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3/21/19

Excellon's (EXN.to) security detail may have been slightly lacking

From the 4q18 MD&A, out this morning. Does that really say 10%? Jeesh...

Concentrate Theft 
In advance of the change in federal government in Mexico in December 2018, the Company recognized a deterioration in security around Miguel Auza, the location of the Company’s processing facility, including threats to certain of the Company’s employees. A preliminary investigation of these threats uncovered a scheme involving the theft of concentrate by criminal elements while in transit from Miguel Auza to Manzanillo from 2016 to October 2018. The amount and value of concentrate stolen remains uncertain; however, it is currently estimated that scheme impacted the Company’s revenues by approximately 10% per year during the affected period. Investigations indicate that three employees were involved in facilitating and concealing the theft; these employees have been terminated. The Company retained experienced consultants to assist with investigations and developed and is implementing a plan to enhance the security footprint at Platosa and Miguel Auza and strengthen internal procedures. Additionally, the Company is working with Mexican authorities to improve security regionally around Miguel Auza. The underlying security situation in the area appears to have calmed. Nevertheless, the Company remains vigilant to protect the safety of its employees and contractors and to ensure its business is not further impacted.