Vancouver, British Columbia, October 25, 2019
Telson Mining Corporation (“Telson” or the “Company” (TSX.V-TSN, OTC Pink-SOHFF, Frankfurt-TSGN (formerly SQ82)) is pleased to announce that as a result of an improving market price for zinc and improved relations within the local community that it will recommence mining operations at Campo Morado.
All necessary steps are being taken to restart mining and milling operations at the project commencing immediately with transporting for delivery and sale of lead and zinc concentrates stored on site to the port of Manzanillo. Over the next 4 weeks the mine will be taken out of care and maintenance and brought back into production such that the Company anticipates initiating full mining and processing operations near the beginning of December 2019.
"We are very pleased that we have achieved the conditions to restart productive operation in Campo Morado. The mine is ready to produce mill feed for more than 2 years without new underground development. During the care and maintenance period the processing plant received full maintenance and the crusher and SAG mill had new liners installed” states Antonio Berlanga, CEO, “With the addition of new reagents, we hope to increase the gold and silver recovery in the flotation concentrates and we will continue refining the testing process to potentially recover precious metals from the existing tailings and as soon as funding allows, advance the Leachox Process through second phase testing to determine the viability of installing this proven technology at Campo Morado (see news release dated April 1st 2019). First phase Leachox testing achieved up to 60% gold and 80% silver recoveries at Campo Morado and has the potential to transition Campo Morado from a base metal producer into a silver and gold precious metal producer such as it historically was”.
“Estamos muy contentos de que finalmente tengamos las condiciones para reiniciar operaciones productivas en Campo Morado. La mina está preparada para producir por más de 2 años sin nuevos desarrollos subterráneos. Durante el periodo de cuidado y mantenimiento, la planta recibió un mantenimiento completo y la quebradora y molino cuentan con enlainado nuevo.” Menciona Antonio Berlanga, CEO. “Con la adición de nuevos reactivos, esperamos incrementar la recuperación de oro y plata en los concentrados de flotación y continuaremos afinando las pruebas para el proceso de recuperar metales preciosos en los jales. Adicionalmente, en cuanto el fondeo lo permita, avanzaremos los estudios del Proceso Leachox a una segunda etapa para analizar la viabilidad de implementar esta tecnología en Campo Morado (ver News Release del 1º de abril de 2019). La primera etapa de estas pruebas alcanzaron recuperaciones en oro de hasta un 60% y de 80% en la plata en Campo Morado lo que puede generar el potencial para convertir Campo Morado de una mina de metales base a un productor de oro y plata, como históricamente lo fue”.
Nyrstar Loan Default Notice
As a result of suspending mining operations at Campo Morado in August 2019 under force majeure conditions, Telson has been without cash flows resulting in nonpayment under the loan agreement dated June 12, 2018, as amended, with Nyrstar Canada (Holdings) Ltd. This has resulted in Nyrstar issuing to the Company a notice of default and demand for payment. Telson’s outstanding debt under this loan agreement including principal and interest is approximately US$6 million.
Telson has attempted to contact Nyrstar to discuss this situation and seek abeyance of any potential default proceedings. It is important to note that to date, no proceedings have been initiated by Nyrstar. Once Campo Morado is put back into commercial production, Telson expects to be able to recommence outstanding payments to Nyrstar and in the meantime is exploring other financing alternatives.
Telson Mining Corporation is a Canadian based mining company with two 100% owned Mexican gold, silver and base metal mining projects.
Telson's Tahuehueto mining project, located in north-western Durango State, Mexico is currently under development and waiting for final funding to complete construction of the processing plant and related assets to produce concentrates in its own on-site mineral processing plant, with a designed capacity of at least 1,000 tonnes per day and subject to funding is targeting completion of construction during Q2 2020. Pre-production toll milling is underway with plans to process 3,000 to 5,000 tonnes of ore on a monthly basis until it’s own on-site 1,000 tpd processing plant is operational, where construction has advanced to approximately 70% completion.
Campo Morado is a polymetallic base metal mine with mining and milling equipment capable of producing up to 2,500 tonnes per day. Four months after purchasing Campo Morado, Telson brought the mine back into operation initiating preproduction in October 2017 and declared commercial production in May 2018, operating the mine continuously for 22 months until August 2019 when the project was put on care and maintenance as a result of declining zinc prices and community issues. With improving current conditions Telson effective immediately is bringing the mine out of care and maintenance and will be reinitiating mining operations as soon as possible over the coming weeks.
This press release was prepared under the supervision and review of Ralph Shearing, P.Geol., President and Director of Telson Mining Corporation, a Professional Geologist registered in Alberta as a member of the professional association APEGA, and a Qualified Person as defined by NI 43-101.
On Behalf of the Board of Directors
(signed) “Antonio Berlanga”
Antonio Berlanga, CEO and Director
Cautionary Note Regarding Production Decisions and Forward-Looking Statements
It should be noted that Telson has 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 Telson’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 was completed and relied upon to make a production decision. Telson 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 Release dated November 8, 2017 and April 4,2018).
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 recommencement of mining operations at Campo Morado; the ability to recommence outstanding payments to Nyrstar; 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 by the use of 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 recommencement of operations at Campo Morado will proceed as planned; that discussions with Nyrstar and the abeyance of any potential default proceedings will be completed in a timely manner and on reasonable terms, 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.
For further information about Telson Mining Corporation, please contact:
Corporate Communications Manager
Tel: +1 (604) 684-8071