Excellon Resources Inc.

Excellon Resources Inc.

June 15, 2009 16:31 ET

Excellon Reports Positive Q3 Financial Results

TORONTO, ONTARIO--(Marketwire - June 15, 2009) - Excellon Resources Inc. (TSX:EXN) (the "Company" or "Excellon") reports net income of $621,288 for the three month period ended April 30, 2009. (For full details, please see the Company's Management Discussion & Analysis, which was filed on SEDAR, www.sedar.com, on June 15, 2009.)


- Excellon returned to profitability after successfully reorganizing its operations including its acquisition of Silver Eagle Mines Inc. (concluded on June 2)

- Completed a best efforts private placement financing for gross proceeds of $7,374,048

- Commenced shipments of concentrates in April

- Shipped 936 dry metric tons ("DMT") of lead-silver concentrate with payable metal of 231,559 ounces silver and 1,203,188 pounds lead (on a provisional basis)

- Shipped 1,257 DMT of zinc-silver concentrate with payable metal of 17,263 ounces silver and 1,260,693 pounds zinc (on a provisional basis)

- Earnings of $0.004 per share

Financial Highlights

The following are the financial highlights for the three and nine months ended April 30, 2009 and 2008.

Three months ended Nine months ended
30-Apr-09 30-Apr-08 30-Apr-09 30-Apr-08
----------- ----------- ----------- -------------

Sales $ 5,296,294 $ 9,661,688 $ 9,904,660 $ 23,867,728
Cost of production
amortization for 3
month period of
$226,183 (2008 -
$229,792); 9 month
period of $523,719
(2008 - $2,125,955)) 1,811,830 1,492,945 4,712,164 5,616,918
----------- ----------- ----------- -------------
3,484,464 8,168,743 5,192,496 18,250,810
----------- ----------- ----------- -------------

Non-cash items 528,379 725,457 4,102,726 2,518,289
expenditures 210,827 3,191,726 2,744,228 6,172,029
Other 2,035,140 3,582,081 4,877,940 7,393,085
Provision for (recovery
of) income taxes -
current 605,426 1,982,781 167,955 3,497,103
Provision for (recovery
of) income taxes -
future (516,596) 347,093 (530,566) 885,576
----------- ----------- ----------- -------------
2,863,176 9,829,138 11,362,283 20,466,082
----------- ----------- ----------- -------------
Net income (loss) for
the period $ 621,288 $(1,660,395) $(6,169,787) $(2,215,272)
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
Earnings (loss) per
share - basic $ 0.004 $ (0.011) $ (0.038) $ (0.015)
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
- diluted $ 0.004 $ (0.011) $ (0.038) $ (0.015)
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------

Cash provided by (used
in) operating
activities $(6,411,830) $(1,360,093) $(7,372,743) $ 1,183,964
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------

Cash, short-term
investments and
silver bullion $ 1,115,333 $ 2,699,168 $ 1,115,333 $ 2,699,168
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------

Working capital
surplus (deficiency) $ 5,656,088 $ (283,404) $ 5,656,088 $ (283,404)
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------

Corporate Developments

On March 20, 2009 the Company announced that it had entered into a definitive agreement with Silver Eagle Mines Inc. ("SEG") whereby the Company agreed to acquire all the outstanding common shares of SEG (the "Transaction"). Under the terms of the Transaction, SEG shareholders received 0.2704 common shares of the Company in exchange for each SEG share held. Total consideration was approximately 15 million Excellon common shares. The Transaction was completed by way of a statutory plan of arrangement under the Business Corporations Act (Ontario). SEG's primary asset is its fully permitted Miguel Auza mine, mill and adjacent properties located in Zacatecas State, Mexico (approximately 220 kilometres from the Company's Platosa Property). The completion of the Transaction was subject to, among other things, obtaining SEG shareholder approval (not less than 66 2/3% of the votes cast at a special shareholder meeting) and obtaining all required court and regulatory approvals.

