18 King St. E, Suite 902
Toronto, Ontario, Canada M5C 1C4
FOR IMMEDIATE RELEASE
MAGNA GOLD REPORTS Q1 2021 OPERATING RESULTS
SAN FRANCISCO RAMP-UP NEARING COMPLETION AND ON TRACK TO RETURN TO FULL SCALE COMMERCIAL PRODUCTION BY JUNE 2021
Toronto, Ontario – April 13, 2021 – Magna Gold Corp. (TSXV: MGR, OTCQB: MGLQF) (“Magna” or the "Company") is pleased to announce its preliminary operating results for the three months ended March 31, 2021.
The operational ramp-up at the San Francisco mine has been progressing well. Production levels have benefited from the accelerated stripping program, which has increased productivity and efficiency at the mine. As a result, Q1 2021 has shown progressive month-to-month growth in gold production with 3,085 ounces in January, 2,670 ounces in February and 4,030 ounces in March. Magna continues to see growth in production post Q1 2021 and anticipates the mine will return to full scale commercial production by June 2021, starting H2 at a production run rate of over 6,000 ounces per month and exiting the year with over 7,500 ounces per month, resulting in meaningful growth to sustained free cash flow generation. Magna reiterates that it remains on track to achieve its 2021 production guidance of 55,000 to 65,000 ounces of gold.
Key operating highlights:
- Gold and silver production during the three months ended March 31, 2021 was 9,785 ounces and 8,093 ounces, respectively. Compared to the three months ended December 31, 2020, this represents a material increase of 31% and 76% to gold and silver production, respectively.
- Average gold grade of fresh ore processed from open pit over the three months ended March 31, 2021 was 0.32 g/t compared to an average gold grade of 0.25 g/t over the three months ended December 31, 2020, representing an increase of 28% largely driven by the accelerated stripping of waste.
- Gold placed on the leach pads, including ore from the open pits and from the underground mine development, during the three months ended March 31, 2021 was 12,177 ounces, representing an increase of 29% compared to 9,411 ounces placed on the pads during the three months ended December 31, 2020.
- Strip ratio over the three months ended March 31, 2021 was 8.4:1, representing a modest increase from a strip ratio of 6.9:1 over the three months ended December 31, 2020 due to the accelerated waste stripping program implemented by the Company. The strip ratio is expected to decline to 3.5 during H2 2021 once operational steady state is achieved and average 2.5 over the life-of mine.
- Ongoing operational improvements were realized from addressing the deficiencies of the past, including leach solution imbalances that affected costs and gold recoveries, as well as extensive repair and refurbishment of the plant and equipment, which had not received proper maintenance by the prior operator for an extended period of time.
Summary of Q1 2021 Operating Results
| Three Months Ended 31-Mar-21 |
Three Months Ended 31-Dec-20 |
Change | Change (%) |
|
| MINING | ||||
| Ore mined (dry kt) | 619 | 427 | 192 | 45% |
| Ore mined grade (g/t Au) | 0.34 | 0.30 | 0.04 | 13% |
| Waste mined (kt) | 5,195 | 2,954 | 2,241 | 76% |
| Total mined (kt) | 5,814 | 3,381 | 2,433 | 72% |
| Strip ratio | 8.40 | 6.92 | 1.48 | 21% |
| Avg. total mined (t/d) | 64,597 | 36,746 | 27,851 | 76% |
| CRUSHING AND PROCESSING | ||||
| Ore processed (kt) – From open pit | 611 | 416 | 195 | 47% |
| Ore processed grade (g/t Au) – From open pit | 0.32 | 0.25 | 0.07 | 28% |
| Ore processed (kt) – All sources | 744 | 746 | (2) | (0%) |
| Ore processed grade (g/t Au) – All sources | 0.51 | 0.39 | 0.12 | 31% |
| Gold placed on pad (ozs) – All sources | 12,177 | 9,411 | 2,766 | 29% |
| PRODUCTION | ||||
| Gold ounces produced (ozs) | 9,785 | 7,485 | 2,300 | 31% |
| Silver ounces produced (ozs) | 8,093 | 4,609 | 3,484 | 76% |
| Gold ounces sold (ozs) | 8,430 | 7,827 | 603 | 8% |
| Silver ounces sold (ozs) | 6,961 | 3,756 | 3,205 | 85% |
Mr. Arturo Bonillas, President & CEO of Magna commented, “We are extremely proud of our progress at San Francisco – our team has made considerable progress during ramp-up and we are well on our way to establishing San Francisco as a stable free cash flow generator. The evident turnaround of the San Francisco Mine, considered by many as an impossible task one year ago, shows our team’s resourcefulness and commitment to executing our mission to become a profitable precious metal producer. In addition to achieving commercial production at San Francisco in the coming months, we will remain focused on realizing further operational efficiencies, expanding mineral reserves and resources and seeking growth opportunities externally and within our significant pipeline of projects.”
The Company intends to provide an update to its ongoing drill program in Q3, which is already showing a positive potential impact to current internal 2021 and 2022 gold production expectations.
Qualified Person
James Baughman (P. Geo.), Consulting Geologist and a Qualified Person as defined by National Instrument 43-101 – Standard of Disclosure for Mineral Projects, has approved scientific and technical information in this news release.
About Magna Gold Corp.
Magna is a mineral exploration company focused on acquiring, exploring, developing and operating quality precious metals properties in Mexico. The primary strength of the Company is the team of highly experienced mining professionals with a proven track record of developing properties in Mexico from discovery to production on budget and on time.
Magna is a Mexico focused gold/silver exploration company that is committed to advancing its 100% owned highly prospective mineral properties located in Sonora and in Chihuahua. The Company’s shares trade on the TSXV under the trading symbol “MGR" and OTCQB under the trading symbol “MGLQF”. Magna employs community members and services in its operations.
ON BEHALF OF THE BOARD OF DIRECTORS
Arturo Bonillas
President and CEO
For further information, please visit the Company’s SEDAR profile at www.sedar.com or the Company’s corporate website at www.magnagoldcorp.com or contact us at telephone +52 (662) 310 0326, email info@magnagoldcorp.com.
THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION, NOR SHALL THERE BE ANY OFFER, SALE, OR SOLICITATION OF SECURITIES IN ANY STATE IN THE UNITED STATES IN WHICH SUCH OFFER, SALE, OR SOLICITATION WOULD BE UNLAWFUL.
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Cautionary Statements
This News Release includes certain “forward-looking statements” which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes, but is not limited to, the Company’s objectives, goals or future plans, statements, exploration results, potential mineralization, the estimation of mineral resources and reserves, exploration and mine development plans, production (including the timing of the commencement of commercial production and production guidance), processing and mining expectations, strip ratio forecasts, cash flow generation and estimates of market conditions. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to failure to identify mineral resources, failure to convert estimated mineral resources to reserves, the inability to complete a feasibility study which recommends a production decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital, operating and reclamation costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, and those risks set out in the Company’s public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.