comprehensive loss for Q2 2016 of $10.1 million was $4.5 million lower than for the same period in 2015 ($14.6 million). The decrease mainly was due to a $6.9 million increase in finance income, which included mainly interest earned on loans to the Kamoa joint venture that amounted to $3.8 million and deemed income on the purchase price receivable from the partial sale of the Kamoa Project that amounted to $2.9 million.

Exploration and project expenditures for the three months ending June 30, 2016, amounted to $8.2 million and were $0.8 million less than for the same period in 2015 ($9.0 million).

With the focus at the Platreef Project on development and the Kamoa Project being accounted for as a joint venture, $8.0 million of the total $8.2 million exploration and project expenditure related to the Kipushi Project. Expenditure at the Kipushi Project decreased by $0.8 million compared to the same period in 2015.

Review of the six months ended June 30, 2016 vs. June 30, 2015

The company’s total comprehensive loss of $17.2 million for the six months ended June 30, 2016, was $16.4 million lower than for the same period in 2015 ($33.6 million). The decrease mainly was due to a $15.1 million increase in finance income, together with a $6.8 million decrease in exploration and project expenditure.

Finance income for the six months ending June 30, 2016, amounted to $15.8 million, which was $15.1 million more than for the same period in 2015 ($0.7 million). The increase mainly was due to interest earned on loans to the Kamoa joint venture, which amounted to $7.3 million for the six months ending June 30, 2016, together with deemed finance income on the purchase price receivable from the partial sale of the Kamoa Project, which amounted to $7.2 million.

Exploration and project expenditures for the six months ending June 30, 2016, amounted to $15.2 million and were $6.7 million less than for the same period in 2015 ($21.9 million). The $4.1 million retrenchment costs incurred in 2015 relating to the closure of Ivanhoe’s regional exploration company in the DRC were the main reason for the decrease.

With the focus at the Platreef Project on development and the Kamoa Project being accounted for as a joint venture, $14.7 million of the total $15.2 million exploration and project expenditure related to the Kipushi Project. Expenditure at the Kipushi Project decreased by $2.4 million compared to the same period in 2015.

Financial position as at June 30, 2016 vs. December 31, 2015

The company’s total assets decreased by $20.2 million, from $1,022.6 million as at December 31, 2015, to $1,002.4 million as at June 30, 2016. This mainly was due to the company utilizing its cash resources in its operations.

The remaining purchase price receivable due to the company as a result of the sale of 49.5% of Kamoa Holding decreased as the company received $51.9 million from Zijin during the six months ending June 30, 2016. The present value of the remaining consideration receivable, net of transaction costs, was $149.8 million as at June 30, 2016. Ivanhoe received $41.2 million of the remaining consideration receivable subsequent to June 30, 2016 on July 8, 2016 and the next of the three remaining installments is due on October 24, 2016.

The company’s investment in the Kamoa Holding joint venture increased by $6.5 million from $412.0 as at December 31, 2015, to $418.5 million as at June 30, 2016, with the current shareholders funding the operations equivalent to their proportionate shareholding interest. At Kamoa, the focus remained on development, together with an exploration program at the Kakula Discovery.

Property, plant and equipment increased by $19.1 million, with a total of $21.5 million being spent on project development and to acquire other property, plant and equipment, $19.4 million of which was development costs of the Platreef Project.

The company utilized $16.5 million of its cash resources in its operations and earned interest income of $1.3 million on cash balances in the six months ended June 30, 2016; the company’s portion of the Kamoa joint venture cash calls amounted to $7.7 million.

The company’s total liabilities decreased to $38.2 million as at June 30, 2016, from $43.8 million as at December 31, 2015. This mainly was due to the decrease in trade and other payables of $6.1 million.

Liquidity and capital resources

The company had $294.4 million in cash and cash equivalents as at June 30, 2016. Certain of the company’s cash and cash equivalents, having an aggregate value of $36.9 million, are subject to contractual restrictions as to their use and are reserved for the Platreef Project.

As at June 30, 2016, the company had consolidated working capital of approximately $457.8 million, compared to $424.6 million at December 31, 2015. The Platreef Project working capital is restricted and amounted to $36.2 million at June 30, 2016, and $53.2 million at December 31, 2015. Excluding the Platreef Project working capital, the resultant working capital was $421.6 million at June 30, 2016, and $371.4 million at December 31, 2015. The company believes it has sufficient resources to cover its short-term cash requirements. However, the company’s access to financing always is uncertain and there can be no assurance that additional funding will be available to the company in the near future.

On December 8, 2015, Zijin completed its investment in Ivanhoe’s Kamoa Copper Project. Zijin, through a subsidiary company, has acquired a 49.5% interest in Kamoa Holding for a total of $412 million in a series of payments. Ivanhoe received an initial $206 million from Zijin on December 8, 2015, and a further $41.2 million on each of March 23, 2016, and July 8, 2016; the remaining $123.6 million are scheduled to be received in three equal installments, payable every 3.5 months from the previous installment. Upon closing of the transaction, each shareholder is required to fund Kamoa Holding in an amount equivalent to its proportionate shareholding interest.

The company’s main objectives for 2016 at the Platreef Project remain the continuation of the phase one feasibility study and Shaft 1 construction. At Kipushi, the principal objective is the continued upgrading of mining infrastructure, now that the preliminary economic assessment has been successfully completed. At the Kamoa Project, priorities are the continuation of drilling and the construction of the twin declines at Kamoa. The company expects to spend $27 million on further development at the Platreef Project; $16 million at the Kipushi Project; and $11 million on corporate overheads for the remainder of 2016 – as well as its proportionate funding of the Kamoa Project, expected to be $40 million for the remainder of 2016.

This release should be read in conjunction with Ivanhoe Mines’ unaudited, condensed, consolidated interim financial statements for the three and six months ended June 30, 2016, and Management’s Discussion and Analysis (MD&A) report available at www.ivanhoemines.com and at www.sedar.com.

Qualified Person

Disclosures of a scientific or technical nature in this news release have been reviewed and approved by Stephen Torr, who is considered, by virtue of his education, experience and professional association, a Qualified Person under the terms of NI 43-101. Mr. Torr is not considered independent under NI 43-101 as he is the Vice President, Project Geology and Evaluation. Mr. Torr has verified the technical data disclosed in this release.

Ivanhoe has prepared a current independent, NI 43-101-compliant technical report for each of the Platreef Project, the Kipushi Project and the Kamoa Project, which are available under the company’s SEDAR profile at www.sedar.com. These technical reports include relevant information regarding the effective dates and the assumptions, parameters and methods of the mineral resource estimates on the Platreef Project, the Kipushi Project and the Kamoa Project cited in this release, as well as information regarding data verification, exploration procedures and other matters relevant to the scientific and technical disclosure contained in this release in respect of the Platreef Project, Kipushi Project and Kamoa Project.

Forward-looking statements

Certain statements in this release constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws, including without limitation, the timing and results of: (i) statements regarding Shaft 1 providing initial access for early underground development at the Flatreef Deposit and that Shaft 1 will be utilized to fast-track production during the first phase of the project; (ii) statements regarding the sinking of Shaft 1, including at a daily rate of approximately 1.8 metres per day and 2.7 metres per day; statements regarding Shaft 1 reaching the planned, final depth at 1,025 metres below surface in 2018; (iii) statements regarding the timing of the commencement of Shaft 2 development, including early works; (iv) statements regarding the operational and technical capacity of Shaft 1; (v) statements regarding the internal diameter and hoisting capacity of Shaft 2; (vi) statements regarding the company’s plans to develop the Platreef Mine in three phases: an initial annual rate of four million tonnes per annum (Mtpa) to establish an operating platform to support future expansions; followed by a doubling of production to eight Mtpa; and then a third expansion phase to a steady-state 12 Mtpa; (vii) statements regarding the planned underground mining methods of the Platreef Project; (viii) statements regarding peak water use of 10 million litres per day at the Platreef Project and development of the Pruissen Pipeline Project; (ix) statements regarding the Platreef Project’s electricity requirement; (x) statements regarding the de-watering program at the Kipushi Project; (xi) statements regarding the completion of the Kipushi Project Environmental, Social and Health Impact Assessment (ESHIA) baseline study;
(xii) statements regarding the declines having been designed to intersect the high-grade copper mineralization in the Kansoko Sud area; (xiii) statements regarding the primary objective of the current drilling program at Kakula is to confirm and expand a thick, flat-lying, bottom-loaded zone of very high-grade copper mineralization at the southern part of the Kakula Discovery area that has the potential to have a significant, positive impact on the Kamoa Project’s future development plans; (xiv) statements regarding the timing, size and objectives of drilling and other exploration programs for 2016 and future periods; (xv) statements regarding the expectation to have an initial independent Mineral Resource estimate prepared for the Kakula Discovery around the end of Q3 2016; (xvi) statements regarding the completion of installation and repair works at the Mwadingusha power plant; (xvii) statements regarding the implementation of Social and Labour Plan at the Platreef Project; (xviii) statements regarding the planned expansion of the Kakula drilling program to 34,000 metres of drilling; and (xix) statements regarding expected further expenditure in 2016 of $27 million for the further development of the Platreef Project; $16 million at the Kipushi Project; and $11 million on corporate overheads for the remainder of 2016 – as well as its proportionate funding of the Kamoa Project, expected to be $40 million for the remainder of 2016.

Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such statements can be identified by the use of words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict” and other similar terminology, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. These statements reflect the company’s current expectations regarding future events, performance and results and speak only as of the date of this release.

As well, the results of the pre-feasibility study of the Kamoa Project, the pre-feasibility study of the Platreef Project and the preliminary economic assessment of the Kipushi Project constitute forward-looking information, and include future estimates of internal rates of return, net present value, future production, estimates of cash cost, proposed mining plans and methods, mine life estimates, cash flow forecasts, metal recoveries, estimates of capital and operating costs and the size and timing of phased development of the projects. Furthermore, with respect to this specific forward-looking information concerning the development of the Kamoa, Platreef and Kipushi Projects, the company has based its assumptions and analysis on certain factors that are inherently uncertain. Uncertainties include: (i) the adequacy of infrastructure; (ii) geological characteristics; (iii) metallurgical characteristics of the mineralization; (iv) the ability to develop adequate processing capacity; (v) the price of copper, nickel, zinc, platinum, palladium, rhodium and gold; (vi) the availability of equipment and facilities necessary to complete development; (vii) the cost of consumables and mining and processing equipment; (viii) unforeseen technological and engineering problems; (ix) accidents or acts of sabotage or terrorism; (x) currency fluctuations; (xi) changes in regulations; (xii) the compliance by joint venture partners with terms of agreements, (xiii) the availability and productivity of skilled labour; (xiv) the regulation of the mining industry by various governmental agencies; and (xiv) political factors.

This release also contains references to estimates of Mineral Resources and Mineral Reserves. The estimation of Mineral Resources is inherently uncertain and involves subjective judgments about many relevant factors. Estimates of Mineral Reserves provide more certainty but still involve similar subjective judgements. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The accuracy of any such estimates is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation (including estimated future production from the company’s projects, the anticipated tonnages and grades that will be mined and the estimated level of recovery that will be realized), which may prove to be unreliable and depend, to a certain extent, upon the analysis of drilling results and statistical inferences that ultimately may prove to be inaccurate. Mineral Resource or Mineral Reserve estimates may have to be re-estimated based on: (i) fluctuations in copper, nickel, zinc, platinum group elements (PGE), gold or other mineral prices; (ii) results of drilling; (iii) metallurgical testing and other studies; (iv) proposed mining operations, including dilution; (v) the evaluation of mine plans subsequent to the date of any estimates and/or changes in mine plans; (vi) the possible failure to receive required permits, approvals and licenses; and (vii) changes in law or regulation.

Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indicators of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed below and under “Risk Factors”, as well as unexpected changes in laws, rules or regulations, or their enforcement by applicable authorities; the failure of parties to contracts with the company to perform as agreed; social or labour unrest; changes in commodity prices; and the failure of exploration programs or studies to deliver anticipated results or results that would justify and support continued exploration, studies, development or operations.

Although the forward-looking statements contained in this release are based upon what management of the company believes are reasonable assumptions, the company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the company does not assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring after the date of this release.

Ivanhoe Mines – Investors
Bill Trenaman
+1.604.331.9834Ivanhoe Mines – Media
North America:
Bob Williamson
+1.604.512.4856

South Africa:
Jeremy Michaels
+27.82.939.4812
www.ivanhoemines.com

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Stillwater Mining Company Reports Second Quarter 2016 Results

LITTLETON, Colo., July 29, 2016 (GLOBE NEWSWIRE) — Stillwater Mining Company (NYSE:SWC) today reported financial results for the quarter ended June 30, 2016.

Second Quarter 2016 Highlights:

  • Notable safety performance improvement, with a reportable incidence rate decrease of 61.4% compared to the second quarter of 2015, resulting in the lowest quarterly rate on record (earliest statistics available from January 1, 2000)
  • Mined palladium and platinum sales of 150,900 ounces, an increase of 13.5% from 133,000 ounces sold during the second quarter of 2015
  • Costs of metals sold of $501 per PGM mined ounce, down 17.3% from $606 per PGM mined ounce for the second quarter of 2015
  • Mined palladium and platinum production of 137,100 ounces, an increase of 8.0% from 127,000 ounces mined during the second quarter of 2015
  • All-in sustaining costs (AISC)* of $594 per mined ounce of palladium and platinum, down 24.3% from $785 per PGM mined ounce for the second quarter of 2015 and the lowest since 2010
  • Cash and cash equivalents plus highly liquid investments of $442.2 million at quarter end, after funding a $20.5 million increase of recycling working capital and all capital during the second quarter of 2016
  • Processed 169,900 ounces of recycled palladium, platinum and rhodium, an increase of 12.1% over 151,600 ounces recycled during the second quarter of 2015 and is the second highest total on record
  • East Boulder Mine set several new records in the second quarter, including highest monthly tons milled (June), highest monthly ounces per employee (June) and the first half of 2016 was the highest number of ounces produced for any half-year period
  • Accelerated Blitz project on the 56 East development drive, with first production now expected in late 2017 or early 2018
  • Forecasting $155 million to $175 million capital expenditures for the Blitz project to first production
  • Consolidated net income attributable to common stockholders of $0.8 million or $0.01 per diluted share, reflecting the decrease sales price per mined ounce (palladium and platinum) of $665, a 21.0% decrease from $842 realized for the second quarter of 2015

Commenting on the second quarter results, Mick McMullen, the Company’s President and Chief Executive Officer stated, “We are pleased to report not only strong operational performance this quarter, but also a notable 61.4% year-over-year reduction in our total company reportable incident rate, reflecting our team’s diligence in prioritizing safety while delivering improvement across the organization.

“We delivered quarterly costs of metals sold of $501 per PGM mined ounce and AISC* within our new medium-term mid-to-high $500’s target range. Our momentum continued throughout the quarter, with June delivering the highest monthly ounces since April 2015, a significant decrease in costs of metals sold and the lowest AISC* since 2010. We exit the first half of the year on track to exceed several of the original targets set for 2016, and thus today are announcing new guidance for the full-year. Our progress in results and safety represents an important milestone for the Company. I am confident that we now have the culture in place to continue safely increasing production while maintaining cost discipline.

“The Company’s liquidity position remains strong, with cash and cash equivalents plus highly liquid investments of $442.2 million at the end of the second quarter. The increase in purchased material in the recycling business during the second quarter, coupled with increasing metal prices, drove a $20.5 million build in working capital in the PGM Recycling segment. This shift was a significant factor in the overall reduction in cash and equivalents of $10.2 million from the first quarter of 2016. We continue to make solid progress in growing the recycling business, processing 169,900 PGM ounces during the quarter and achieving the second best quarter on record. In addition, we continue to invest in our mines through sustaining capital activities at a development rate above the schedule under our current mine plan.

“Work on the Blitz project continues to progress. Advance rates in the construction of the 56 East development heading, a critical path item for first production, continue to improve. Our focus on accelerating the project timeline has enabled us to bring forward plans for first production, which we now anticipate to occur in late 2017 or early 2018. Project spend on Blitz up to first production is now expected to be in the range of $155 million to $175 million. We anticipate Blitz will provide growth in our production profile and the Company’s lowest cost mined ounces, given the grades shown by the drilling to date, as well as the logistical set up of the Blitz project.

“Even as realized PGM prices saw a significant decline over the prior year period, recent improvements are encouraging. During the first half of 2016, platinum reversed its previous downward trend to reach $999 per ounce at the mid-year mark, and palladium rose from a low of $470 per ounce in the first quarter to $589 per mined ounce at the mid-year mark. At July 28, 2016, platinum traded at $1,143 per ounce and palladium had strengthened to $702 per ounce.

