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Last updated on April 17, 2014 at 12:12 EDT

Excellon reports net earnings of $3 million during third quarter 2013

November 5, 2013

TORONTO, Nov. 5, 2013 /PRNewswire/ – Excellon Resources Inc. (TSX:EXN) (OTC:EXLLF) (“Excellon” or
the “Company”)
, Mexico’s highest grade silver producer, is pleased to report financial results for the third quarter of 2013.

Q3 Highlights

        --  Net earnings of $3 million ($0.05/share)
        --  Cash flow from operations of $4.8 million ($0.09/share) before
            changes in working capital
        --  Sales of 603,666 silver-equivalent ounces (9-mos - 1,524,727
            silver-equivalent ounces), including 452,040 oz Ag, 1,969,259
            lb Pb and 2,074,088 lb Zn
        --  Net cash costs per silver ounce produced of $7.77 (9-mos -
            $8.77)
        --  All-in costs per silver equivalent ounce sold of $10.65 (9-mos
            - $15.60)
        --  Cash corporate administrative costs reduced by 37% versus Q2
            2013
        --  Cash, marketable securities and current accounts receivable
            totaled $9.7 million at September 30, 2013
        --  Working capital totaled $11.7 million at September 30, 2013

“During the third quarter, despite realized silver prices of $21.40 we
generated positive cash flow and profits from our La Platosa Mine,”
stated Brendan Cahill, President and Chief Executive Officer. “Silver
grades of almost one kilogram per tonne, improved tonnage and decreased
costs contributed significantly to our performance. We took steps
early in the quarter to reduce costs, particularly at our corporate
office, and began the process of improving our production profile. We
are now well positioned to generate profits at current silver prices,
while building our cash reserves and preparing to resume exploration
early in 2014.”

Financial and Operating Highlights

Financial results for the three and nine month periods ended September
30, 2013 and 2012 are as follows:


          ('000's of USD, except
           amounts per share                              9-Mos       9-Mos
                 and per ounce)   Q3 2013   Q3 2012        2013        2012

    Revenue                        11,645        60      25,887      27,160

    Cost of sales                 (5,389)   (3,958)    (17,355)    (14,176)

    Gross profit (loss)             6,256   (3,898)       8,532      12,984

    Expenses:                                                              

      Corporate administration    (1,053)   (1,386)     (4,383)     (5,484)

      Exploration                   (299)   (1,679)     (6,506)     (6,257)

      Other (incl. finance cost)    (614)     1,440       (310)       1,102

    Income tax                    (1,288)     1,173          33       (597)

    Net income (loss)               3,002   (4,350)     (2,634)       1,748

    Earnings per share - basic       0.05    (0.08)      (0.05)        0.03

    Cash flow from operations (1)   4,766   (4,423)         910       3,507

    Cash flow from operations per    0.09    (0.08)        0.02        0.06
    share - basic

    Net cash cost per silver         7.77     17.75        8.77        5.31
    ounce produced ($/Ag oz)

    All-in costs per silver         10.65     40.81       15.60       14.60
    equivalent ounce sold
    ($/Ag eq. oz)

    (1)     Cash flow from operations before changes in working capital

After tax net income during the third quarter resulted from improved
silver grades relative to the second quarter and the relative
stabilization of silver prices compared to the second quarter, during
which the Company reported a charge against revenue of $3 million due
to the decrease in silver prices during that period. Net income
included (i) an unrealized gain of $0.4 million from an increase in the
fair value of Sprott Physical Silver Trust units held by the Company,
representing an underlying investment in 134,732 ounces of silver and
(ii) a charge against revenues of approximately $120,000 upon final
settlement of sales of concentrate delivered at higher prices prior to
the third quarter.

Working capital increased 74% during the quarter to $11.7 million at
September 30, 2013 ($6.7 million at June 30, 2013). Cash, marketable
securities and current accounts receivable increased 102% to $9.7
million ($4.8 million at June 30, 2013). Accounts payable increased 4%
to $4.9 million ($4.7 million at June 30, 2013); these payables
currently stand at $2.3 million.

