SECOND QUARTER 2010 HIGHLIGHTS
- Revenues for the quarter reached $2.9 million, bringing the total for the first six months to $6.6 million, up 37% for the six months ended June 30, 2009.
- Net earnings for the quarter reached $0.32 million ($0.01 per share), up 67% from the same period in 2009, or up 270% for the year to date at $0.96 million ($0.02 per share) from the same period in 2009.
- Mine operating earnings for the quarter reached $1.1 million, or $2.6 million for the first six months, up 40% from the six months ended June 30, 2009.
- Silver production for the quarter reached 186,890 oz, up 7% from the prior quarter.
- Average mill throughput in the second quarter was 363 tonnes per day ('tpd'), up 20% from 303 tpd in the second quarter 2009 and 14% from the prior quarter.
- Cash flows from operations before changes in non-cash working capital were $0.82 million, up 24% from $0.66 million in second quarter 2009, and up 86% for the six months ended June 30, 2010 from the same period in 2009.
- Financial position remained strong at $4.0 million in cash and cash equivalents, $6.1million in working capital with no long term debt.
| Three months ended June 30 | Six months ended June 30 | |||
|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | |
| Revenues | 2,947,808 | 3,403,606 | 6,649,349 | 4,860,394 |
| Mine Operating Earnings | 1,105,224 | 1,113,225 | 2,611,548 | 1,862,900 |
| Net Earnings | 320,013 | 190,773 | 957,785 | 258,628 |
| Earnings per Share | 0.01 | 0.00 | 0.02 | 0.01 |
| Cash Flow from Operations1 | 822,801 | 662,806 | 2,189,172 | 1,178,447 |
PRODUCTION
| Three months ended June 30 | Six months ended June 30 | |||
|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | |
| Total tonnes (t) produced | 33,033 | 27,618 | 62,127 | 57,187 |
| Tonnes produced per day (tpd) | 363 | 303 | 343 | 316 |
| Revenue per production tonne sold ($CDN) | $96.21 | $102.01 | $104.46 | $108.98 |
| Direct costs per production tonne ($CDN) | $53.60 | $61.56 | $54.25 | $57.23 |
| Silver production (oz) | 186,890 | 217,691 | 360,767 | 447,400 |
| Lead production (t) | 173 | 258 | 380 | 534 |
| Zinc production (t) | 249 | 269 | 521 | 612 |
| Silver sales (oz) | 172,039 | 388,475 | 389,005 | 489,952 |
| Lead sales (t) | 164 | 446 | 440 | 566 |
| Zinc sales (t) | 265 | 98 | 550 | 98 |
IMPACT achieved another profitable quarter despite lower than budgeted production resulting from inclement weather. Higher silver prices coupled with reduced operating costs put the Company in a position to revise cutoff grades and mine more medium grade ore. This resulted in an increase in the total tonnes of economic mineral available; however, metal production subsequently decreased. With the new Noche Buena mine operating at 45 tpd and ramping up production to 80-120 tpd, the mine will become a significant contributor to the overall throughput at the Guadalupe processing plant. Despite short term delays in bringing Noche Buena into production, the Company produced $0.82 million in positive operating cash flow and net earnings of $0.32 million for the quarter.
The Company continues to successfully produce silver from the Chivo Mine, San Ramon Mine and the new Noche Buena Mine. Production in the first half of 2010 increased from 323 tpd during the first quarter to 363 tpd in the second quarter. To handle additional throughput, the Guadalupe Processing Plant is undergoing upgrades including the addition of two sets of new flotation cells. With the upgrades to the processing plant to handle the additional mineral from the Noche Buena Mine, throughput in the plant is expected to steadily increase through 2010.
During the quarter, the Chivo Mine continued to be the main producer drawing mineral from Level 3. The mine provided 51% (Q2 2009 -- 92%) of mill feed. The access ramp has been completed to Level 4. During the quarter, the San Ramon Mine provided 37% (Q2 2009 -- 8%) of mill feed with increased production from the San Ramon Veins and the Chaparrita Vein. A large mineralized stockwork zone was discovered on the northern extension of the main mine workings. The stockwork averages 215 g/t silver and measures 60 meters long and 20 meters wide on Level 5.5 and 14 meters wide on Level 7. Further underground exploration is needed to define the full extent of this wide zone. The Noche Buena Mine provided 12% (Q2 2009- nil) of mill feed for the quarter. Initially producing from development muck in March 2010, it is projected to reach production of 80-100 tpd in the third quarter. The access ramp extends 133 meters and reached the first production level in June 2010, sourcing feed from the Noche Buena Vein averaging 230 g/t silver across three meters. Plans are to expand production to the newly identified Abalone Vein discovered 10 meters west of the Noche Buena Vein and averaging 200 g/t silver across two meters.
IMPACT's financial position remained strong with $4.0 million in cash and cash equivalents and net working capital of $6.1 million. The Company's working capital is expected to remain strong throughout 2010 as cash flow from mining operations should be sufficient to fund the Company's planned 2010 operating costs, and immediate exploration expenditures and equipment purchases.
EXPLORATION
IMPACT's technical team has continued to fast track project areas toward mine development and production. For most of the first half of 2010, drilling was devoted to the Capire-Aurora 1 project with 5,610 meters of infill and expansion drilling completed, testing extensions of the zone and confirming continuity of mineralization between the two bodies. The zone remains open for further expansion. An updated NI 43-101 Mineral Resource Estimate incorporating these new results is in progress. Based on results so far, Capire-Aurora 1 has the potential to become the Company's second production centre.
Elsewhere on the property, exploration drilling has resumed on targets in the Golondrinas-Chontalpan-Cuchara ("GCC") Sector near the Guadalupe processing plant. The Company's exploration team carried out geological mapping and geochemical sampling that lead to a reinterpretation of vein structures in the area in preparation for this drill program. The GCC Sector encompasses many old mining camps and as a result of this work, 25 distinct drill targets were defined. The intention of this drill program is to complete several holes in each of the higher priority targets to determine the width, grade and orientation of the veins. A second phase drill program will then be undertaken to provide detailed definition drilling on the most promising zones identified in the first pass program.
During the quarter, IMPACT was also pleased to announce a 32% increase in its Zacualpan-Mamatla mineral holdings to 623 square kilometers. These new claims are a big step in the consolidation of the region bringing most of the major historic mines under the control of one company for the first time in the 480-year history of the districts. A number of important veins and vein extensions crosscut these new concessions. Nine old mineral processing mills dating back to Spanish Colonial times are located in the general area of the new concessions indicating extensive historic mining activity.
George Gorzynski, P. Eng., a Qualified Persons under the meaning of Canadian National Instrument 43 101, is responsible for the technical content of this news release.
IMPACT Silver Corp. is a silver focused mining and exploration company operating in Mexico with a 623-square-kilometer mineral portfolio, including the producing silver operation at the Royal Mines of Zacualpan and the advanced Mamatla Mineral District, plus a portfolio of projects and an operational 200 tpd mill in the Zacatecas Silver District.
A recorded conference call can be accessed at our website on August 25, 2010: http://www.impactsilver.com/s/ConferenceCalls.asp
On behalf of the Directors of IMPACT Silver Corp.,
"Frederick W. Davidson"
President & CEO
For further information, please contact:
Sunny Pannu, Investor Relations
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.
1100-543 Granville Street
Vancouver, BC, Canada V6C 1X8
Telephone 604 681-0172
Facsimile 604 681-6813
www.IMPACTSilver.com
inquiries@IMPACTSilver.com