Mr. McMullen concluded, “Overall, our solid second quarter performance and strong momentum in June reflect the diligent focus of our team in continuing to drive costs lower and elevate safety across the organization. The fundamentals of palladium, our primary product, remain strong, and we are confident that our disciplined approach to capital deployment and focus on operational efficiencies position Stillwater to benefit across all stages of the commodity cycle.”

2016 Full-Year Guidance:

Following a review of second quarter 2016 results and forecasts for the remainder of the year, guidance for the full-year 2016 has been updated and is detailed in the table below.

Current 2016 Guidance Previous 2016 Guidance
Sales of Mined Ounces (palladium and platinum) 545,000 – 555,000 n/a
Total Costs of Metals Sold per PGM Mined Ounce(1) $495 – $520 n/a
Mined Production (palladium and platinum ounces) 535,000 – 545,000 515,000 – 535,000
Total Cash Costs per PGM Mined Ounce (net of by-product and recycling credits)* $430 – $455 $445 – $485
All-In Sustaining Costs per PGM Mined Ounce* $595 – $635 $615 – $665
General and Administrative (millions) $30 – $40 $30 – $40
Exploration (millions)(2) $8 – $11 $8 – $11
Sustaining Capital Expenditures (millions) $50 – $60 $50 – $60
Project Capital Expenditures (millions)(3) $40 – $45 $40 – $45
Total Capital Expenditures (millions)(3) $90 – $105 $90 – $105
(1) Total costs of metals sold from mine production divided by PGM mined ounces sold.
(2) Exploration includes expenses for Marathon, Altar and Montana operations.
(3) Excludes project capitalized interest and project capitalized depreciation.


Second Quarter 2016 Results:

For the second quarter of 2016, the Company reported consolidated net income attributable to common stockholders of $0.8 million, or $0.01 per diluted share, compared to consolidated net loss attributable to common stockholders of $27.5 million, or $0.23 per diluted share for the second quarter of 2015. The second quarter was impacted by significantly lower realized metal prices, partially offset by a reduction in unit costs. The second quarter of 2015 included an impairment charge of $46.8 million (before-tax).

PGM Mine Production Comparison:

 

Three Months Ended Six Months Ended
June 30, June 30,
(Produced ounces) 2016 2015 2016 2015
  Palladium 63,600 59,200 125,600 123,700
  Platinum 19,500 17,600 38,400 36,800
Stillwater Mine Total 83,100 76,800 164,000 160,500
  Palladium 41,900 39,100 85,900 77,800
  Platinum 12,100 11,100 24,500 22,000
East Boulder Mine Total 54,000 50,200 110,400 99,800
  Palladium 105,500 98,300 211,500 201,500
  Platinum 31,600 28,700 62,900 58,800
Total 137,100 127,000 274,400 260,300

 

Mine Production revenues (including proceeds from the sale of by-products) totaled $106.4 million in the second quarter of 2016, down from $119.0 million for the second quarter of 2015. The combined average realized price for the sales of mined palladium and platinum decreased for the second quarter of 2016 to $665 per ounce, compared to $842 per ounce realized in the second quarter of 2015. The total quantity of mined palladium and platinum sold in the second quarter of 2016 was 150,900 ounces compared to 133,000 ounces sold in the second quarter of 2015.

Mine Production total costs of metals sold decreased to $75.6 million in the second quarter of 2016 from $80.6 million in the second quarter of 2015.

Recycling Activity Comparison:

 

Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
Average tons of catalyst fed per day 26.4 26.9 24.6 21.5
Tons processed 2,404 2,452 4,452 3,900
  Tons tolled 693 1,255 1,695 1,626
  Tons purchased 1,711 1,197 2,757 2,274
PGM ounces fed 169,900 151,600 324,100 260,300
PGM ounces sold 85,300 68,100 148,700 142,700
PGM tolled ounces returned 70,700 37,400 146,600 77,600

Total recycled PGM ounces fed to the smelter were up 12.1% from the second quarter of 2015 to 169,900 ounces. The recycling business segment experienced a shift from tolled to purchased material in the second quarter of 2016.

PGM Recycling revenues totaled $59.2 million for the 2016 second quarter, a decrease from $66.3 million in the same period of 2015. The Company’s combined average realized price for sales of recycled palladium, platinum and rhodium was $666 per ounce in the second quarter of 2016 compared to $954 per ounce in the second quarter of 2015. Recycling sales volumes for the second quarter of 2016 increased to 85,300 ounces from 68,100 ounces sold in the second quarter of 2015. In conjunction, tolled ounces returned to customers increased to 70,700 ounces for the second quarter of 2016 from 37,400 ounces in the second quarter of 2015. Only the treatment charges for tolled material are included in recycling revenues, hence the decrease in recycling revenues.

PGM Recycling costs of metals sold totaled $56.5 million in the second quarter of 2016, down from the $64.4 million in the second quarter of 2015. A majority of the costs of metals sold from recycling in each period is attributable to the acquisition cost of purchasing recyclable materials for the Company’s own account; therefore, the aggregate costs of metals sold from the PGM Recycling segment is driven mostly by the volume and the value of the PGMs in the materials purchased by the Company.

General and administrative costs were $8.3 million in the second quarter of 2016, a 20.2% decrease from the $10.4 million incurred during the same period of 2015.

Costs of Metals Sold Per PGM Mined Ounce:

Costs of metals sold per PGM mined ounce totaled $501 for the second quarter of 2016, a decrease from $606 recorded for the second quarter of 2015. Cost improvement initiatives at both mines and reduced labor costs contributed to the lower costs of metals sold per mined ounce result.

Three Months Ended Six Months Ended
June 30, June 30,
Costs of Metals Sold Per PGM Mined Ounce
Combined Montana Mining Operations
2016 2015 2016 2015
Costs of metals sold per PGM mined ounce $ 501 $ 606 $ 506 $ 596


All-In Sustaining Costs Per PGM Mined Ounce:

AISC* per PGM mined ounce totaled $594 for the second quarter of 2016, a decrease from $785 recorded for the same period of 2015. Reductions in cash costs and sustaining capital contributed to the lower AISC result.

Three Months Ended Six Months Ended
June 30, June 30,
All-In Sustaining Costs Per PGM Mined Ounce
Combined Montana Mining Operations
2016 2015 2016 2015
Total combined cash costs per PGM mined ounce, net of by-product and recycling credits* $ 420 $ 530 $ 433 $ 533
  PGM Recycling income credit per mined ounce 22 16 17 16
  Corporate general and administrative costs (before DD&A) 56 77 56 68
  Capital outlay to sustain production at the Montana operating mines 96 162 98 156
All-In Sustaining Costs per PGM mined ounce* $ 594 $ 785 $ 604 $ 773


Cash Costs Per PGM Mined Ounce:

Total combined cash costs per PGM mined ounce (net of by-product and recycling credits)* totaled $420 per ounce for the second quarter of 2016, a significant reduction from $530 per ounce for the second quarter of 2015.

The table below illustrates the effect of applying the by-product and PGM Recycling segment credits to the total cash costs per PGM mined ounce for the Montana mining operations.

Three Months Ended Six Months Ended
June 30, June 30,

Combined Montana Mining Operations
2016 2015 2016 2015
Total combined cash costs per PGM mined ounce, before by-product and recycling credits* $ 487 $ 600 $ 491 $ 601
  Less: By-product revenue credit per mined ounce 45 54 41 52
  Less: PGM Recycling income credit per mined ounce 22 16 17 16
Total combined cash costs per PGM mined ounce, net of by-product and recycling credits* $ 420 $ 530 $ 433 $ 533

*These are non-GAAP financial measures. For a full description and reconciliation of these and other non-GAAP financial measures to GAAP financial measures, see Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures and Reconciliation of Total Cash Costs Guidance and AISC Guidance below.

Cash Flow and Liquidity:

At June 30, 2016, the Company’s cash and cash equivalents balance was $130.1 million, compared to $147.3 million at December 31, 2015. The Company’s cash and cash equivalents plus highly liquid investments totaled $442.2 million at June 30, 2016 (including $18.5 million of investments which have been reserved as collateral on letters of credit), compared to $463.8 million at December 31, 2015. Net working capital decreased to $519.2 million at June 30, 2016, compared to $523.0 million at December 31, 2015.

Net cash provided by operating activities (which includes changes in working capital) totaled $16.9 million for the six months ended June 30, 2016, compared to $59.6 million for the same period in 2015. Cash capital expenditures were $38.4 million for the six months ended June 30, 2016, compared to $58.2 million in the same period in 2015.