Cash corporate administration expenses decreased by approximately
$427,000 or 36% during the third quarter of 2013 relative to the same
period in 2012 and decreased by $457,000 or 37% relative to the second
quarter of 2013 as the Company implemented cost reduction measures in
the corporate head office in Toronto. Salaries and wages, in
particular, decreased by 32% and 44% relative to the 3-month and
9-month comparative periods of 2012, respectively, and 27% relative to
the second quarter of 2013.

Exploration expenses were limited during the quarter and included mining
exploration tax credit reimbursement of approximately $400,000 for
drilling conducted on the Beschefer project in Quebec during 2012. Due
to current silver prices and market conditions, the Company is not
currently drilling at La Platosa, though drill rigs remain on site and
available to resume drilling. The Company expects to resume mantos
exploration at La Platosa during the first quarter of 2014.

Cash cost per silver ounce produced net of by-products improved to $7.77
during the quarter versus $17.75 in the third quarter of 2012 and
$12.07 in the second quarter of 2013. All-in cost per silver
equivalent ounce sold improved to $10.65 during the quarter versus
$40.81 in the third quarter of 2012 and $21.01 in the second quarter of
2013. Higher costs during the comparable period in 2012 were caused by
an illegal blockade that prevented production in that period.

Relative to the second quarter of 2013, net cash costs and all-in costs
were reduced due to improved production in terms of both milled tonnage
(16,707 in Q3 versus 13,608 in Q2) and silver grades (975 g/t in Q3
versus 627 g/t in Q2). All-in costs were reduced due to significant
reductions in corporate administration expenditures as well as reduced
exploration costs during the period. The Company believes that further
decreases in production costs are attainable as, during the third
quarter, (i) significant expenditures were made on electricity to
manage water inflows in the 6A Manto, (ii) lead and zinc grades in the
areas mined during the quarter were low, reducing by-product credits
and silver equivalent ounces, and (iii) recoveries were lower than in
recent quarters (see Operating Highlights for a further discussion).
The Company expects these factors to contribute less to costs during
the fourth quarter of 2013.

All financial information is prepared in accordance with IFRS, and all
dollar amounts are expressed in U.S. dollars unless otherwise
specified. The information in this news release should be read in
conjunction with the Company’s unaudited condensed consolidated interim
financial statements for the three and nine months ended September 30,
2013 and associated management discussion and analysis (“MD&A”) which
are available from the Company’s website at www.excellonresources.com and under the Company’s profile on SEDAR at www.sedar.com.

The discussion of financial results in this press release includes
reference to “cash flows from operations before changes in working
capital items”, “cash cost per silver equivalent ounce produced net of
byproducts” and “all-in cost per silver equivalent ounce sold,” which
are non-IFRS performance measures. The Company presents these measures
to provide additional information regarding the Company’s financial
results and performance. Please refer to the Company’s MD&A for the
three and nine months ended September 30, 2013, for a reconciliation of
these measures to reported IFRS results.

Production Highlights

Mine production for the three and nine months periods ended September
30, 2013 and 2012 was as follows:


                                       3 months ended                     9 months ended
                                          Sept. 30,                          Sept. 30,

                                     2013*            2012             2013*              2012

    Tonnes of ore produced          18,271           1,627            50,010            35,357

    Tonnes of ore                   16,707           2,151            48,676            36,747
    processed

    Ore grades:                                                                               

                Silver                 975             750               733               876
                (g/t)

                Silver               28.43           21.87             21.38             25.55
                (oz/T)

                Lead (%)              6.61            6.18              6.52              6.79

                Zinc (%)              7.51           10.70              9.27             11.99

    Recoveries:                                                                               

                Silver (%)            92.4            95.2              93.7              93.1

                Lead (%)              79.7            87.1              82.9              81.0

                Zinc (%)              79.4            88.4              82.1              85.5

    Production:                                                                               

                Silver -           454,573          19,545           998,575           830,100
                (oz)

                Silver             607,252          45,923         1,510,138         1,295,142
                equivalent
                ounces
                (oz)(1)

                Lead -          1,921, 547         278,529         5,621,805         4,338,092
                (lb)

                Zinc -           2,149,884         424,900         8,019,890         8,063,029
                (lb)

    Sales:                                                                                    

                Silver             452,040          44,043         1,009,875           826,438
                ounces -
                (oz)

                Silver             603,666          85,118         1,524,727         1,290,588
                equivalent
                ounces
                (oz)(1)

                Lead -           1,969,259         401,678         5,706,170         4,314,303
                (lb)

                Zinc -           2,074,088         693,657         8,023,228         8,063,029
                (lb)

    Realized
    prices: (2)

                Silver -             22.54           28.94             21.84             29.75
                ($US/oz)

                Lead -                0.96            0.88              0.94              0.87
                ($US/lb)

                Zinc -                0.84            0.86              0.85              0.89
                ($US/lb)

          Q3 data remains subject to adjustment following settlement with
    *     concentrate purchaser, Q2 and Q1 data has been adjusted to
          reflect settlement with concentrate purchaser.

