VANCOUVER, BC, Aug. 9, 2024 /CNW/ - Filo Corp. (TSX:FIL) (Nasdaq First North Growth Market: FIL) (OTCQX:FLMMF) ("Filo", or the "Company") announces its results for the three and six months ended June 30, 2024. View PDF Jamie Beck, President & CEO, commented, "We are very happy to have announced the Company's transaction with BHP and Lundin Mining, which delivers compelling value to Filo's shareholders. Our exploration success has been unmatched since the Company was originally spun-out in 2016, and now is the right moment to hand the project off to its next stewards to maximize the potential of this remarkable discovery. With respect to our ongoing field program, despite temporarily halting drilling operations during the second quarter due to inclement weather, assays released during the quarter continue to demonstrate the size and scale of the Filo del Sol deposit. Eight holes were underway when operations were suspended due to winter conditions and full results from these holes will be released once they've been completed and assays received. We look forward to drilling again once site conditions allow for a safe resumption of activities." Q2 2024 Highlights During and subsequent to the second quarter of 2024, the Company's highlights included: On July 29, 2024, the Company announced that it has entered into a binding arrangement agreement (the "Arrangement Agreement") with BHP Investments Canada Inc. ("BHP") and Lundin Mining Corporation ("Lundin Mining", and together with BHP, the "Purchaser Parties") whereby the Purchaser Parties will acquire all of the outstanding common shares of Filo that they do not already own through a plan of arrangement (the "Transaction") for total consideration of Canadian dollars ("$CAD") 4.1 billion ($CAD 33.00/share) through a combination of cash and Lundin Mining shares. The Transaction is expected to be completed in the first quarter of 2025, subject to the satisfaction of closing conditions. Concurrent with entering into the Arrangement Agreement, Filo and each of the Purchaser Parties (or their affiliates) entered into a subscription agreement pursuant to which they subscribed for 3,484,848 Filo Shares at an issue price of $CAD 33.00 per Filo Share, or approximately $CAD 115.0 million in the aggregate (the "Concurrent Private Placement"). The Concurrent Private Placement was not conditional on completion of the Transaction and was completed on August 7, 2024. Please refer to the Company press release dated July 29, 2024 for more information; Assay results announced for hole FSDH114, which intersected 1,460.0m at 0.45% CuEq from 92.0m including 26.0m at 1.22% CuEq from 1,176.0m, confirming the northern expansion of the Bonita Zone first seen with hole FSDH108, leaving the deposit open to the north and confirming a minimum width of 600m in this area; Assay results announced for hole FSDH112, which intersected 1,036.0m at 0.65% CuEq from 96.0m including 472.5m at 1.02% CuEq from 659.5m, expanding the high-grade zone first drilled in the Bonita Zone with FSDH091 and suggests it may be contiguous with the Aurora Zone over 900m to the southwest; In May 2024, notice was provided to the Company by NGEx Minerals Ltd. ("NGEx") and Lundin Mining Corporation ("Lundin Mining") to jointly buy-back two thirds of the existing 3% Net Smelter Royalties ("NSR") attached to three mineral claims (Nacimiento 1, Nacimiento 2, and Vicuña 4) in San Juan Province, Argentina which cover NGEx's Lunahuasi and Lundin Mining's Cumbre Verde copper-gold-silver projects. In consideration for the joint repurchase, the Company received gross cash consideration of $2.0 million. Following completion of the transaction, the Company retains a 1% NSR over the claims; and The Company temporarily halted drilling operations during the second quarter of 2024 due to poor weather conditions which prevented safe operations. The Company has demobilized all non-essential personnel from site and triggered standby provisions with drilling-related contractors. Drilling is expected to recommence in the third quarter of 2024. 2024 Drilling and Assay Results Drilling and assay results disclosed by the Company during and subsequent to the six months ended June 30, 2024 are summarized in Appendix 1 to this news release. Outlook Drilling activities are expected to recommence at the Filo del Sol Project during the third quarter of 2024. The Company and its drilling-related contractors are working closely to monitor the weather and plan for remobilization to site. A small team are currently at site, performing road maintenance and site inspection activities, to ensure coordinated remobilization of site personnel and contractors. As a result of the shutdown of the drilling program, the Company is now expecting to drill between 30,000 and 35,000 metres during 2024, down from the original target of 40,000m. The focus of the 2024 program will remain exploration and resource growth with multiple step-out targets in all directions from zones of known mineralization, including both the Bonita and Aurora Zones. The Company continues to maintain a strong focus on improving