Outstanding total balance sheet debt reported at June 30, 2016, was approximately $264.3 million, an increase from $255.8 million at December 31, 2015. The Company’s debt balance at June 30, 2016, included approximately $263.8 million of 1.75% convertible debentures (net of unamortized discount of approximately $68.0 million and $3.4 million of deferred debt issuance costs) and $0.5 million of 1.875% convertible debentures. The change in debt balance is a result of the accretion of the discount on the Company’s outstanding 1.75% convertible debentures.

2016 Second Quarter Results Webcast and Conference Call:

Stillwater Mining Company will conduct a conference call to discuss second quarter 2016 results at 12:00 noon Eastern Daylight Time on Friday, July 29, 2016.

Dial-In Numbers:  United States: (877) 407-8037
 International: (201) 689-8037

A simultaneous webcast of the conference call and related presentation materials will be accessible in the Investor Relations section of the Company’s website at: www.stillwatermining.com.

A telephone replay of the call will be available for one week following the event. The replay dial-in numbers are (877) 660-6853 (U.S.) and (201) 612-7415 (International), access code 13631286. The call transcript will be archived in the Investor Relations section of the Company’s website.

About Stillwater Mining Company

Stillwater Mining Company is the only U.S. miner of platinum group metals (PGMs) and the largest primary producer of PGMs outside of South Africa and the Russian Federation. PGMs are rare precious metals used in a wide variety of applications, including automobile catalysts, fuel cells, hydrogen purification, electronics, jewelry, dentistry, medicine and coinage. The Company is engaged in the development, extraction and processing of PGMs from a geological formation in south-central Montana recognized as the J-M Reef. The J-M Reef is the only known significant source of PGMs in the U.S. and the highest-grade PGM resource known in the world. The Company also recycles PGMs from spent catalytic converters and other industrial sources. The Company owns the Marathon PGM-copper deposit in Ontario, Canada, and the Altar porphyry copper-gold deposit located in the San Juan province of Argentina. The Company’s shares are traded on the New York Stock Exchange under the symbol SWC. Information about the Company can be found at its website: www.stillwatermining.com.

Cautionary Note Concerning Forward-Looking Statements

Some statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, and, therefore, involve uncertainties or risks that could cause actual results to differ materially from management’s expectations. These statements may contain words such as “believes,” “anticipates,” “plans,” “expects,” “intends,” “estimates,” “predicts,” “should,” “will,” “may” or similar expressions. Such statements also include, but are not limited to, comments regarding delivering improvement across the organization; exiting the first half of the year on track to exceed several targets originally set for 2016; having the culture in place to continue safely increasing production while maintaining cost discipline; solid progress in growing the recycling business; continuing to invest in the mines through sustaining capital activities at a development rate above the schedule under the current mine plan; advance rates of the 56 East development heading continuing to improve; now anticipating first production from the Blitz project in late 2017 or early 2018; expected spend on the Blitz project to first production of $155 to $175 million; anticipation that the Blitz project will provide production growth and the Company’s lowest cost mined ounces; diligent focus of our team in continuing to drive costs lower and elevate safety across the organization; confidence that our disciplined approach to capital deployment and focus on operational efficiencies position Stillwater to benefit across all stages of the commodity cycle; 2016 estimates for sales of mined ounces, total costs of metals sold per PGM mined ounce, mined production ounces, total cash costs per PGM mined ounce (net of credits), all-in sustaining costs per PGM mined ounce, exploration expense, general and administrative costs and capital expenditures; and the usefulness of non-GAAP financial measures. The forward-looking statements in this release are based on assumptions and analyses made by management in light of experience and perception of historical trends, current conditions, expected future developments, and other factors that are deemed appropriate. These statements are not guarantees of the Company’s future performance and are subject to risks, uncertainties and other important factors that could cause its actual performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Additional information regarding factors that could cause results to differ materially from management’s expectations is found in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on February 22, 2016. The Company intends that the forward-looking statements contained herein be subject to the above-mentioned statutory safe harbors. Investors are cautioned not to rely on forward-looking statements. The forward-looking statements herein speak only as of the date of this release. The Company disclaims any obligation to update forward-looking statements.

 

Stillwater Mining Company
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except per share data) 2016 2015 2016 2015
REVENUES
Mine Production $ 106,395 $ 118,968 $ 192,197 $ 244,706
PGM Recycling 59,188 66,316 106,924 140,998
Other 100 100 200 200
Total revenues 165,683 185,384 299,321 385,904
COSTS AND EXPENSES
Costs of metals sold
Mine Production 75,589 80,631 143,032 160,672
PGM Recycling 56,490 64,441 102,534 137,146
Total costs of metals sold (excludes depletion, depreciation and amortization) 132,079 145,072 245,566 297,818
Depletion, depreciation and amortization
Mine Production 20,517 16,942 37,586 33,811
PGM Recycling 194 256 385 508
Total depletion, depreciation and amortization 20,711 17,198 37,971 34,319
Total costs of revenues 152,790 162,270 283,537 332,137
Exploration 1,587 760 4,435 1,840
General and administrative 8,311 10,396 16,608 18,741
Gain on sale of long-term investment (482 ) (482 )
(Gain) loss on long-term investments (2 ) 53
Impairment of non-producing mineral properties 46,772 46,772
(Gain) loss on disposal of property, plant and equipment (153 ) (154 ) 3
Total costs and expenses 162,053 220,196 303,944 399,546
OPERATING INCOME (LOSS) 3,630 (34,812 ) (4,623 ) (13,642 )
OTHER (EXPENSE) INCOME
Other 44 17 86 901
Interest income 960 724 1,670 1,426
Interest expense (4,067 ) (5,312 ) (8,249 ) (10,616 )
Net foreign currency transaction gain 2 745 1,194 137
INCOME (LOSS) BEFORE INCOME TAX BENEFIT (PROVISION) 569 (38,638 ) (9,922 ) (21,794 )
Income tax benefit (provision) 215 (380 ) 776 5,663
NET INCOME (LOSS) $ 784 $ (39,018 ) $ (9,146 ) $ (16,131 )
Net loss attributable to noncontrolling interest (11,542 ) (11,657 )
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 784 $ (27,476 ) $ (9,146 ) $ (4,474 )
Other comprehensive income, net of tax
Net unrealized gain on investments available-for-sale and deferred compensation 183 47 530 183
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 967 $ (27,429 ) $ (8,616 ) $ (4,291 )
Comprehensive loss attributable to noncontrolling interest (11,542 ) (11,657 )
TOTAL COMPREHENSIVE INCOME (LOSS) $ 967 $ (38,971 ) $ (8,616 ) $ (15,948 )
Weighted average shares of common stock outstanding
Basic 121,074 120,751 121,065 120,637
Diluted 121,380 120,751 121,065 120,637
Basic income (loss) per share attributable to common stockholders $ 0.01 $ (0.23 ) $ (0.08 ) $ (0.04 )
Diluted income (loss) per share attributable to common stockholders $ 0.01 $ (0.23 ) $ (0.08 ) $ (0.04 )


Stillwater Mining Company
Consolidated Balance Sheets
(Unaudited)

June 30, December 31,
(In thousands, except per share data) 2016 2015
ASSETS
Current assets
Cash and cash equivalents $ 130,115 $ 147,336
Investments, at fair value 312,037 316,429
Inventories 113,892 102,072
Trade receivables 890 800
Prepaid expenses 5,660 2,821
Other current assets 25,505 21,628
Total current assets 588,099 591,086
Mineral properties 112,480 112,480
Mine development, net 473,383 460,751
Property, plant and equipment, net 102,337 109,957
Other noncurrent assets 4,932 4,115
Total assets $ 1,281,231 $ 1,278,389
LIABILITIES AND EQUITY
Current liabilities
Accounts payable $ 22,304 $ 18,205
Accrued compensation and benefits 28,195 30,046
Property, production and franchise taxes payable 13,617 13,907
Current portion of long-term debt and capital lease obligations 657
Income taxes payable 373
Other current liabilities 4,369 5,286
Total current liabilities 68,858 68,101
Long-term debt 264,301 255,099
Deferred income taxes 20,310 22,761
Accrued workers compensation 6,479 6,070
Asset retirement obligation 11,159 11,027
Other noncurrent liabilities 7,845 6,102
Total liabilities 378,952 369,160
EQUITY
Stockholders’ equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized; none issued
Common stock, $0.01 par value, 200,000,000 shares authorized; 121,074,473 and 121,049,471 issued and outstanding at June 30, 2016 and December 31, 2015, respectively 1,211 1,210
Paid-in capital 1,100,949 1,099,283
Accumulated deficit (200,213 ) (191,067 )
Accumulated other comprehensive income (loss) 332 (197 )
Total equity 902,279 909,229
Total liabilities and equity $ 1,281,231 $ 1,278,389


