Campo Morado Improves its Financial and Operating Performance

Telson Mining Corporation released its financial and operating results for 1Q21, reporting that this quarter the company had a better operating performance than in 4Q20. Telson explained that with its new financing and restructuring of its debt and board, the company is expecting to deliver strong results throughout the year.

Telson is a Canadian mining company and has two mining projects in Mexico: Tahuehueto in Durango and Campo Morado mine in Guerrero. Tahuehueto is a gold mine that is 60 percent complete. Recently, the company announced it will receive a US$25 million financing package that will be used for the construction of the project and will provide working capital.

The CAPEX investment required to complete construction and start using the mine is US$15.4 million; US$12.6 million for equipment and construction and US$2.8 million to support operations until the mine has a positive cash flow. Telson expects to begin pre-production in late 2021 and have full production capacity by 1Q22.

Campo Morado is a polymetallic base metal mine that produces an average of 2,100 t/d and is the sixth largest zinc producer in Mexico. During 2020 it achieved gross sales for a total of US$4.4 million; 27,864 tons of zinc and 5,926 tons of lead concentrates were sold; the processed mineral was 454,624 tons; 343,141 tons were extracted; and 28,031 tons of zinc concentrate and 5,794 of lead concentrate were produced.

The company announced that the mine's operating profit increased to US$5.25 million in 1Q21 compared to a loss of US$.26 million it had in the last quarter. Additionally, gross revenues increased to US$21.2 million compared to the US$19 million obtained in 4Q20.

Total ore processed increased to 174,382 tons compared to 168,310 tons processed in the last quarter; zinc production increased to 11,013 tons compared to 9,974 tons in in 4Q20; the average price of zinc per ton also increased to US$2,687 compared to the US$2,360 price in 4Q20 and recoveries increase to 74 percent compared to 69 percent in 4Q20.

Improving production and recoveries at Campo Morado has been a constant objective for the company.  At Mexico Mining Forum 2021, Ralph Shearing, Telson's President and CEO, said that the company has managed to get higher recoveries using so-called Leachox testing, which can improve recoveries from current levels of gold at 15-20 percent and silver 30-40 percent.

“Campo Morado operating figures have improved significantly over the last year, this along with cost reduction initiatives and increased metal prices have resulted in strong results reported for 1Q21,” said Omar Garcia Abrego, Telson Mining Corporation  CFO.

García explained that the company is well positioned and is expected to have a very successful year with secured financing for the completion of the construction of the Tahuehueto mine and the pending restructuring of the company's debt, which will allow it to continue delivering solid results to all shareholders.