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Excellon dips on operational issues

Canadian silver miner Excellon Resources (TSX:EXN) has provided disappointing production guidance for its Platosa mine, citing operational issues and lower byproduct prices for third-quarter production of only about 300,000 ounces of silver equivalent from the Durango state mine, in Mexico.
Excellon dips on operational issues Excellon dips on operational issues Excellon dips on operational issues Excellon dips on operational issues Excellon dips on operational issues

Excellon Resources is the highest-grade silver miner in Mexico

This reflects a marked departure from the norm, considering the 637,205oz of silver equivalent produced in the second quarter and 482,079oz in the first quarter.

The Toronto-based company, which mines one of Mexico's highest-grade deposits with grades as high as about 1kg silver per tonne of ore, also flagged issues related to surveying and planning personnel as dampening production.

Excellon says the operational issues have now been addressed and the operation is "getting back on track".

The company has been cautious about issuing production guidance for Platosa this year, as it works on a two-pronged mine optimisation plan to deal with mine-water ingress below the water table.

The company's balance sheet remains strong, which would allow the company to weather recent dips in commodity prices and quarterly production variability.

Exploration initiative

Surface drilling continues at Platosa with a drill rig currently testing targets in the same horizon that hosts the Platosa mine within the north-south trending Platosa corridor. The company intends to continue testing priority targets within this corridor while continuing to define new targets at Jaboncillo, PDN, Saltillera North and South and San Gilberto through its ongoing fieldwork programme.

The most recent drill results underscore the high-grade nature of the deposit, with diamond definition and expansion drilling of the 623 Manto returning 1,700 grams per tonne (gpt) silver, 15.4% lead, 21.4% zinc and 2.9gpt gold, or 3,613gpt silver equivalent over 5.5m.

Expansion and infill of the lower Rodilla Manto returned intercepts such as 397gpt silver, 2.6% lead, 4.1% zinc and 0.1gpt gold, or 714gpt silver equivalent over 10.5m.

Senior VP for geology Ben Pullinger says the underground drilling at Platosa continues to deliver "great results".

"We are especially encouraged by the elevated gold values and significant widths encountered in the drilling at the 623 Manto, which exceeded our expectations and are worthy of follow-up," he said.

Excellon's equity dipped to a new 12-month low early Tuesday to C93c a share, and closed 9.52% lower over the previous close Monday, giving the miner a market value of about C$93.65 million.