Stillwater Mining Company
Consolidated Statements of Cash Flows
(Unaudited)

Six Months Ended
June 30,
(In thousands) 2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (9,146 ) $ (16,131 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depletion, depreciation and amortization 37,971 34,319
Gain on sale of long-term investment (482 )
Loss on long-term investments 53
Impairment of non-producing mineral properties 46,772
Amortization / accretion of investment premium / discount 1,218 975
(Gain) loss on disposal of property, plant and equipment (154 ) 3
Net foreign currency transaction gain (1,194 ) (137 )
Deferred income taxes (1,526 ) (12,592 )
Accretion of asset retirement obligation 421 387
Amortization of deferred debt issuance costs 437 610
Accretion of convertible debenture debt discount 8,765 9,127
Share based compensation and other benefits 1,741 6,913
Non-cash capitalized interest (2,728 ) (1,784 )
Changes in operating assets and liabilities:
Inventories (12,435 ) 630
Trade receivables (90 ) 48
Prepaid expenses (2,839 ) (3,285 )
Accounts payable 2,121 (117 )
Accrued compensation and benefits (1,850 ) (411 )
Property, production and franchise taxes payable 1,454 (6 )
Income taxes payable 373
Accrued workers compensation 409 (352 )
Other operating assets (4,605 ) (3,516 )
Other operating liabilities (1,007 ) (1,907 )
NET CASH PROVIDED BY OPERATING ACTIVITIES 16,854 59,599
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (38,426 ) (58,218 )
Proceeds from sale of long-term investment 851
Proceeds from disposal of property, plant and equipment 154
Purchases of investments (165,742 ) (184,660 )
Proceeds from maturities and sales of investments 169,745 126,849
NET CASH USED IN INVESTING ACTIVITIES (33,418 ) (116,029 )
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on debt and capital lease obligations (658 ) (1,097 )
Proceeds from issuance of common stock 1 49
NET CASH USED IN FINANCING ACTIVITIES (657 ) (1,048 )
CASH AND CASH EQUIVALENTS
Net decrease (17,221 ) (57,478 )
Balance at beginning of period 147,336 280,286
BALANCE AT END OF PERIOD $ 130,115 $ 222,808


Stillwater Mining Company
Key Operating Factors
(Unaudited)

Three Months  Ended Six Months Ended
June 30, June 30,
(In thousands, except where noted) 2016 2015 2016 2015
OPERATING AND COST DATA FOR PGM MINE PRODUCTION
Consolidated:
Ounces produced
Palladium 105.5 98.3 211.5 201.5
Platinum 31.6 28.7 62.9 58.8
Total 137.1 127.0 274.4 260.3
Tons milled 328.0 299.4 641.1 607.2
Mill head grade (ounce per ton) 0.45 0.45 0.46 0.45
Sub-grade tons milled (1) 22.7 27.0 42.7 55.0
Sub-grade tons mill head grade (ounce per ton) 0.14 0.16 0.16 0.16
Total tons milled(1) 350.7 326.4 683.8 662.2
Combined mill head grade (ounce per ton) 0.43 0.42 0.44 0.43
Total mill recovery (%) 92 92 92 92
Total mine concentrate shipped (tons) (3) 8,190 7,566 16,062 16,021
Platinum grade in concentrate (ounce per ton) (3) 4.19 4.02 4.20 3.87
Palladium grade in concentrate (ounce per ton) (3) 13.39 13.43 13.60 12.98
Costs of metals sold per PGM mined ounce $ 501 $ 606 $ 506 $ 596
Total combined cash costs per ounce – net of credits (Non-GAAP) (2) $ 420 $ 530 $ 433 $ 533
Total combined cash costs per ore ton milled – net of credits (Non-GAAP) (2) $ 164 $ 206 $ 174 $ 210
Stillwater Mine:
Ounces produced
Palladium 63.6 59.2 125.6 123.7
Platinum 19.5 17.6 38.4 36.8
Total 83.1 76.8 164.0 160.5
Tons milled 180.1 167.7 341.9 339.9
Mill head grade (ounce per ton) 0.49 0.48 0.51 0.49
Sub-grade tons milled (1) 8.4 17.4 16.8 35.0
Sub-grade tons mill head grade (ounce per ton) 0.21 0.20 0.24 0.19
Total tons milled (1) 188.5 185.1 358.7 374.9
Combined mill head grade (ounce per ton) 0.47 0.45 0.49 0.47
Total mill recovery (%) 93 92 93 93
Total mine concentrate shipped (tons) (3) 4,397 4,054 8,452 8,704
Platinum grade in concentrate (ounce per ton) (3) 5.04 4.74 5.05 4.58
Palladium grade in concentrate (ounce per ton) (3) 15.34 15.34 15.60 14.88
Costs of metals sold per PGM mined ounce $ 478 $ 590 $ 483 $ 578
Total cash costs per PGM mined ounce – net of credits (Non-GAAP) (2) $ 405 $ 547 $ 425 $ 539
Total cash costs per ore ton milled – net of credits (Non-GAAP) (2) $ 178 $ 227 $ 194 $ 230


Stillwater Mining Company

Key Operating Factors (Continued)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except where noted) 2016 2015 2016 2015
OPERATING AND COST DATA FOR PGM MINE PRODUCTION (Continued)
East Boulder Mine:
Ounces produced
Palladium 41.9 39.1 85.9 77.8
Platinum 12.1 11.1 24.5 22.0
Total 54.0 50.2 110.4 99.8
Tons milled 147.9 131.7 299.2 267.3
Mill head grade (ounce per ton) 0.40 0.41 0.40 0.41
Sub-grade tons milled (1) 14.3 9.6 25.9 20.0
Sub-grade tons mill head grade (ounce per ton) 0.10 0.09 0.10 0.10
Total tons milled (1) 162.2 141.3 325.1 287.3
Combined mill head grade (ounce per ton) 0.37 0.39 0.38 0.38
Total mill recovery (%) 90 91 91 91
Total mine concentrate shipped (tons) (3) 3,793 3,512 7,610 7,317
Platinum grade in concentrate (ounce per ton) (3) 3.21 3.18 3.25 3.03
Palladium grade in concentrate (ounce per ton) (3) 11.14 11.21 11.37 10.72
Costs of metals sold per PGM mined ounce $ 538 $ 634 $ 542 $ 629
Total cash costs per PGM mined ounce – net of credits (Non-GAAP) (2) $ 444 $ 504 $ 445 $ 525
Total cash costs per ore ton milled – net of credits (Non-GAAP) (2) $ 148 $ 179 $ 151 $ 183
(1)  Sub-grade tons milled includes reef waste material only. Reef waste material is PGM-bearing mined material below the cutoff grade for proven and probable reserves but with sufficient economic value to justify processing it through the concentrator along with the mined ore. Total tons milled includes ore tons and sub-grade tons only. See “Proven and Probable Ore Reserves – Discussion” in the Company’s 2015 Annual Report on Form 10-K for further information.
(2)  Total cash costs include total operating costs plus royalties, insurance and taxes other than income taxes. Total cash costs per PGM mined ounce, net of credits is a non-GAAP financial measure that management uses to monitor and evaluate the efficiency of its mining operations. This measure of cost is not defined under U.S. Generally Accepted Accounting Principles (GAAP). Please see Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures and the accompanying discussion for additional detail.
(3)  The concentrate tonnage and grade values are inclusive of periodic re-processing of smelter slag and internal furnace brick PGM bearing materials.


