Pasinex Resources shared financial results for the first quarter of 2019. In parallel to expectation of the company, production from Horzum AŞ realized lower compared to the previous year and combined with lower realized zinc prices in 2019, consolidated net income was lower than 2018.
In 2019, Horzum AŞ produced 6,787 tonnes (wet weight) of direct shipping material with an average grade of 30% zinc. Mine production was down compared to previous year to 13,037 tonnes, reflecting difficulties in gaining access to the available ore.
Sales volumes of the company are down in first quarter of 2019 compared to same period of the previous year from 12,721 tonnes to 7,659 tonnes due to lower production. Pasinex stated that lower zinc sulphide sales volumes and lower LME zinc prices in 2019 caused Gross sales to be decreased to $4.3 million in Q1 2019 from $9.5 million in Q1 2018.
The company’s production forecast in Pinargozu is approximately 19,000 tonnes, equal to half of 2018 production, but in combination with the sale of inventory on hand at January 1, 2019 and the replenishment of inventory used by Akmetal there should be adequate cash flow to fund operations at Horzum AS as well as fund nondiscretionary spending at Pasinex for the next twelve months, the company stated.
The company will continue drilling through 2019 at Pinargozu to find a parallel oxide system in an effort to increase 2019 production.
Steve Williams, CEO of Pasinex commented, “Horzum AS produced as expected and managed its costs diligently so that a strong 59% margin was achieved in the quarter. Drilling continues at Pinargozu to find a parallel oxide system to improve the production estimates for the year.
Studies are on-going to determine the appropriate measures to mitigate the excess water at depth so that development can continue to access the higher grade sulphide material.
In May, we entered into a legal debt repayment agreement with Akmetal. The agreement
requires that a minimum repayment of the debt owing to Horzum As is made on a monthly basis and it strengthens certain control provisions within the joint venture agreement. We will adamantly make certain that Akmetal is maximizing the debt repayments owing to Horzum AS to provide sufficient cash flows to Pasinex.”
