Excellon Resources Inc (TSX:EXN, OTCQB:EXNRF) provided an update on its efforts to restart the past-producing Mallay silver-lead-zinc mine in Peru, along with reporting its third quarter financial results.
Excellon highlighted the completion of Phase One rehabilitation at Mallay, which included more than 2,800 metres of underground access restoration across the 4090 and 4150 levels.
The work re-established services and dewatering systems and allowed the company to transition from rehabilitation to definition drilling and restart planning.
During the quarter, Excellon completed a $12 million LIFE private placement and secured the US$7.5 million offtake-backed facility to support restart activities and near-mine exploration.
"The third quarter was about de-risking the Mallay restart – reopening the mine, putting the Glencore facility in place and raising $12 million in equity,” Excellon Resources CEO Shawn Howarth said in a statement.
“We now move into an execution phase in Q4 and Q1 2026, focused on the updated Mineral Resource Estimate, definition drilling and advancing a phased restart towards the mill's historical nameplate capacity of 600 tons per day, subject to a production decision and positive technical results."
An updated NI 43-101 mineral resource estimate for Mallay is expected in the fourth quarter, based on remodeling of historical drilling and current metal price assumptions.
The company said definition drilling from the 4090 level is scheduled to begin in the fourth quarter, targeting mineralization along the Clavos 2, 3 and 6 structures to support a staged restart.
Two additional drill programs at the Isguiz vein system and the Shafra Zone, totaling roughly 16,500 metres, are also planned to begin before year-end, aimed at testing extensions of known mineralization and evaluating a gold-rich intrusive-related target.
Excellon said all key mining and environmental permits required for a restart remain in good standing, and the company recently received explosives permits for underground operations.
Subject to drilling results and mine planning, the company aims to pursue a phased restart in 2026, with potential ramp-up toward the historical 600-ton-per-day capacity of the Mallay mill.
Excellon noted it has not completed a feasibility study, and any decision to resume production will not be based on one.
The company said it continued to strengthen its balance sheet during Q3, ending September with about $24 million in available liquidity, including cash and an undrawn US$7.5 million pre-export finance facility.
Cash and cash equivalents totaled $13.5 million. Excellon said the improvement reflected recent equity financings and the acquisition of Minera CRC, the owner of Mallay and the Tres Cerros exploration property.