Stillwater Mining Company
Key Operating Factors (Continued)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except for average prices) 2016 2015 2016 2015
SALES AND PRICE DATA
Ounces sold
PGM Mine Production:
Palladium (oz.) 116.9 103.1 221.5 210.4
Platinum (oz.) 34.0 29.9 61.3 59.2
Total 150.9 133.0 282.8 269.6
PGM Recycling: (1)
Palladium (oz.) 54.3 39.8 91.2 83.7
Platinum (oz.) 25.5 23.2 46.9 48.5
Rhodium (oz.) 5.5 5.1 10.5 10.5
Total 85.3 68.1 148.6 142.7
By-products from Mine Production: (2)
Rhodium (oz.) 1.1 1.0 1.6 1.9
Gold (oz.) 2.8 2.9 5.5 5.4
Silver (oz.) 1.6 1.9 3.0 3.3
Copper (lb.) 311.0 262.9 568.0 523.1
Nickel (lb.) 406.7 390.7 797.1 788.5
Average realized price per ounce (3)
PGM Mine Production:
Palladium ($/oz.) $ 566 $ 760 $ 549 $ 772
Platinum ($/oz.) $ 1,005 $ 1,128 $ 967 $ 1,159
Combined ($/oz.)(4) $ 665 $ 842 $ 640 $ 857
PGM Recycling: (1)
Palladium ($/oz.) $ 543 $ 787 $ 556 $ 792
Platinum ($/oz.) $ 931 $ 1,194 $ 922 $ 1,223
Rhodium ($/oz.) $ 658 $ 1,156 $ 687 $ 1,189
Combined ($/oz.)(4) $ 666 $ 954 $ 681 $ 968
By-products from Mine Production: (2)
Rhodium ($/oz.) $ 676 $ 1,053 $ 680 $ 1,107
Gold ($/oz.) $ 1,264 $ 1,186 $ 1,229 $ 1,203
Silver ($/oz.) $ 17 $ 16 $ 16 $ 17
Copper ($/lb.) $ 1.93 $ 2.57 $ 1.92 $ 2.52
Nickel ($/lb.) $ 3.08 $ 4.53 $ 2.92 $ 4.75
Average market price per ounce (3)
Palladium ($/oz.) $ 568 $ 758 $ 546 $ 772
Platinum ($/oz.) $ 1,003 $ 1,125 $ 960 $ 1,159
Combined ($/oz.)(4) $ 666 $ 841 $ 636 $ 857
(1)  Ounces sold and average realized price per ounce from PGM Recycling relate to ounces produced from processing of spent catalyst from catalytic converters and other industrial sources.
(2)  By-product metals sold reflect net values of realized prices (discounted due to product form) per unit sold.
(3)  The Company’s average realized price represents revenues, hedging gains and losses realized on commodity instruments and agreement discounts, divided by ounces sold. The average market price represents the average London market for the actual months of the period.
(4)  The Company reports a combined average realized and market price of palladium and platinum at the same ratio as ounces that are produced from the base metal refinery.


RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

The Company utilizes certain non-GAAP financial measures as indicators in assessing the performance of its mining and processing operations during any period. Because of the processing time required to complete the extraction of finished PGM products, there are typically lags of one to three months between ore production and sale of the finished product. Sales in any period include some portion of material mined and processed from prior periods as the revenue recognition process is completed. Consequently, while costs of revenues (a GAAP financial measure included in the Company’s Consolidated Statements of Comprehensive Income (Loss)) appropriately reflects the expense associated with the materials sold in any period, the Company has developed certain non-GAAP financial measures to assess the costs associated with its producing and processing activities in a particular period and to compare those costs between periods.

While the Company believes that these non-GAAP financial measures may also be of value to outside readers, both as general indicators of the Company’s mining efficiency from period to period and as insight into how the Company internally measures its operating performance, these non-GAAP financial measures are not standardized across the mining industry and in most cases will not be directly comparable to similar measures that may be provided by other companies. These non-GAAP financial measures are only useful as indicators of relative operational performance in any period, and because they do not take into account the inventory timing differences that are included in costs of revenues, they cannot meaningfully be used to develop measures of earnings or profitability. A reconciliation of these measures to costs of revenues, the most directly comparable GAAP financial measure, for each period shown is provided as part of the following tables, and a description of each non-GAAP financial measure is provided below.

Total Consolidated Costs of Revenues: For the Company as a whole, this measure is equal to total costs of revenues, as reported in the Company’s Consolidated Statements of Comprehensive Income (Loss). For the Stillwater Mine, the East Boulder Mine, and PGM Recycling, the Company segregates the expenses within total costs of revenues that are directly associated with each of these activities and then allocates the remaining facility costs included in total cost of revenues in proportion to the monthly volumes from each activity. The resulting total costs of revenues measures for the Stillwater Mine, the East Boulder Mine and PGM Recycling and Other are equal in the aggregate, to total consolidated costs of revenues as reported in the Company’s Consolidated Statements of Comprehensive Income (Loss).

Total Cash Costs (Non-GAAP): These non-GAAP financial measures are calculated as total costs of revenues adjusted to exclude costs of metals sold from PGM Recycling, depletion and depreciation and amortization for Mine Production and PGM Recycling (including in inventory), asset retirement costs, and timing differences resulting from changes in product inventories to arrive at Total Cash Costs before by-product and recycling credits. From this calculation, the Company deducts by-product and recycling income credits to arrive at Total Cash Costs, net of by-product and recycling credits. Total Cash Costs is a measure of extraction efficiency. The Company uses this measure as a comparative indication of the cash costs related to production and processing in its mining operations in any period.

When divided by the total recoverable PGM ounces from production in the respective period, Total Cash Costs per PGM Mined Ounce (Non-GAAP), measured for each mine or combined, provides an indication of the level of cash costs incurred per PGM mined ounce produced in that period. Recoverable PGM ounces from production are an indication of the amount of PGM product mined in any period. Because ultimately extracting PGM material is the objective of mining, the cash cost per PGM mined ounce of extracting and processing PGM ounces in a period is a useful measure for comparing extraction efficiency between periods and between the Company’s mines. Consequently, Total Cash Costs per PGM Mined Ounce (Non-GAAP) in any period is a general measure of extraction efficiency, and is affected by the level of Total Cash Costs (Non-GAAP), by the grade of the ore produced and by the volume of ore produced in the period.

When divided by the total tons milled in the respective period, Total Cash Costs per Ore Ton Milled, measured for each mine or combined, provides an indication of the level of cash costs incurred per ore ton milled in that period. Because of variability of ore grade in the Company’s mining operations, mine production efficiency underground is frequently measured against ore tons produced rather than contained PGM ounces. Because ore tons are first weighed as they are fed into the mill, mill feed is the first point at which mine production tons are measured precisely. Consequently, Total Cash Costs per Ore Ton Milled is a general measure of production efficiency, and is affected both by the level of Total Cash Costs (Non-GAAP) and by the volume of tons produced and fed to the mill.

With respect to 2016 guidance regarding Total Cash Costs per PGM Mined Ounce (net of by-product and recycling credits) and AISC per PGM Mined Ounce, the Company cannot provide a quantitative reconciliation to the most directly comparable GAAP measure without unreasonable effort. However, the Company would expect to calculate these non-GAAP measures in the same manner they were calculated in the reconciliations included in this press release.

 

Stillwater Mining Company
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except per ounce and per ton data) 2016 2015 2016 2015
Consolidated:
Costs of metals sold – Mine Production $ 75,589 $ 80,631 $ 143,032 $ 160,672
Change in mined inventories (palladium and platinum) (8,899 ) (4,397 ) (8,220 ) (4,005 )
Total combined cash costs, before by-product and recycling credits  (Non-GAAP) $ 66,690 $ 76,234 $ 134,812 $ 156,667
By-product revenue credit (6,147 ) (6,914 ) (11,262 ) (13,659 )
PGM Recycling income credit (2,957 ) (2,036 ) (4,734 ) (4,163 )
Total combined cash costs, net of by-product and recycling credits  (Non-GAAP) $ 57,586 $ 67,284 $ 118,816 $ 138,845
PGM mined ounces sold 150.9 133.0 282.8 269.6
Costs of metals sold per PGM mined ounce $ 501 $ 606 $ 506 $ 596
PGM mined ounces produced 137.1 127.0 274.4 260.3
Total combined cash costs per PGM mined ounce, before by-product and recycling credits  (Non-GAAP) $ 487 $ 600 $ 491 $ 601
By-product credit per mined ounce (45 ) (54 ) (41 ) (52 )
Recycling income credit per mined ounce (22 ) (16 ) (17 ) (16 )
Total combined cash costs PGM per mined ounce, net of by-product and recycling credits  (Non-GAAP) $ 420 $ 530 $ 433 $ 533
Ore tons milled 350.8 326.4 683.8 662.3
Total combined cash costs per ore ton milled, before by-product and recycling credits (Non-GAAP) $ 190 $ 233 $ 197 $ 237
By-product credit per ore ton milled (18 ) (21 ) (16 ) (21 )
Recycling income credit per ore ton milled (8 ) (6 ) (7 ) (6 )
Total combined cash costs per ore ton milled, net of by-product and recycling credits (Non-GAAP) $ 164 $ 206 $ 174 $ 210


