Silvermet Inc.
TSX VENTURE : SYI

Silvermet Inc.

November 26, 2009 09:38 ET

Silvermet Announces Third Quarter Results

TORONTO, ONTARIO--(Marketwire - Nov. 26, 2009) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Silvermet Inc. ("Silvermet" or the "Company") (TSX VENTURE:SYI) is pleased to announce the release of its third quarter results. Financial statements and management's discussion and analysis of financial condition and results of operations ("MD&A”) can be found on SEDAR or the Company's website. The Company reports its financial results in US dollars.

The Company's Waelz kiln operations in Iskenderun, Turkey have been running since mid-May to recover zinc contained in electric arc furnace dust ("EAFD") that is produced as a waste product by local steel mills. During the third quarter, gross revenues were $1,589,329, and net income was $908,670. Treatment charges, direct operating costs and amortization were incurred against such revenues to result in a loss from operations of $113,994. The Company is continuing to make improvements at the plant to reduce downtime and increase operational efficiencies. During the quarter, the Company experienced an operating rate of 66% (61 days) resulting in production of 1,848 tonnes of saleable zinc concentrate.

Also during the quarter, Cooper Island Investments, LLC ("Cooper Island") exchanged its $2,000,000 loan for a 25% indirect equity interest in the Turkish operations on July 28, 2009. During the third quarter, the Company drew down a further $750,000 Cooper Island funding and raised $537,438 in a private placement of common shares. This had the effect of increasing the Cooper Island interest in the Turkish operations to 32.1%. A further draw down of $250,000 occurred on October 1st to increase the Cooper Island interest to 35.2%. As a result of these partial sales of its Turkish operations to Cooper Island during the third quarter, the Company recorded a gain on the sale of its share in a subsidiary of $1,503,776.

At the end of the third quarter, the Company had a negative working capital position of $2,293,787. Of this amount, $1,130,800 relates to a loan which comes due in February 2009, relating to liabilities taken on by Silvermet as part of the acquisition of the Iskenderun assets. The Company is seeking to refinance this amount. The Company is generating sufficient cash flow from operations to service other liabilities and the Company may draw down a further $1,000,000, at its discretion, under the Cooper Island financing facility at any time prior to March 31, 2010.

Notwithstanding the available sources of cash flows, the Company wishes to move forward with a number of capital projects, which will require additional funding. The Company is therefore exploring alternative sources of financing to fund these projects, which will further enhance efficiencies and throughput at the Iskenderun plant.

Management believes it has now laid the foundation for a cash flow positive operation by the end of the current year.

About Silvermet:

Silvermet's Waelz kiln operations in Iskenderun, Turkey have been operating since mid-May to recover zinc contained in the Electric Arc Furnace Dust ("EAFD") that is produced as a waste product by local steel mills.

Caution concerning forward-looking statements: The information in this release may contain forward-looking information under applicable securities laws. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied by the forward-looking information. Factors that may cause actual results to vary include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, political instability, currency fluctuations, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions or conditions in the financial markets and the inability to raised additional financing. Readers are cautioned not to place undue reliance on this forward-looking information. The Company does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events except as may be required under applicable securities laws. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

The TSX Venture Exchange has in no way passed upon the merits of the transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Silvermet Inc.
    Stephen G. Roman
    Chairman & CEO
    (416) 203-8336
    or
    Silvermet Inc.
    Rein A. Lehari
    President & COO
    (416) 203-8336
    www.silvermet.ca