Ascendant Resources Announces Positive Free Cash Flow for Q4 2017 and Provides 2018 Guidance

Ascendant Resources Inc. (TSX:ASND) (OTCQX:ASDRF) (FRA:2D9) (“Ascendant” or the “Company”) is delighted to report its first quarter of free cash flow at its El Mochito mine in Honduras with $8.0 million in cash exiting 2017. The Company is also pleased to announce fourth quarter and full year 2017 production results, with record monthly production achieved in December. With the turnaround of the El Mochito mine now definitively complete, the financial and operational success achieved in 2017 provides management with the confidence to deliver robust 2018 guidance as the El Mochito mine begins a period of sustained profitable production.

2017 Operational Performance – Guidance Exceeded at Record Throughput

Total contained metal production for the 2017 calendar year was 66.1 million pounds of zinc equivalent1 exceeding the Company’s guidance of 65.8 million pounds. During the fourth quarter, contained zinc equivalent metal production was 19.6 million pounds, up by 12% from the third quarter.

Milled production for the month of December was 69,578 tonnes (or an average of 2,399 tonnes per operating day). This represents the strongest month of production achieved at the El Mochito mine during 2017, and an overall increase in production of 81% since January 2017, a significant accomplishment only a year after acquiring the operation. Milled production for the fourth quarter was 198,355 tonnes (or an average of 2,241 tonnes per operating day) representing a 13% improvement over third quarter production of 176,037 tonnes (or an average of 1,934 tonnes per operating day).

Operations have continued to benefit from the ongoing improvement programs within the operating environment and the introduction of new mining equipment. Processing recoveries remained relatively consistent throughout the year and are expected to remain consistent going forward. Ore grades are expected to improve in 2018 as production shift towards higher grade areas within the mine, namely Esperanza and Nueva Este, and with the contribution from conventional mining activities within smaller but higher-grade ore zones. In addition, the remainder of the new mining equipment is expected to be fully deployed by mid-2018 supporting higher equipment availability for maintaining current production rates.

1 This figure was calculated on a spot metal price basis. Using the metal price assumptions as in the 2017 guidance press release dated April 2017 of US$2,744/t (US$1.25/lb) Zinc, US$2,289/t (US$1.04/lb) Lead and US$17.50/oz Silver, contained metal produced for 2017 was 67.0Mlbs zinc equivalent pounds.

Operational performance for fourth quarter and full year 2017 is provided in the table below:

Units October November December Q4/17
Ore Milled tonnes 64,449 64,327 69,578 198,355
Ore Milled tonnes per day 2,184 2,144 2,399 2,241
Working Days 29.5 30 29 89
Mill Head Grade
Average Zn grade % 3.72% 3.84% 3.41% 3.65%
Average Pb grade % 1.47% 1.59% 1.19% 1.41%
Average Silver Grade g/t 35.7 38.0 29.00 34.1
ZnEq Head Grade % 5.44% 5.70% 4.82% 5.31%
Average Recoveries
Zinc % 88.6% 88.6% 88.3% 88.5%
Lead % 72.4% 76.6% 74.7% 74.6%
Silver % 83.3% 77.0% 72.8% 77.6%
Contained Metal Production
Zinc tonnes 2,127 2,186 2,098 6,411
Lead tonnes 665 782 619 2,066
Silver ozs 61,595 60,048 47,395 169,039
Zinc equivalent metal tonnes 2,955 3,099 2,824 8,878
Zinc equivalent metal MM lbs 6,514,109 6,832,496 6,226,527 19,573,132
Units Q3/17 Q2/17 Q1/17 Year Year
Ore Milled tonnes   176,037   150,785   131,115 656,292   663,475 -1%
Ore Milled tonnes per day   1,934   1,733   1,619   1,889   1,923
Working Days   91   87   81   347.5   345
Mill Head Grade
Average Zn grade % 3.51% 3.36% 3.43% 3.50% 3.50%
Average Pb grade % 1.46% 1.34% 1.33% 1.39% 1.50% -7%
Average Silver Grade g/t 38.3 48.9 52.1   43.00   48.0 -10%
ZnEq Head Grade % 5.36% 5.50% 5.56% 5.63% 5.73% -2%
Average Recoveries
Zinc % 88.8% 88.9% 89.8% 88.9% 85.1% 4%
Lead % 73.7% 72.3% 76.9% 74.3% 66.6% 12%
Silver % 78.0% 79.3% 78.8% 77.7% 68.9% 13%
Contained Metal Production
Zinc tonnes   5,488   4,505   4,032   20,436   19,986 2%
Lead tonnes   1,894   1,459   1,341   6,760   6,468 5%
Silver ozs   168,181   188,245   173,041   698,505   705,520 -1%
Zinc equivalent metal tonnes   7,936   6,975   6,201   29,990   29,843 0.5%
Zinc equivalent metal MM lbs 17,496,673 15,376,986 13,671,410  66,118,201  65,793,000 0.5%

