Denarius Metals Announces Third Quarter and First Nine Months 2023 Results

Rhea-AI Summary

Denarius Metals Corp. (TSXV: DSLV) (OTCQX: DNRSF) announced the filing of unaudited financial statements and MD&A for the three and nine months ended September 30, 2023. The company closed a private placement of CA$20.6 million for its Zancudo Project in Colombia, filed a technical report supporting an Inferred Mineral Resource estimate, and announced the results of a preliminary economic assessment for the project.

Positive

• The company closed a private placement of CA$20.6 million for its Zancudo Project, indicating investor confidence in the project's potential. The updated Inferred Mineral Resource estimate for the Zancudo Project comprises 4.1 million tonnes grading 6.5 g/t gold and 107 g/t silver totaling 860,000 ounces of gold and 14.1 million ounces of silver, showing significant resource potential. The results of the preliminary economic assessment affirm the economic viability of the planned underground mining operation at the Zancudo Project, providing a positive outlook for future operations.

Negative

• The private placement of senior unsecured convertible debentures due 2028 may lead to potential dilution for existing shareholders. The company's reliance on the success of the Zancudo Project for future cash flow could pose a risk if the project faces delays or operational challenges. The need to acquire and install a 1,000 tpd processing plant and start a mining operation introduces additional capital and operational expenses, impacting short-term financials.

Toronto, Ontario--(Newsfile Corp. - November 29, 2023) - Denarius Metals Corp. (TSXV: DSLV) (OTCQX: DNRSF) ("Denarius Metals" or "the Company") announced today that it has filed its unaudited interim condensed consolidated financial statements and accompanying management's discussion and analysis (MD&A) for the three and nine months ended September 30, 2023. These documents can be found on its website at www.denariusmetals.com and by reviewing its profile on SEDAR+ at www.sedarplus.ca. All financial figures contained herein are expressed in U.S. dollars unless otherwise noted.

Denarius Metals closed a private placement in October 2023 of CA$20.6 million in aggregate principal amount of senior unsecured convertible debentures due 2028 (the "Debentures") with the principal use of funds focused on bringing its Zancudo Project in Colombia into production in 2024. The 100%-owned Zancudo Project will be the Company's first mine going into operation and will provide an important source of internally generated cash flow to the Company as it carries out its exploration and development activities at its projects in Spain. The Company expects to start up a 500 tonnes per day ("tpd") mining operation next year with a local contract miner, initially targeting the existing mine workings and veins of the historic producing Independencia Mine. A portion of the net proceeds of the Debentures will also be used to acquire and install a 1,000 tpd processing plant, expected to be in operation by the fourth quarter of 2024, to produce a high-grade gold-silver concentrate.

In October 2023, the Company filed a technical report on SEDAR+ for the Zancudo Project pursuant to National Instrument 43‐101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). The technical report supports the updated Inferred Mineral Resource estimate ("MRE") for the Zancudo Project announced by the Company on September 5, 2023 with an effective date of July 31, 2023. The updated MRE comprises 4.1 million tonnes grading 6.5 g/t gold and 107 g/t silver totaling 860,000 ounces of gold and 14.1 million ounces of silver. At a gold equivalent grade of 8.1 g/t, the updated MRE represents a total of 1,060,000 gold equivalent ounces.

The Company also announced the results of a preliminary economic assessment ("PEA") in October 2023 which affirms the economic viability of the planned underground mining operation at the Zancudo Project. The PEA, based on the updated MRE noted above and expected to be filed on SEDAR+ on or about December 14, 2023, envisions a 10-year mine life over which the Company expects to generate net revenue of approximately $1.0 billion from the sale of approximately 576,000 payable ounces of gold and 8.8 million payable ounces of silver at a life-of-mine ("LOM") average all-in sustaining cost ("AISC") of $1,059 per ounce of gold. The Zancudo deposit remains open for further expansion in all directions and the Company expects to commence a 10,000 meters drilling program in early 2024 once the construction of supporting infrastructure is completed.

At the Lomero Project in Southern Spain, the Company filed a NI 43-101 technical report on SEDAR+ dated November 2, 2023 to support the updated MRE announced by the Company on September 18, 2023 in which it converted approximately 73% of the initial Inferred MRE prepared in 2022 to the Indicated Mineral Resources category. The updated MRE, with an effective date of July 31, 2023, was prepared following the completion of the Company's Phase 2 and Phase 3 infill and validation drilling campaigns carried out from October 2022 through July 2023. The current geological model and the updated MRE for the Lomero-Poyatos deposit include the results obtained from a total of 146 holes representing 44,228 meters of drilling completed to date by the Company plus another 55 historical holes drilled by Cambridge Mineral Resources ("CMR") in 2001 to 2007 representing 10,053 meters. The updated MRE for the Lomero Project comprises:

Indicated Mineral Resources totaling 7.73 Mt at 0.66% Cu, 1.03% Zn, 0.46% Pb, 25 g/t Ag and 2.27 g/t Au (1.91% CuEq) containing an estimated 51 kt Cu, 80 kt Zn, 36 kt Pb, 6.1 Moz Ag and 0.6 Moz Au; and, 
Inferred Mineral Resources totaling 3.45 Mt at 0.29% Cu, 1.18% Zn, 0.53% Pb, 22 g/t Ag and 1.86 g/t Au (1.46% CuEq) containing an estimated 10 kt Cu, 41 kt Zn, 18 kt Pb, 2.5 Moz Ag and 0.2 Moz Au.