drill productivity through a variety of initiatives. Data collected from the current campaign is being used to develop a comprehensive geological model which will guide further exploration. The Company is continuing preliminary metallurgical testwork on the sulphide mineralization, as well as environmental and social baseline programs in support of future project permitting. The Company's plans and timelines are subject to equipment and staff availability, along with being able to operate safely and effectively and in accordance with the Company's health and safety protocols. Selected Financial Information Effective January 1, 2024, the Company changed the functional currencies of its parent and subsidiary companies (see table below) to United States dollars ("$USD"). The Company also changed its presentation currency from $CAD to $USD. The changes were enacted to reflect changes in the composition of the Company's contracts and monetary outlays being predominantly denominated in $USD. The change in functional currencies is being recognized prospectively. The change in presentation currency requires retrospective restatement of all prior periods presented in the financial statements. The amounts reported in the statement of financial position as at January 1, 2023 (derived from the consolidated statement of financial position as at December 31, 2022; not presented herein) and December 31, 2023 have been restated in $USD based on the closing exchange rates on December 31, 2022 and December 31, 2023, respectively. The statements of comprehensive loss, cash flows and changes in equity for the three and six months ended June 30, 2023 have been restated in $USD based on the average exchange rate for the three and six months ended June 30, 2023. The $CAD/$USD exchange rates used to reflect the change in presentation currency were as follows: Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Average rate n/a 0.7398 0.7445 0.7456 0.7344 Closing rate 0.7383 n/a n/a n/a 0.7561   (in thousands of US dollars) June 30, December 31, January 1, 2024 2023 (Restated) 2023 (Restated) Cash and cash equivalents 28,137 81,748 55,313 Working capital 17,585 65,776 44,518 Mineral properties 8,568 7,618 7,189 Total assets 43,373 94,049 63,470 Financial Results (in thousands of US dollars, except per share amounts) Three months ended Six months ended June 30, June 30, 2024 2023 (Restated) 2024 2023 (Restated) Exploration and project investigation 21,261 26,712 53,053 52,093 General and administration ("G&A"), excluding     share-based compensation expense(1) 1,479 1,312 2,739 2,999 Share-based compensation expense(1) 1,124 1,654 5,201 4,035 Net loss 18,949 22,085 52,103 44,214 Basic and diluted loss per share 0.14 0.18 0.40 0.36 (1) Share based compensation is a non-cash cost which reflects the amortization of the estimated fair value of share options over their vesting period. The fair value of share options is calculated using the Black-Scholes pricing model, which relies heavily on the Company's share price and historical share price volatility. A portion of this expense is included in Exploration and Project Investigation expense. During the three months ended June 30, 2024, exploration costs decreased as a result of the temporary halting of drilling operations at the Project site due to weather conditions. The reduction in drilling activities during the three months ended June 30, 2024 were the primary driver of the $12.8 million reduction in operating loss in comparison to the three months ended March 31, 2024 ($23.6 million and $36.4 million, respectively). Costs in any particular period may also be impacted by other relevant factors, such as the financial position of the Company, other corporate initiatives, and the scope of planned exploration/project work. Exploration and project investigation expenses for the three and six months ended June 30, 2024 were $21.3 million and $53.1 million, respectively, compared to expenses of $26.7 million and $52.1 million incurred during the comparative periods in 2023. During the three and six months ended June 30, 2024, the Company completed resource drilling of 2,093m and 16,675m, respectively, compared to 9,247m and 18,396m completed during the comparative periods in 2023. Drilling metres during the three months ended June 30, 2024 were negatively impacted as a result of temporarily halting drilling operations at the Filo del Sol site due to poor weather conditions. The Company continues to incur standby costs as it works proactively with its contractors to plan for the recommencement of operations at the Project site. Standby costs are incurred to ensure the continuation of work with our dedicated contractors that are specialized in high elevation operations. For the three and six months ended June 30, 2024, Filo incurred net losses of $18.9 million and $52.1 million, respectively (2023 – $22.1 million and $44.2 million), resulting mainly from operating losses of $23.6 million and $60.1 million, respectively (2023 – $29.4 million and $58.4 million). The operating losses were offset by net gains of $2.8 million and $6.1 ...