LUCA REPORTS STRONG Q1 2024 WITH C$7.3M OF NET INCOME
Highlights
- Production of 14,148 troy oz of gold equivalent up 20% from Q4 2023, being comprised of 4,297 ounces of gold, 207,505 ounces of silver, 3,068 tonnes of zinc, 791 tons of copper and 661 tonnes of lead.
- Total Net Revenue of C$22.04 million, an increase 21% from Q4 2023
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A milestone achievement of Positive Operating Earnings: generated
C$4.8 million in operating income andC$7.3 million in net income. - Cash Flow: C$4.04 million in positive operating cash flow before working capital changes.
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Operating Costs: All-in Sustaining costs per AuEq oz produced ("AISC") was
US$1,325 atCampo Morado andUS$1,690 at Tahuehueto for consolidated AISC ofUS$1,549 . We note that AISC is expected to decrease at Tahuehueto and atCampo Morado as both mines continue to ramp up production in 2H 2024. - Construction at Tahuehueto nearing completion: The third filter press, being the last major component to complete construction at Tahuehueto is currently being installed with commissioning upon completion of installation and expected to be operational in Q2 2024.
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Campo Morado Improvement Project ("CMIP") moving forward: The two major steps we are focused on going forward are to increase throughput at theCampo Morado mine, which is well underway and to implement the copper lead separation process to produce three separate concentrates (copper, zinc and lead).
It is a great position to be in. We have two long life mines - a producing copper-zinc mine and a brand new gold-silver mine moving to commercial production at a time when metal prices are rising. We expect to continue creating significant shareholder value and take advantage of our unhedged gold, silver and copper production".
Production and Financial Overview
1. |
Gold equivalents are calculated using an 88.72:1 (Ag/Au), 0.0005:1 (Au/Zn), 0.0018:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Q1 2024; 85.07:1 (Ag/Au), 0.0006:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Q4, 2023; 81.84:1 (Ag/Au), 0.0006:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Q3,2023; 81.80:1 (Ag/Au), 0.0006:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Q2 2023; 83.71:1 (Ag/Au), 0.0008:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Q1,2023 |
2. |
Production costs include mining, milling, and direct overhead cost at the operation sites. See reconciliation on page 25 of the |
3. |
Cash cost per gold equivalent ounce includes mining, processing, and direct overhead costs. See reconciliation on page 25 of the |
4. |
AlSC per Au/Eq oz includes mining, processing, direct overhead, corporate general and administration expenses, on-site exploration, reclamation, and sustaining capital. See Reconciliation to IFRS on page 25 of the |
5. |
See "Non-IFRS Financial Measures" on page 21 of the |
6. |
Based on provisional sales before final price adjustments, before payable metal deductions, treatment, and refining charges of the |
7. |
All-in cost per AuEq oz includes AISC plus interest paid and loan payments. See page 25 of the |
About
Luca Mining (TSX-V: LUCA, OTCQX: LUCMF, Frankfurt: Z68) is a diversified Canadian mining company with two 100%-owned producing mines in Mexico.The Company produces gold, copper, zinc, silver and lead from these mines that each have considerable development and resource upside.
The
The Tahuehueto Gold,
The Company expects its operations to start generating positive cash flows in 2024.Luca Mining is focused on growth with the aim of maximizing shareholder returns.
For more information, please visit: www.lucamining.com
On Behalf of the Board of Directors
(signed) "Ramon Perez"
Qualified Persons
The technical information contained in this News Release has been reviewed and approved by Mr.
Cautionary Note Regarding Production Decisions and Forward-Looking Statements
It should be noted that Luca declared commercial production at
Positive operating cash flow is defined as excluding capital, debt repayment and Trafigura financing.
Statements contained in this news release that are not historical facts are "forward-looking information" or "forward-looking statements" (collectively, "Forward-Looking Information") within the meaning of applicable Canadian securities laws. Forward Looking Information includes, but is not limited to, disclosure regarding the planned program to improve mining operations at
Neither
NON-IFRS FINANCIAL MEASURES
The Company has disclosed certain non-IFRS financial measures and ratios in this MD&A, as discussed below. These non-IFRS financial measures and non-IFRS ratios are widely reported in the mining industry as benchmarks for performance and are used by Management to monitor and evaluate the Company's operating performance and ability to generate cash. The Company believes that, in addition to financial measures and ratios prepared in accordance with IFRS, certain investors use these non-IFRS financial measures and ratios to evaluate the Company's performance. However, the measures do not have a standardized meaning under IFRS and may not be comparable to similar financial measures disclosed by other companies. Accordingly, non-IFRS financial measures and non-IFRS ratios should not be considered in isolation or as a substitute for measures and ratios of the Company's performance prepared in accordance with IFRS.
Non-IFRS financial measures are defined in National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure ("NI 52- 122") as a financial measure disclosed that (a) depicts the historical or expected future financial performance, financial position or cash flow of an entity, (b) with respect to its composition, excludes an amount that is included in, or includes an amount that is excluded from, the composition of the most directly comparable financial measure disclosed in the primary financial statements of the entity, (c) is not disclosed in the financial statements of the entity, and (d) is not a ration, fraction, percentage or similar representation.
A non-IFRS ratio is defined by 52-112 as a financial measure disclosed that (a) is in the form of a ration, fraction, percentage or similar representation, (b) has a non-IFRS financial measure as one or more of its components, and (c) is not disclosed in the financial statements.
