Excellon Resources reports strong performance at the Platosa silver mine

Silver producer Excellon Resources (TSX EXN / NYSE EXN / MRS E4X2) has excellent news from its Platosa mine in Mexico. The production results of the third quarter are more than impressive!

The silver equivalent production in the September quarter, the first quarter after the Corona-related production stops in Mexio, increased significantly compared to the previous year’s result. As Excellon announced, the output reached 524,312 ounces of silver equivalent and was thus 23% above the result for the same quarter of 2019 (427,131 ounces).

With 326,909 ounces of silver (plus 27%), the company recorded the highest silver production on a quarterly basis since the second quarter of 2014! As Excellon also announced, lead production (+ 71% to 2.2 million pounds) and zinc output (+ 66% to 2.7 million pounds) also increased significantly. In addition, the company reported that the number of tons of ore mined on Platosa (21,877 tons) was set in the third quarter.

And, last but not least, Excellon signed a new contract to supply electricity to the Platosa mine. It is hoped that this will result in savings in this largest, operational cost pool.

No wonder, then, that Excellon CEO Brendan Cahill describes the performance of the operations team as “outstanding” in all areas – especially since the mine first had to be brought back into production and at the same time the employees had to be protected from COVID19. With regard to the new electricity contract, which is tied to the price of natural gas, the Excellon boss expects “much lower” prices in this important cost area in the future. According to Mr Cahill, this will also have an impact on the overall costs.

Excellon also achieved improvements on Platosa in the third quarter in terms of costs for consumables and personnel, as well as efficiency in mining and extraction, and with regard to the reliability of the equipment. Among other things, it was also possible to stabilize the operation of the processing plant and increase the recovery rates – a very important factor – which, according to the company, led to lower costs per unit of production. As Excellon said, the future will continue to focus on optimizing operations, which in conjunction with the expected lower energy prices on Platosa should continuously improve the profitability of the mine. An indication of how Excellon is doing, the company will provide on November 13th, when the quarterly figures are presented.

Delayed drilling results from Saxony

The drilling results from Saxony, where Excellon has been drilling on the Silver City project near Freiberg since July, as planned, have not yet made good progress. Unfortunately, there were massive delays in receiving the results of these activities, which is currently a problem for the entire industry. The drill core samples were delivered from Freiberg in preparation for the external setup of the laboratory in Poland and then flown to the central laboratory in Canada. This, together with COVID19-related problems and the current strong demand for drill core analysis, has led to the delays. Excellon will submit the drilling results from Saxony as soon as possible once received.

While these delays are regrettable given the potential of Silver City (we reported), we rate the news from Platosa as consistently positive. If Excellon can continue to increase productivity and reduce costs in the future – and the price of silver remains high – the profitability of the mine could increase significantly.

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