Stillwater Mining Company

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Continued)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except per ounce and per ton data) 2016 2015 2016 2015
Stillwater Mine:
Costs of metals sold – Mine Production $ 44,474 $ 49,502 $ 84,059 $ 99,763
Change in mined inventories (palladium and platinum) (5,768 ) (2,571 ) (5,666 ) (3,298 )
Total cash costs, before by-product and recycling credits (Non-GAAP) $ 38,706 $ 46,931 $ 78,393 $ 96,465
By-product revenue credit (3,314 ) (3,727 ) (5,888 ) (7,532 )
PGM Recycling income credit (1,784 ) (1,205 ) (2,818 ) (2,540 )
Total cash costs, net of by-product and recycling credits (Non-GAAP) $ 33,608 $ 41,999 $ 69,687 $ 86,393
PGM mined ounces sold 93.1 83.9 173.1 172.7
Costs of metals sold per PGM mined ounce $ 478 $ 590 $ 483 $ 578
PGM mined ounces produced 83.1 76.8 164.0 160.5
Total cash costs per PGM mined ounce, before by-product and recycling credits  (Non-GAAP) $ 466 $ 612 $ 478 $ 602
By-product credit per mined ounce (40 ) (49 ) (36 ) (47 )
Recycling income credit per mined ounce (21 ) (16 ) (17 ) (16 )
Total cash costs per PGM mined ounce, net of by-product and recycling credits  (Non-GAAP) $ 405 $ 547 $ 425 $ 539
Ore tons milled 188.5 185.1 358.7 374.9
Total cash costs per ore ton milled, before by-product and recycling credits (Non-GAAP) $ 205 $ 254 $ 218 $ 257
By-product credit per ore ton milled (18 ) (20 ) (16 ) (20 )
Recycling income credit per ore ton milled (9 ) (7 ) (8 ) (7 )
Total cash costs per ore ton milled, net of by-product and recycling credits (Non-GAAP) $ 178 $ 227 $ 194 $ 230


Stillwater Mining Company

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Continued)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except per ounce and per ton data) 2016 2015 2016 2015
East Boulder Mine:
Costs of metals sold – Mine Production $ 31,115 $ 31,129 $ 58,973 $ 60,909
Change in mined inventories (palladium and platinum) (3,131 ) (1,826 ) (2,554 ) (707 )
Total cash costs, before by-product and recycling credits  (Non-GAAP) $ 27,984 $ 29,303 $ 56,419 $ 60,202
By-product revenue credit (2,833 ) (3,187 ) (5,374 ) (6,127 )
PGM Recycling income credit (1,173 ) (831 ) (1,916 ) (1,623 )
Total cash costs, net of by-product and recycling credits  (Non-GAAP) $ 23,978 $ 25,285 $ 49,129 $ 52,452
PGM mined ounces sold 57.8 49.1 108.9 96.9
Costs of metals sold per PGM mined ounce $ 538 $ 634 $ 542 $ 629
PGM mined ounces produced 54.0 50.2 110.4 99.8
Total cash costs per PGM mined ounce, before by-product and recycling credits  (Non-GAAP) $ 518 $ 584 $ 511 $ 602
By-product credit per mined ounce (52 ) (63 ) (49 ) (61 )
Recycling income credit per mined ounce (22 ) (17 ) (17 ) (16 )
Total cash cost, per PGM mined ounce, net of by-product and recycling credits  (Non-GAAP) $ 444 $ 504 $ 445 $ 525
Ore tons milled 162.2 141.4 325.1 287.3
Total cash costs per ore ton milled, before by-product and recycling credits (Non-GAAP) $ 172 $ 208 $ 174 $ 210
By-product credit per ore ton milled (17 ) (23 ) (17 ) (21 )
Recycling income credit per ore ton milled (7 ) (6 ) (6 ) (6 )
Total cash costs per ore ton milled, net of by-product and recycling credits (Non-GAAP) $ 148 $ 179 $ 151 $ 183


Stillwater Mining Company

All-In Sustaining Costs (a Non-GAAP Financial Measure)
(Unaudited)

All-In Sustaining Costs (Non-GAAP): This non-GAAP financial measure is used as an indicator from period to period of the level of total cash required by the Company to maintain and operate the existing mines, including corporate administrative costs and replacement capital. The measure is calculated beginning with total combined cash costs, net of credits (another non-GAAP financial measure, described above), and adding to it the recycling income credit, domestic corporate general and administrative costs (excluding any depreciation and general and administrative costs of foreign subsidiaries) and that portion of total capital expenditures associated with sustaining the current level of mining operations. Capital expenditures, however, for Blitz, Graham Creek (prior to 2015) and certain other one-time projects are not included in the calculation.

When divided by the total recoverable PGM mined ounces produced in the respective period, All-In Sustaining Costs per PGM Mined Ounce (Non-GAAP) provides an indication of the level of total cash required to maintain and operate the mines per PGM ounce produced in the period. Recoverable PGM ounces from production are an indication of the amount of PGM product extracted through mining in any period. Because the objective of PGM mining activity is to extract PGM material, the all-in cash costs per PGM  mined ounce to produce PGM material, administer the business and sustain the operating capacity of the mines is a useful measure for comparing overall extraction efficiency between periods. This measure is affected by the total level of spending in the period and by the grade and volume of mined ore produced.

Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except $/oz.) 2016 2015 2016 2015
All-In Sustaining Costs
Costs of metals sold – Mine Production $ 75,589 $ 80,631 $ 143,032 $ 160,672
Change in mined inventories (palladium and platinum) (8,899 ) (4,397 ) (8,220 ) (4,005 )
Total combined cash costs, before by-product and recycling credits  (Non-GAAP) $ 66,690 $ 76,234 $ 134,812 $ 156,667
By-product revenue credit (6,147 ) (6,914 ) (11,262 ) (13,659 )
PGM Recycling income credit (2,957 ) (2,036 ) (4,734 ) (4,163 )
Total combined cash costs, net of by-product and recycling credits  (Non-GAAP) $ 57,586 $ 67,284 $ 118,816 $ 138,845
PGM Recycling income credit 2,957 2,036 4,734 4,163
$ 60,543 $ 69,320 $ 123,550 $ 143,008
Consolidated corporate general and administrative costs $ 8,311 $ 10,396 $ 16,608 $ 18,741
Corporate depreciation included in consolidated corporate general and administrative costs (99 ) (120 ) (210 ) (252 )
General and administrative costs – foreign subsidiaries (578 ) (452 ) (1,022 ) (869 )
Total general and administrative costs $ 7,634 $ 9,824 $ 15,376 $ 17,620
Total capitalized costs $ 25,367 $ 32,803 $ 46,633 $ 61,178
Capital associated with expansion (12,136 ) (12,223 ) (19,940 ) (20,344 )
Total Capital incurred to sustain existing operations $ 13,231 $ 20,580 $ 26,693 $ 40,834
All-In Sustaining Costs  (Non-GAAP) $ 81,408 $ 99,724 $ 165,619 $ 201,462
PGM mined ounces sold 150.9 133.0 282.8 269.6
PGM mined ounces produced 137.1 127.0 274.4 260.3
Costs of metals sold per PGM mined ounce $ 501 $ 606 $ 506 $ 596
All-In Sustaining Costs per PGM Mined Ounce (Non-GAAP) $ 594 $ 785 $ 604 $ 774

For a full description and reconciliation of this non-GAAP financial measure to a GAAP financial measure, see Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures section.


Stillwater Mining Company
Reconciliation of Total Cash Costs Guidance and AISC Guidance
(Non-GAAP Financial Measures)
(Unaudited)

A reconciliation of the 2016 Total Cash Costs Guidance and the 2016 AISC Guidance is provided below. The estimates in the table below are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and other applicable laws. Please refer to: Cautionary Note Concerning Forward-Looking Statements, for additional information.

