ORVANA ISSUES INCREASED ANNUAL PRODUCTION GUIDANCE FOR 2018ORVANA ISSUES INCREASED ANNUAL PRODUCTION GUIDANCE FOR 2018 Orvana Minerals Corp. has issued its production, capital expenditure, estimated cash operating costs (COC) and all-in-sustaining costs (AISC) guidance for fiscal 2018.
"We are pleased to issue increased production guidance with reduced COC and AISC for fiscal 2018," stated Jim Gilbert, Chairman and CEO. "In keeping with our core strategy and clear commitment to increase production and lower unit costs, our operations have delivered substantially improved results in fiscal 2017 and we expect this positive trend to continue in fiscal 2018. At El Valle, having ramped up development and plant throughput rates, the key objective is to achieve significant grade enhancements by mining a higher proportion of higher gold grade oxide zones. This is expected to result in higher gold production at a slightly lower throughput rate. At Don Mario, production will transition to the Cerro Felix deposit which is the first phase of the anticipated three year mine life extension."
The following tables set out Orvana's fiscal 2018 production, unit cost and capital expenditure guidance. The fiscal 2017 guidance is presented for comparative purposes. The Company remains on track to meet its fiscal 2017 guidance.
FY 2018 GuidanceFY 2017 Guidance El Valle Production Gold (oz) 65,000 - 72,000 50,000 - 55,000 Copper (million lbs) 4.1 - 4.5 6.0 - 6.5 Don Mario Production Gold (oz) 45,000 - 48,000 35,000 - 40,000 Copper (million lbs) 2.0 - 2.3 7.0 - 7.5 Total Production Gold (oz) 110,000 - 120,000 85,000 - 95,000 Copper (million lbs) 6.1 - 6.8 13.0 - 14.0 Total capital expenditures (US$ millions)$24.0 - $27.0 $27.0 - $30.0 COC (by-product) ($/oz) gold (1)(2)(3) $950 - $1,050 $1,050 - $1,150 AlSC (by-product) ($/oz) gold (1)(2)(3) $1,150 - $1,250 $1,300 - $1,400 (1) FY 2018 guidance assumptions for COC and AISC include by-product commodity prices of $2.75 per pound of copper and an average Euro to US Dollar exchange of 1.20. (2) FY 2017 guidance assumptions for COC and AISC include by-product commodity prices of $2.00 per pound of copper and an average Euro to US Dollar exchange of 1.12. (3) COC and AISC are non-IFRS performance measures with no standard definition under IFRS. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors use this information to evaluate the Company's performance including the Company's ability to generate cash flows from its mining operations. Accordingly, these performance measures are intended to provide additional information and should not be considered in isolation or as substitutes for measures of performance prepared in accordance with IFRS. AISC includes COC, sustaining capital, reclamation accretion and amortization, corporate general and administrative expenses and exploration expense.
El Valle Mine
At El Valle, the Company's flagship asset, the primary objectives in fiscal 2018 are to (i) increase gold production by increasing the proportion of higher gold grade oxide ore processed in the plant; (ii) enhance grade control in the mine by reducing the amount of inferred resources in the mining sequence; and (iii) maintain or improve gold recovery in the plant. These actions are expected to result in increased gold production and a further reduction of COC and AISC in fiscal 2018. Planned capital expenditures at El Valle in fiscal 2018 include underground mine development, completion of infrastructure upgrades, underground fleet upgrades to support oxide mining and a six meter raise of the tailings facility.
Don Mario Mine
During fiscal 2018, the Company will be transitioning its mining activities from the lower mineralized zone ("LMZ") to the Cerro Felix open pit deposit, located approximately 500 meters from LMZ. Development of Cerro Felix is expected to begin immediately in the first quarter with pre-stripping activities, with production expected by the third quarter. The costs of the planned higher strip ratio, in addition to the anticipated lack of recoverable copper from the Cerro Felix deposit are expected to increase unit costs.
The Company is currently investigating the possibility of processing existing stockpiles at Don Mario to produce copper concentrates. Successful results of the metallurgical and economic evaluations currently being undertaken may allow the Company to blend the resulting material with Cerro Felix feed, which would allow a continuation of concentrate production and copper revenues.
In the event that no blending of copper-bearing stockpile material is possible, concurrent with the commencement of production from Cerro Felix, the Company intends to discontinue the production of copper concentrate and will continue to produce gold dore using its carbon-in-leach circuit. Planned capital expenditures include the tailings storage facility expansion project, which is currently underway, and procurement of additional mining equipment.
About Orvana
Orvana is a multi-mine gold and copper producer. Orvana's operating assets consist of the producing gold-copper-silver El Valle and Carles mines in northern Spain and the producing gold-copper-silver Don Mario mine in Bolivia. Additional information is available at Orvana's website (www.orvana.com).
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