2018 Production and Cost Guidance – Strong Production Supporting Meaningful Free Cash Flow

The operational and financial milestones achieved in 2017 have positioned the Company for an exceptional 2018, with an expected 41%-65% increase in contained metal production as compared to 2017. Over the past year, the Company has focused on tonnage growth, correcting existing deficiencies as well as reinvigorating and training the work force, culminating in a ramp up in profitability and achieving the Company’s first quarter of positive free cash flow.

In 2018, the Company plans to continue to build on this solid operating performance while focusing on maximizing free cash flow and long-term profitability during a period of continued stable operations. During 2018 management expects to maintain production rates of between 2,200 – 2,400 tonnes per day while increasing mill feed grades and reducing costs.

Capital expenditures include development costs, the balance of mobile equipment purchases as well as exploration expenditures as the Company continues to focus on expanding the overall size and grade of the resource base to support the Company’s long-term growth objectives. Operational updates will be provided on a quarterly basis going forward.

2018 Production Guidance is provided in the table below:
(all financial figures in $US)

Contained Metals in Concentrate
Zinc equivalent metal 93 – 109 million lbs
Zinc 65 – 73 million lbs
Lead 24 – 28 million lbs
Silver 900,000 – 1,200,000 ozs
Direct Operating Costs $70 – $80 / tonne
Capital Expenditure $16 – $18 million
Financial Metrics
Adjusted EBITDA2 $32 –$ 40 million
Free Cash Flow $14 – $20 million
All figures in the above table are based on the following metal price assumptions; $1.50/lb zinc, $1.10/lb lead and $18/oz silver.

2017 Achievements at El Mochito a Yardstick for Success within the Mining Industry

Ascendant acquired the El Mochito mine in December 2016, almost 70 years into continued operations by several operators, many of whom had significant financial means. Within less than a year, Ascendant’s operating team has taken what was an undercapitalized and underperforming mine and turned it into a free cash-flow generating operation with record production rates, well above those of previous operators. This successful and timely turnaround is a major feat for a mine of any size or age. Using the talents and determination of the Company’s team, El Mochito delivered an 81% increase in production for 2017 and is now a mine that can sustain and even improve on current throughput rates while providing strong financial performance for years to come.

Exiting the year, Ascendant has a strong working capital position with a cash balance of $8.0 million and substantial value in concentrate inventories, which are expected to be shipped on a monthly basis. This working capital position and the projected cash flows for 2018 provide the Company with the financial strength needed to fully fund all planned, development, exploration and capital expenditures. The work and subsequent success of the team this year indicates there is tremendous long-term opportunity remaining at El Mochito yet to be fully harnessed.

The Company continues to target the completion of a new NI 43-101 mineral resource report by the second quarter of 2018 which is expected to highlight the significant resource potential at El Mochito. Exploration results published in April and October 2017 highlight exciting grades and intercepts and will contribute to the report in the second quarter. The Company is also undertaking a review of various long-term optimization programs to support a lower cost structure and higher sustainable production rates which should be completed by mid year.

President and CEO Chris Buncic stated: “During the past year, we have been successful in completely transforming the El Mochito mine into a cash flow positive operation through rigorous optimization programs at all levels in the Company. We were able to deliver on our goal of restoring production levels beyond prior highs and, as a result, successfully exceeded our annual production target, a testament to the hard work and ability of our team. With a year of strong operational success behind us, El Mochito has proven capable to be a cornerstone asset with great opportunity to generate significant free cash flows for years to come. It is difficult to effectively stress what an incredible accomplishment we have achieved this year.”

He continued, “In 2018, Ascendant will continue to build on the successes of 2017 as we pursue further operational improvements, increasing head grade to the mill leading to improved value per tonnes milled while improving the contribution margin through a significant focus on cost cutting to drive profitability. Exploration work to-date has demonstrated the potential for greater tonnage at higher grades, and we look forward to providing a resource update in the second quarter.”

2Adjusted EBITDA is a Non-IFRS measure and is calculated by considering the Company’s earnings before interest payments, tax, depreciation and amortization, adjusted for net foreign exchange expenses.

About Ascendant Resources Inc.