Reconciliation Revised Guidance Range
Costs of metals sold – Mined Production (000’s) $ 279,125
PGM mined ounces sold 550,000 545,000 555,000
Costs of metals sold per PGM mined ounce $ 508 $ 495 $ 520
Costs of metals sold – Mined Production (000’s) $ 279,063
Inventory change (000’s) (10,000 )
Total combined cash costs, before by-product credits and recycling credits (000’s) $ 269,063
PGM mined ounces 540,000 535,000 545,000
Total combined cash costs per PGM mined ounce, before by-product credits and recycling credits $ 498
By-product revenue credit (000’s) $ 24,000
PGM Recycling income credit (000’s) 11,000
Total cash costs, net of by-product and recycling credits (000’s) $ 234,063
Total cash costs per PGM mined ounce, net of by-product and recycling credits $ 433 $ 430 $ 455
Total cash costs, net of by-product and recycling credits (000’s) $ 234,063
PGM Recycling income credit (000’s) 11,000
General and administrative (000’s) 35,000 30,000 40,000
Sustaining capital expenditures (000’s) 55,000 50,000 60,000
All-in sustaining costs (000’s) $ 335,063
All-in sustaining costs per PGM mined ounce $ 620 $ 595 $ 635


Stillwater Mining Company
Underlying Earnings (Loss)
(Non-GAAP Financial Measure)
(Unaudited)

Underlying Earnings (Loss) (Non-GAAP): This non-GAAP financial measure is considered by the Company to be reflective of the actual income / loss position. This non-GAAP financial measure provides to investors and analysts the ability to understand the results of the continuing operations of the Company relating to the production, processing and sale of PGMs, by excluding certain items that have a disproportionate impact on the results for the reported periods. The measure is calculated beginning with Net income (loss) attributable to common stockholders and adding back impairment charges, one-time event charges and charges infrequent to the Company’s continuing operations and the income tax effect of such adjustment. Net loss attributable to noncontrolling interest has been adjusted for the noncontrolling interest’s ownership percentage of any applicable impairment charges to which the noncontrolling interest has an ownership. The Company’s determination of the components of Underlying earnings (loss) are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts.

Net income (loss) attributable to common stockholders is reconciled to Adjusted net income (loss) attributable to common stockholders and Underlying earnings (loss) as follows:

Three Months Ended Six Months Ended
June 30, June 30,
(In thousands) 2016 2015 2016 2015
Net income (loss) attributable to common stockholders $ 784 $ (27,476 ) $ (9,146 ) $ (4,474 )
  Impairment of property, plant and equipment and non-producing mineral properties (46,772 ) (46,772 )
  Income tax effect of adjustment 997 997
Adjusted net income (loss) attributable to common stockholders $ 784 $ 18,299 $ (9,146 ) $ 41,301
  Impairment loss attributable to noncontrolling interest (11,444 ) (11,444 )
Underlying earnings (loss) $ 784 $ 6,855 $ (9,146 ) $ 29,857
CONTACT: INVESTOR CONTACT:
Mike Beckstead
(720) 502-7671
investor-relations@stillwatermining.com


Red Cloud Klondike Strike Signature Platform Hits Several Important Milestones

TORONTO, ON–(Marketwired – June 20, 2016) –

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Red Cloud Klondike Strike Inc. (“RedCloudKS”) is pleased to announce the posting of two more investment opportunities to its equity crowdfunding/online financing platform: Lupaka Gold Corp. (TSX VENTURE: LPK) and Anaconda Mining Inc. (TSX: ANX), as well as the launch of “RCKS Talk,” a free mining information service.

Lupaka Gold Corp. (“Lupaka”)

Lupaka is seeking to raise C$750,000 in a bridge loan financing. This is believed to be the world’s first mining debt securities issue on a crowdfunding platform. Click here for more details.

Anaconda Mining Inc. (“Anaconda”)

Anaconda is seeking to raise C$2,000,000 in a flow-through financing. This is believed to be the world’s first flow through securities issue for a producing mining company on a crowdfunding platform. Click here for more details.

“To date, eleven companies have posted securities offerings on the RedCloudKS platform. Four of those offerings are still open to investors while five have successfully closed, amounting to an aggregate of C$22 million raised for our clients,” said Chad Williams, President of RedCloudKS. “The goal of the RedCloudKS online investment platform is to democratize mining investment by giving every investor equal access to securities offerings usually only shown to very few elite ‘insiders.’ Since inception in March 2016, RedCloudKS has presented investors with equity, debt, and flow-through investment opportunities in a wide range of commodities such as gold, silver, uranium, and nickel in a host of geographic locations such as Quebec, Ontario, Newfoundland, British Columbia, Yukon and West Africa.”

Fresh User Interface and Launch of “RCKS Talk”

In pursuit of the goal to democratize the mining company funding process, RedCoudKS has launched its mining analysis product called RCKS Talk. Traditionally, the distribution of research produced by sell-side analysts has been highly restricted, preventing general investors from seeing the best ideas. No more! Visit the RCKS Talk page at www.RedCloudKS.com.

About Red Cloud Klondike Strike Inc.:

Red Cloud Klondike Strike Inc. (“RedCloudKS”) is an exempt market dealer focused on providing unique and innovative financing alternatives, growth opportunities, and market exposure for select mining companies.

The RedCloudKS team has a mix of technical and financial expertise with over 100 cumulative years of combined mining and corporate finance experience. Working as an extension of management, the RedCloudKS team uses its global network of mining and capital markets professionals and extensive in-house experience in the many facets of the mining business to help companies identify sources of capital and quality actionable merger, acquisition and divestiture opportunities, and to generate and maintain important relationships with key investors.

RedCloudKS’ signature online investment platform offers a unique alternative method of accessing capital for mining companies. It enables investors to directly participate in security offerings of companies selected by RedCloudKS’ experienced team and provides companies access to a fresh pool of investors in a streamlined and secure online process.

For further information, please contact:
Katherine Fedorowicz
VP, Marketing & Investor Relations
Red Cloud Klondike Strike Inc.
kfedorowicz@RedCloudKS.com
www.RedCloudKS.com


5 Top TSX Stocks: Luna Gold Gains on Exploration Agreement With AngloGold Ashanti

The S&P/TSX Composite index (INDEXTSI:OSPTX) was on the rise last week, gaining 2.59 percent to reach 14,105.23 points.

The exchange rose on Friday despite a dip in oil prices. According to the Globe and Mail, several major banks reported better-than-expected earnings, even though they called for further losses on lower oil prices going forward.

Last week’s top TSX-listed mining stocks were: 

  • Gabriel Resources (TSX:GBU)
  • Capstone Mining (TSX:CS)
  • Peregrine Diamonds (TSX:PGD)
  • Luna Gold (TSX:LGC)
  • Eastern Platinum (TSX:ELR)

Here’s a look at what moved the share prices of those companies last week:

Gabriel Resources

Shares of Gabriel Resources were up 11.63 percent to  $0.24 for the week. The company is focused on permitting and developing its Rosia Montana gold-silver project in Romania. However, the company has been in a dispute with the Romanian Government since January 2015 regarding the classification of a village in the area as a site of historical interest. Gabriel Resources released its first quarter results on May 12, but there has been no further news from the company to explain last week’s price rise.

Capstone Mining

Capstone operates three copper mines throughout Canada and the US, with development projects in British Columbia and Chile. The company released its annual sustainability report on May 3, but there has been no further news that would explain last week’s rise in share price for the company. Capstone gained 6.35 percent to reach $0.67 per share for the week.

Peregrine Diamonds

Shares of Peregrine Diamonds were up 5.71 percent last week to $0.185. On May 17, the company announced the start of a 2016 exploration drilling program at its Sikwane diamond project in Botswana, but there was no additional news last week to explain the company’s rise in share price. Peregrine also holds the advanced stage Chidliak project on Baffin Island in Nunavut, Canada.

Luna Gold

Luna Gold gained 5.56 percent last week to reach $0.19 per share. The company saw its shares rise on Friday after it announced an exploration agreement with AngloGold Ashanti (NYSE:AU) for its greenfield mineral claims in Brazil. AngloGold must spend US$14 million over four years to earn a 70 percent interest in the project.

“We are very happy to have one of the largest gold producers in the world, AngloGold Ashanti, join us in this exploration project,” said Luna Gold president and CEO Marc Leduc in Friday’s release. “This clearly demonstrates the outstanding geological potential of the greenfields claims.”

Eastern Platinum

Finally, rounding out the top five was Eastern Platinum, which holds a number of platinum projects in South Africa’s Bushveld Complex. On April 4, Eastern Platinum announced that a proposed class action lawsuit against the company had been dismissed. There has been no further news that would explain last week’s share price rise. Eastern Platinum was up 5.5 percent to $1.15 per share last week.

Don’t forget to follow us @INN_Resource for real-time news updates.

 

Data for 5 Top TSX Stocks articles is retrieved each Friday after market close using The Globe and Mail’s market data filter. Only companies with a market capitalization greater than $50 million prior to the week’s gains are included. Companies within the mining and precious metals sectors are considered.

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.

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