At the Toral Project in Northern Spain, the 2023 drilling program agreed to between the Company and Europa Metals Ltd. ("Europa") pursuant to the Company's arrangement to acquire an initial 51% ownership interest in the project was completed in August. The 2023 drilling campaign comprised approximately 6,200 m of validation and infill drilling in nine holes completed within the project's known Indicated Mineral Resource area. All holes completed were successful in intersecting mineralization adjacent to selected, previously reported high grade intersections within the Toral Project's Indicated Resource block. The Company is currently working on an updated MRE incorporating the 2023 drilling results and designing the 2024 drilling program with Europa. In addition, the formal application for a mining license for the Toral Project was completed and submitted in October 2023 to the Junta of Castille and Leon, the local mining authority.

The Company incurred total exploration and capital expenditures of approximately $3.8 million in the third quarter of 2023, up from $2.4 million in the third quarter last year primarily as a result of its Phase 1 construction activities at the Zancudo Project. This brings the total exploration and capital expenditures for the first nine months of 2023 to $11.6 million compared with $7.0 million in the first nine months of 2022. These expenditures, along with the Company's general and administrative expenses, were funded by the $11.2 million net proceeds received from the Rights Offering and Private Placement, both of which were completed earlier this year, and by the $2.2 million received in cash from Aris Mining Corporation in February 2023 on the termination of the Guia Antigua Project license.

At September 30, 2023, the Company had a cash balance of approximately $1.5 million that was bolstered in October 2023 by the approximately $15.2 million gross proceeds from the Debentures financing, of which the Company deposited $1.8 million into a trust account to fund the first 12 monthly interest payments on the Debentures commencing November 2023.

The Company reported a net loss for the third quarter of 2023 of $1.0 million ($0.02 per share) compared with $0.7 million ($0.03 per share) in the third quarter last year. This brings the net loss for the first nine of 2023 to $5.0 million ($0.10 per share), including a $1.9 million non-cash loss related to the Company's termination of the Guia Antigua Project license, compared with a net loss for the first nine months of 2022 of $2.3 million ($0.11 per share).

About Denarius Metals

Denarius Metals is a Canadian junior company engaged in the acquisition, exploration, development and eventual operation of polymetallic mining projects in high-grade districts, with its principal focus on the Lomero Project, a polymetallic deposit located on the Spanish side of the prolific copper rich Iberian Pyrite Belt, one of the largest districts of pyrite-rich massive sulfide deposits in the world. The Company is also carrying out an exploration campaign on the Toral Zn-Pb-Ag Project located in the Leon Province, Northern Spain pursuant to a definitive agreement signed in 2022 for an option and joint-venture arrangement with Europa (AIM: EUZ) pursuant to which Europa has granted Denarius Metals two options to acquire up to an 80% ownership interest in Europa Metals Iberia S.L. ("EMI"), a wholly-owned Spanish subsidiary of Europa which holds the Toral Project. The Company has commenced construction activities at its 100%-owned Zancudo Project in Colombia, which includes the historic producing Independencia mine, providing an opportunity to develop near-term production and cash flow commencing in 2024 through local contract mining and long-term growth through continued exploration of the Zancudo deposit which remains open in all directions.

Additional information on Denarius Metals can be found on its website at www.denariusmetals.com and by reviewing its profile on SEDAR+ at www.sedarplus.ca.

Cautionary Statement on Forward-Looking Information

Neither the 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.

This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to anticipated business plans or strategies, including exploration programs, expected exploration results, Mineral Resource estimates, preliminary economic assessments and future mining operations. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Denarius Metals to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements are described under the caption "Risk Factors" in the Company's Annual Information Form dated April 21, 2023 which is available for view on SEDAR+ at www.sedarplus.ca. Forward-looking statements contained herein are made as of the date of this press release and Denarius Metals disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

For Further Information, Contact:

Michael Davies
Chief Financial Officer
(416) 360-4653
investors@denariusmetals.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/189100

FAQ

What financial documents did Denarius Metals Corp. announce the filing of?

Denarius Metals Corp. announced the filing of its unaudited interim condensed consolidated financial statements and accompanying management's discussion and analysis (MD&A) for the three and nine months ended September 30, 2023.

What was the principal use of funds from the private placement?

The principal use of funds from the private placement of CA$20.6 million was focused on bringing the Zancudo Project in Colombia into production in 2024.

What is the updated Inferred Mineral Resource estimate for the Zancudo Project?

The updated Inferred Mineral Resource estimate comprises 4.1 million tonnes grading 6.5 g/t gold and 107 g/t silver, totaling 860,000 ounces of gold and 14.1 million ounces of silver.

What did the preliminary economic assessment affirm?

The preliminary economic assessment affirms the economic viability of the planned underground mining operation at the Zancudo Project, based on the updated Inferred Mineral Resource estimate and expected to be filed on SEDAR+.