Ascendant is a Toronto-based mining company focused on its 100%-owned producing El Mochito zinc, silver and lead mine in west-central Honduras, which has been in production since 1948. After acquiring the mine in December 2016, Ascendant implemented a rigorous optimization program aimed at restoring the historic potential of the El Mochito mine. In 2017, the Company successfully completed the operational turnaround it set out to achieve with sustained production at record levels and profitability restored. The Company now remains focused on cost reduction and further operational improvements to drive robust free cash flow in 2018 and beyond. Ascendant is also focused on expanding and upgrading known resources through extensive exploration work for near-term growth. With a significant land package of 11,000 hectares and an abundance of historical data there are several regional targets providing longer term exploration upside which could lead to further resource growth. The Company is also engaged in the evaluation of producing and development stage mineral resource opportunities, on an ongoing basis. The Company’s common shares are principally listed on the Toronto Stock Exchange under the symbol “ASND”. For more information on Ascendant Resources, please visit our website at

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

For further information please contact:

Katherine Pryde
Director, Communications & Investor Relations
Tel: 888-723-7413
[email protected]

Forward Looking Information

This news release contains “forward-looking statements” and “forward-looking information” (collectively, “forward-looking information”) within the meaning of applicable Canadian securities legislation. All information contained in this news release, other than statements of current and historical fact, is forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “budget”, “guidance”, “scheduled”, “estimates”, “forecasts”, “strategy”, “target”, “intends”, “objective”, “goal”, “understands”, “anticipates” and “believes” (and variations of these or similar words) and statements that certain actions, events or results “may”, “could”, “would”, “should”, “might” “occur” or “be achieved” or “will be taken” (and variations of these or similar expressions). Forward-looking information is also identifiable in statements of currently occurring matters which may continue in the future, such as “providing the Company with”, “is currently”, “allows/allowing for”, “will advance” or “continues to” or other statements that may be stated in the present tense with future implications. All of the forward-looking information in this news release is qualified by this cautionary note.

Forward-looking information in this news release includes, but is not limited to, statements regarding the consistency of processing recovery levels, improvements of grades in 2018, deployment of new mining equipment, increase in contained metal production, maintenance of production rates, increase of mill feed grades, reduction of costs, monthly shipments of concentrate, the ability to fully fund planned development, exploration and capital expenditures, completion of an NI 43-101 report and the undertaking of various long-term optimization programs. Forward-looking information is not, and cannot be, a guarantee of future results or events. Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by Ascendant at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies and other factors that may cause actual results and events to be materially different from those expressed or implied by the forward-looking information. The material factors or assumptions that Ascendant identified and were applied by Ascendant in drawing conclusions or making forecasts or projections set out in the forward-looking information include, but are not limited to, the ability of the Company to maintain the consistency of processing recovery levels, to improve grades in 2018, to deploy new mining equipment, increase contained metal production, maintain production rates, increase mill feed grades, reduce costs, make monthly shipments of concentrate, fully fund planned development, exploration and capital expenditures, complete an NI 43-101 report and undertake various long-term optimization programs and other events that may affect Ascendant’s ability to develop its project; and no significant and continuing adverse changes in general economic conditions or conditions in the financial markets.

The risks, uncertainties, contingencies and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information may include, but are not limited to, risks generally associated with the mining industry, such as economic factors (including future commodity prices, currency fluctuations, energy prices and general cost escalation), uncertainties related to the development and operation of Ascendant’s projects, dependence on key personnel and employee and union relations, risks related to political or social unrest or change, rights and title claims, operational risks and hazards, including unanticipated environmental, industrial and geological events and developments and the inability to insure against all risks, failure of plant, equipment, processes, transportation and other infrastructure to operate as anticipated, compliance with government and environmental regulations, including permitting requirements and anti-bribery legislation, volatile financial markets that may affect Ascendant’s ability to obtain additional financing on acceptable terms, the failure to obtain required approvals or clearances from government authorities on a timely basis, uncertainties related to the geology, continuity, grade and estimates of mineral reserves and resources, and the potential for variations in grade and recovery rates, uncertain costs of reclamation activities, tax refunds, hedging transactions, as well as the risks discussed in Ascendant’s most recent Annual Information Form on file with the Canadian provincial securities regulatory authorities and available at

Should one or more risk, uncertainty, contingency, or other factor materialize, or should any factor or assumption prove incorrect, actual results could vary materially from those expressed or implied in the forward-looking information. Accordingly, the reader should not place undue reliance on forward-looking information. Ascendant does not assume any obligation to update or revise any forward-looking information after the date of this news release or to explain any material difference between subsequent actual events and any forward-looking information, except as required by applicable law.

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