VANCOUVER, BC, April 30, 2024– Luca Mining Corp. (“Luca” or the “Company”) (TSXV:LUCA) (OTCQX:LUCMF) (Frankfurt:Z68) is pleased to announce financial results for the three and twelve months ended December 31, 2023.
Production
Fourth Quarter 2023
- Total production amounted to 11,808 ounces of gold equivalent (“AuEq”), which was comprised of 3,155 ounces of gold, 155,763 ounces of silver, 2,730 tonnes of zinc, 671 tonnes of copper and 558 tonnes of lead.
- Out of the total production for Q4, Campo Morado accounted for 8,658 gold equivalent ounces, which is approximately 73% of the total production. Tahuehueto contributed 3,150 ounces of equivalent gold, representing 27% of the total production.
- The Company’s two plants processed a consolidated 130,210 tonnes of ore with average grades of 1.40 grams per tonne (“g/t”) for gold, 75.63 g/t for silver, 2.49%, 0.64% and 0.68% per tonne for zinc copper and lead respectively.
- Overall, grades increased by 52%, 16%, and 36%, for gold, silver and copper respectively, while grades for zinc and lead decreased by 9% and 1% respectively, over Q4 2022.
- Metallurgical recoveries improved substantially over the fourth quarter 2022, averaging 53.8% for gold, 49.2% for silver, 84.1% for zinc, 80.2% for copper and 62.6% for lead
- Cash Cost was US$1,244 per AuEq ounce and All In Sustaining Cost (“AISC”) was US$1,437 per AuEq ounce a decrease of 6% and 4% decrease respectively from Q3 2024. Production cost increase slightly to $78 per tonne in Q4 2023 from $77 per tonne in Q3 2023, a 1% increase.
Ramon Perez , President, and Interim CEO, commented, ” I am pleased to share some exciting updates regarding our recent financial performance and production milestones.
As we reflect on Q4 2023 results, it’s evident that our optimization initiatives at Campo Morado are yielding promising results. Additionally, despite being in the construction phase at Tahuehueto, we are already observing the early fruits of our labor.
We recently released our Q1 2024 production of 14,148 ounces of gold equivalent compared to 11,808 ounces of gold equivalent in Q4 2023 and can see the results of our hard work materializing.
The momentum at Tahuehueto remains strong as we continue to progress towards our ambitious goal of reaching 1,000 tons per day in commercial production. Furthermore, the optimization program at Campo Morado is advancing rapidly, further enhancing our operational efficiency.
Looking ahead, we anticipate that the positive trajectory observed in Q4 2023 and in Q1 2024 will persist throughout the second quarter and the remainder of the 2024 year. These developments affirm our commitment to driving growth and shareholder value creation.”
Full Year 2023
- Total production amounted to 55,719 ounces of gold equivalent, which comprised 11,832 ounces of gold, 688,125 ounces of silver, 15,243 tonnes of zinc, 2,618 tonnes of copper and 2,688 tonnes of lead.
- Campo Morado accounted for 43,089 gold equivalent ounces, which is approximately 77% of total production.
- The Company’s two plants processed a consolidated 665,132 tonnes of ore with average grades of 1.29 g/t for gold, 75.46 g/t for silver, 2.85%, 0.59% and 0.74% per tonne for zinc, copper and lead respectively.
- Overall, grades increased by 49%, 20%, 2%, for gold, copper and lead respectively and decreased for for zinc and silver by 7% and 4%, respectively, compared to the year ended December 31, 2022.
- Metallurgical recoveries for the 2023 year improved substantially over the 2022 year, averaging at 33.2% for gold, 46.3% for silver, 80.4% for zinc, 66.6% for copper and 54.3% for lead.
- Gold equivalents are calculated using an 83.02:1 (Ag/Au), 0.0006:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for 2023; and 83.49:1 (Ag/Au), 0.0008:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb)ratio for 2022, respectively.
- Cash cost per gold equivalent ounce include mining, processing, and direct overhead. See Reconciliation to IFRS on page 24 of the MD&A and below in this news release.
- AlSC per Au/Eq oz include mining, processing, direct overhead, corporate general and administration expenses, on-site exploration, reclamation and sustaining capital. See Reconciliation to IFRS on page 24 of the MD&A and below in this news release.
- See Reconciliation of earnings before interest, taxes, depreciation, and amortization on page 24. of the MD&A and below in this news release.
- Based on provisional sales before final price adjustments, treatment, and refining charges.
- Mine operating cash flow before taxes is calculated by adding back depreciation, and depletion to mine operating profit (loss). See Reconciliation to IFRS on page 23 of the MD&A and below in this news release.
- See Reconciliation to IFRS on page 24 of the MD&A and below in this news release.