Working Capital
Working capital is a non-IFRS measure that is a common measure of liquidity but does not have any standardized meaning. The most directly comparable measure prepared in accordance with IFRS is current assets and net of current liabilities. Working capital is calculated by deducting current liabilities from current assets. Working capital should not be considered in isolation or as a substitute from measures prepared in accordance with IFRS. The measure is intended to assist readers in evaluating our liquidity.
Mine Operating Cash Flow before Taxes
Mine operating cash flow before taxes is a non-IFRS measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Mine operating cash flow is calculated as revenue minus production costs, transportation and selling costs and inventory changes. Mine operating cash flow is used by management to assess the performance of the mine operations, excluding corporate and exploration activities and is provided to investors as a measure of the Company's operating performance.
EBITDA
EBITDA is a non-IFRS financial measure, which excludes the following from net earnings:
- Income tax expense;
- Finance costs;
- Amortization and depletion.
Adjusted EBITDA excludes the following additional items from EBITDA:
- Share based compensation;
- Non-recurring impairments (reversals);
- Loss (gain) on Settlement of debt;
- Significant other non-routine finance items.
Adjusted EBITDA per share is calculated by dividing Adjusted EBITDA by the basic weighted average number of shares outstanding for the period.
Management believes EBITDA is a valuable indicator of the Company's ability to generate liquidity by producing operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures. Management uses EBITDA for this purpose. EBITDA is also frequently used by investors and analysts for valuation purposes whereby EBITDA is multiplied by a factor or "EBITDA multiple" based on an observed or inferred relationship between EBITDA and market values to determine the approximate total enterprise value of a Company.
EBITDA is intended to provide additional information to investors and analysts. It does not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for measures of operating performance prepared in accordance with IFRS. EBITDA excludes the impact of cash costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore is not necessarily indicative of operating profit or cash flow from operations as determined by IFRS. Other companies may calculate EBITDA and Adjusted EBITDA differently.
Realized Price per Ounce and Realized Price per Tonne
Realized price per ounce or per tonne are based on provisional prices received from the sales of gold, silver, zinc, copper and lead before price adjustments and treatment and refining charges.
Operating Cash Flow before Working Capital Changes
Operating cash flow before working capital changes per share is a non-IFRS measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.Operating cash flow per share is calculated by dividing cash from operating activities by the weighted average shares outstanding.Operating cash flow per share is used by management to assess operating performance on a per share basis, irrespective of working capital changes and is provided to investors as a measure of the Company's operating performance.
Cash Cost per Au/Eq Ounce, All-In Sustaining Cost per Au/Eq Ounce, All-In Cost per Au/Eq Ounce and Production Cost per Tonne
Cash costs per gold equivalent oz and production costs per tonne are measures developed by precious metals companies in an effort to provide a comparable standard; however, there can be no assurance that the Company's reporting of these non-IFRS measures and ratios are similar to those reported by other mining companies. Cash costs per gold equivalent ounce and total production cost per tonne are non-IFRS performance measures used by the Company to manage and evaluate operating performance at its operating mining unit, in conjunction with the related IFRS amounts. They are widely reported in the silver mining industry as a benchmark for performance, but do not have a standardized meaning and are disclosed in addition to IFRS measures. Production costs include mining, milling, and direct overhead at the operation sites. Cash costs include all direct costs plus royalties and special mining duty. Total production costs include all cash costs plus amortization and depletion, changes in amortization and depletion in finished goods inventory and site share-based compensation. Cash costs per gold equivalent ounce is calculated by dividing cash costs and total production costs by the payable gold equivalent ounces produced. Production costs per tonne are calculated by dividing production costs by the number of processed tonnes. The following tables provide a detailed reconciliation of these measures to the Company's direct production costs, as reported in its consolidated financial statements.
All-in Sustaining Costs ("AISC") is a non-IFRS performance measure and was calculated based on guidance provided by the
AISC includes total production costs (IFRS measure) incurred at the Company's mining operation, which forms the basis of the Company's total cash costs. Additionally, the Company includes sustaining capital expenditures, corporate general and administrative expense, operating lease payments and reclamation cost accretion. The Company believes this measure represents the total sustainable costs of producing silver and gold concentrate from current operations and provides additional information of the Company's operational performance and ability to generate cash flows. As the measure seeks to reflect the full cost of gold equivalent ounces from the zinc and lead concentrate production from current operations, new projects capital at current operation is not included. Certain other cash expenditures, including share-based payments, tax payments, dividends and financing costs are also not included.
The following tables provide detailed reconciliations of these measures to cost of sales by quarter and year to date.
1. |
Gold equivalents are calculated using an 88.72:1 (Ag/Au), 0.0005:1 (Au/Zn), 0.0018:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Q1 2024; 85.07:1 (Ag/Au), 0.0006:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Q4, 2023; 81.84:1 (Ag/Au), 0.0006:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Q3 2023; 81.80:1 (Ag/Au), 0.0006:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Q2 2023; 83.71:1 (Ag/Au), 0.0008:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Q1 2023. |
2. |
Cash cost per gold equivalent ounce includes mining, processing, and direct overhead. |
3. |
AlSC per oz includes mining, processing, direct overhead, corporate general and administration expenses, on-site exploration, reclamation, and sustaining capital. |
4. |
Production costs include mining, milling, and direct overhead at the operation sites. |
5. |
1.3616 and 1.3494 average FX rate for Q4 and YTD 2024, respectively, used to translate CAD$ to USD$ |
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