- Excellon Resources (TSX:EXN) reported a net loss of C$10 million over 2019, compared to a $7.7 million loss in 2018
- The company stated that higher electricity costs, treatment and refining charges, and lower base metal prices negatively impacted company cash-flow
- Consequently, Excellon has entered in an energy agreement, beginning in Q2 2020, to reduce electricity costs by 20 per cent
- The company hopes to turn a marginal profit by the end of 2020, but this depends on the volatile market stabilising over the coming months
- Excellon Resources (EXN) is up 3.77 per cent, with shares trading for $0.55 and a market cap of $61.9 million
Mining company, Excellon Resources (TSX:EXN) has deepened its losses in 2019, according to its full-year financial results.
The company reported a net loss of C$10 million over 2019, compared to a $7.7 million loss in 2018.
Excellon attributes these losses to a number of external factors not related directly to its mining operations.
Company President and CEO, Brendan Cahill, outlined the cash-flow challenges that are keeping Excellon in the red.
“Despite metal production increases, higher electricity costs, treatment and refining charges, and lower base metal prices continue to significantly impact costs.
“With the current global energy environment and rapidly changing outlooks for precious and base metal prices, we expect external factors to move in our favour over the coming 12-18 months,” he said.
However, some financial markers did improve over the course of the year. Revenue was up by $2 million, to $26.5 million, implying some growth for the company.
Furthermore, two of the company’s assets, The Platosa Silver Mine and Miguel Auza Mill beat previous production records.
In an attempt to offset poor energy prices, Excellon has entered into an agreement with a Mexico-based energy provider. The agreement will commence in 2020’s second quarter, and should reduce the company’s energy costs by 20 per cent.
Excellon is also instigating a number of cost efficiency initiatives. These include improved maintenance and resource planning systems.
With these plans in place, the company hopes to turn a slight profit by the end of 2020.
However, this assumes that market conditions will remain largely the same over the next 9 months. Given the ongoing uncertainty surrounding COVID-19 and the increased volatility already seen in the market, stability may be unlikely.
Excellon Resources (EXN) is up 3.77 per cent, with shares trading for $0.55 at 11:45am EST.