Ramon Perez, President and Interim CEO, further commented, “We had a year of transformational achievements at our operations –and this has set the stage for transformational financial growth in 2024 and beyond. We are already seeing excellent growth in revenues and cash flow. Last year was a building year. We implemented a planned reduction in throughput at Campo Morado to carry out the CMIP and we continued to build out Tahuehueto. As the Company completes these projects, and ramps up production toward the end of 2024 and into 2025, the Company expects costs to decrease on a per tonne basis. We have an exciting new chapter ahead of us.”
About Luca Mining Corp.
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 Campo Morado mine, is an underground operation located in Guerrero State, a prolific mining region in Mexico. It produces copper-zinc-lead concentrates with precious metals credits. It is currently undergoing an optimisation program which is already generating significant improvements in recoveries and grades, efficiencies, and cashflows.
The Tahuehueto Gold, Silver Mine is a new underground operation in Durango State, Mexico, within the Sierra Madre Mineral Belt which hosts numerous producing and historic mines along its trend. The Company is commissioning its mill capacity to 1,000 tonnes per day, and key test work and production ramp-up is underway, to increase production by 2H 2024.
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”
Ramon Perez, President and Interim CEO
Qualified Persons
The technical information contained in this News Release has been reviewed and approved by Mr. Chris Richings, Vice-President Technical at Luca Mining as the Qualified Person for the Company as defined in National Instrument 43-101.
Cautionary Note Regarding Production Decisions and Forward-Looking Statements
It should be noted that Luca declared commercial production at Campo Morado prior to completing a feasibility study of mineral reserves demonstrating economic and technical viability. Accordingly, readers should be cautioned that Luca’s production decision has been made without a comprehensive feasibility study of established reserves such that there is greater risk and uncertainty as to future economic results from the Campo Morado mine and a higher technical risk of failure than would be the case if a feasibility study were completed and relied upon to make a production decision. Luca has completed a preliminary economic assessment (“PEA”) mining study on the Campo Morado mine that provides a conceptual life of mine plan and a preliminary economic analysis based on the previously identified mineral resources (see news releases dated November 8, 2017, and April 4, 2018).
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 Campo Morado; and other possible events, conditions or financial performance that are based on assumptions about future economic conditions and courses of action; the timing and costs of future activities on the Company’s properties, such as production rates and increases; success of exploration, development and bulk sample processing activities, and timing for processing at its own mineral processing facility on the Tahuehueto project site. In certain cases, Forward-Looking Information can be identified using words and phrases such as “plans,” “expects,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates” or variations of such words and phrases. In preparing the Forward-Looking Information in this news release, the Company has applied several material assumptions, including, but not limited to, that the current exploration, development, environmental and other objectives concerning the Campo Morado Mine and the Tahuehueto Project can be achieved; that the program to improve mining operations at Campo Morado will proceed as planned; the continuity of the price of gold and other metals, economic and political conditions, and operations. Forward-Looking Information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the Forward-Looking Information. There can be no assurance that Forward-Looking Information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-Looking Information. Except as required by law, the Company does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Neither 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.
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 itscomposition, 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 andselling 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 workingcapital 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 relationshipbetween 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.
Cash Cost per Au/Eq Ounce, All-In Sustaining Cost per Au/Eq Ounce and Production Cost per Tonne
Cash costs per silver equivalent oz and production costs per tonne are measures developed by precious metals companies in an effort to provide acomparable 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 silver 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 IFRSmeasures. 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 silver equivalent ounce is calculated by dividing cash costs and total production costs by thepayable silver 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 World Gold Council (“WGC”). WGC is not a regulatory industry organization and does not have the authority to develop accounting standards for disclosure requirements. Other mining companies may calculate AISC differently as a result of differences in underlying accounting principles and policies applied, as well as differences in definitions of sustaining capital expenditures. AISC is a more comprehensive measure than cash cost per ounce and is useful for investors and management to assess the Company’s operating performance by providing greater visibility, comparability and representation of the total costs associatedwith producing silver from its current operations, in conjunction with related IFRS amounts. AISC helps investors to assess costs against peers in the industryand help management assess the performance of its mine.
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 silver and gold concentrate production from current operations, new projects capital at current operation is not included. Certainother 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, as reported in notes to our consolidated financial statements:
- Gold equivalents are calculated using an 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; 84.37:1 (Ag/Au), 0.0007:1 (Au/Zn), 0.002:1 (Au/Cu) and0.0005:1 (Au/Pb) ratio for Q4 2022; 83.02:1 (Ag/Au), 0.0006:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Annual 2023: and 83.49:1 (Ag/Au), 0.0008:1 (Au/Zn), 0.002:1 (Au/Cu) and 0.0005:1 (Au/Pb) ratio for Annual 2022.
- Cash cost per silver equivalent ounce include mining, processing, and direct overhead.
- AlSC per oz include mining, processing, direct overhead, corporate general and administration expenses, on-site exploration, reclamation and sustaining capital.
- Production costs include mining, milling, and direct overhead at the operation sites.
- 1.3579 and 1.3020 average FX rate for Q4 and YTD 2024, respectively, used to translate CAD$ to USD$
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