In connection with the Transaction the Company provided SEG with a bridge loan of U.S. $500,000 plus any additional amounts that were required to facilitate the closing of the Transaction. As at April 30, 2009 the balance owing to Excellon on the bridge loan was $2,062,847. Secured by the shares of SEG's Mexican Subsidiary, San Pedro Resources, S.A. de C.V. As part consideration for providing the bridge loan, SEG agreed that, in the event that the Transaction was not consummated, SEG would provide the Company with the use of its mill at the Miguel Auza site for a period of one year on reasonable commercial terms.

On June 2, 2009 the Transaction was concluded successfully having gained the required SEG shareholder approval (97.3%) and having obtained all required court and regulatory approvals. Efforts continue to integrate the two companies and realize all possible efficiencies.

The Company's previously announced plan to construct its own mill at its Platosa site has been suspended indefinitely as it is now utilizing the Miguel Auza mill to process all ore produced from its Platosa mine. The Company is now producing approximately 150 tonnes per day (4,500 tonnes per month) at its Platosa mine and plans to increase production to 250 tonnes per day (7,500 tonnes per month) or more in early calendar 2010. The Miguel Auza mill can process approximately 300 tonnes per day of Platosa ore. The Company ceased its sales of crushed ore to Penoles at the end of January 2009 after the most recent contract expired.

The Company commenced production of two concentrates, a lead-silver concentrate and a zinc-silver concentrate, in March 2009 at the Miguel Auza mill and commenced sales of these concentrates in April 2009.

The Company has agreed to a three-month off-take agreement with Ocean Partners USA Inc. for the sale of its concentrates. The Company is in the final stages of negotiating terms for a long term off-take agreement for the period commencing July 1, 2009 and expects to complete an agreement imminently.

In April 2009 the Company successfully completed a best-efforts private placement financing for gross proceeds of $7,374,048, pursuant to which the Company issued 38,810,779 common shares.

On May 11, 2009 the Company announced its intention to carry out a rights offering to holders of common shares of Excellon (the "Rights Offering"). The Rights Offering entitles shareholders of record at the close of business on May 22, 2009 to one right for each common share held (each a "Right"). Eight (8) Rights will permit the holder to subscribe for one common share of Excellon at a price of $0.23 per share. In the event that the Rights Offering is fully subscribed, Excellon will receive gross proceeds of approximately $5,694,065 and 24,756,804 common shares of Excellon will be issued. The proceeds of the Rights Offering will be used for general working capital purposes, which could possibly include the recommencement of Excellon's exploration drilling program. The rights expire on June 18, 2009.

The Company's Chief Financial Officer, Mr. Jeffrey A. Hillis has resigned his position, effective June 19, 2009 to pursue another opportunity in the industry. The Company extends its gratitude to Mr. Hillis for his service. The directors of the Company have appointed Mr. Christopher J. Hopkins as Chief Financial Officer of Excellon. Mr. Hopkins has over 20 years of experience in financial management, strategic planning, mergers & acquisitions, corporate finance and financial and management reporting. The majority of his career has been spent in senior positions with publicly-listed companies, including Rio Algom Limited, Suncor Inc. and several junior mining and oil and gas companies. He received his Bachelor of Commerce degree from the University of Toronto, his Chartered Accountant designation from the Canadian Institute of Chartered Accountants (Ontario) and his Master of Business Administration from the Schulich School of Business at York University.

About Excellon

Excellon, a mineral resource company operating in Durango State, Mexico, is committed to building value through production, expansion and discovery. Excellon is producing silver, lead and zinc from the high-grade manto Indicated Mineral Resource on its large Platosa Property, strategically located in the middle of the Mexican silver belt. In calendar 2009, Excellon's focus is on expanding its operating capacity and increasing its Mineral Resources at Platosa through an aggressive exploration program. The Platosa Property, not fully explored, has several geological indicators of a large mineralized system. The equally large Miguel Auza property hosts a Probable Mineral Reserve, was the site of considerable historic mining for silver, (gold), lead and zinc and more recently was exploited by Silver Eagle during 2008. The exploration potential of Miguel Auza remains to be fully evaluated.


Peter Crossgrove, Chairman

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, the proposed construction of a mill, 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 April 14, 2008 NI 43-101-compliant technical report prepared by Scott Wilson 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.

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.

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