          (1)      Silver equivalent ounces established for each period
                   using prices of US$24 per oz Ag, US$0.90 per lb Pb, and
                   US$0.90 per lb Zn applied to the recovered metal content
                   of the concentrates.

          (2)      Average realized price is calculated on current period
                   sale deliveries and does not include prior period
                   provisional adjustments in the period.  A complete
                   reconciliation of net realized prices is set out in the
                   Company's Q3 2013 MD&A.

    Note:   "t"= tonne;  "T"= ton

Production during the quarter was primarily from the Guadalupe South and
6B Mantos. Recoveries decreased slightly during the third quarter due
to (i) significant remnant grouting from historical water management
measures, (ii) oxide mineralization in the 6B Manto, and (iii) closer
than usual lead and zinc grades. These conditions are expected to
improve as more available ore from other mantos is blended into the ore
mined from 6B. The Company is currently mining four to six faces in
6A, 6B and Guadalupe South. During the coming months, the Company
expects to open new faces in the Guadalupe South and 623 mantos, with
the Rodilla Manto expected to be accessed in 2014.

Outlook

Excellon is targeting 2013 production of 1.4 million ounces of silver,
7.4 million pounds of lead and 9.8 million pounds of zinc or 2.1
million silver equivalent ounces (based on $24 silver, $0.90 lead and
$0.90 zinc) at a targeted all-in cost of $14.00 per silver equivalent
ounce sold.

Though still assessing the potential impact of recent tax reforms in
Mexico, the Company currently holds US$21 million in loss
carry-forwards in its Mexican subsidiaries that may be applied against
future taxable earnings.

About Excellon

Excellon’s 100%-owned and royalty-free La Platosa Mine in Durango is
Mexico’s highest grade silver mine, with lead and zinc by-products
making it one of the lowest cash cost silver mines in the country. The
Company is positioning itself to capitalize on undervalued projects by
focusing on increasing La Platosa’s profitable silver production and
near-term mineable resources.

Additional details on the La Platosa Mine and Excellon’s exploration
properties are available at www.excellonresources.com.

Forward-Looking Statements

The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of the content of this
Press Release, which has been prepared by management. This press
release contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 27E of the Exchange Act.
Such statements include, without limitation, statements regarding the
future results of operations, performance and achievements of the
Company, including potential property acquisitions, the timing,
content, cost and results of proposed work programs, the discovery and
delineation of mineral deposits/resources/reserves, geological
interpretations, proposed production rates, potential mineral recovery
processes and rates, business and financing plans, business trends and
future operating revenues. Although the Company believes that such
statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Forward-looking statements are
typically identified by words such as: believe, expect, anticipate,
intend, estimate, postulate and similar expressions, or are those,
which, by their nature, refer to future events. The Company cautions
investors that any forward-looking statements by the Company are not
guarantees of future results or performance, and that actual results
may differ materially from those in forward looking statements as a
result of various factors, including, but not limited to, variations in
the nature, quality and quantity of any mineral deposits that may be
located, significant downward variations in the market price of any
minerals produced [particularly silver], the Company’s inability to
obtain any necessary permits, consents or authorizations required for
its activities, to produce minerals from its properties successfully or
profitably, to continue its projected growth, to raise the necessary
capital or to be fully able to implement its business strategies. All
of the Company’s public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the
technical reports filed with respect to the Company’s mineral
properties, and particularly the November 22, 2011 NI 43-101-compliant
technical report prepared by Roscoe Postle Associates Inc. with respect
to the Platosa Property. This press release is not, and is not to be
construed in any way as, an offer to buy or sell securities in the
United States.

SOURCE Excellon Resources Inc.


Source: PR Newswire