Ascendant Resources Reports Free Cash Flow in Q4 and Record December Production at the Rehabilitated El Mochito Mine

(All dollar amounts are in U.S. dollars (“$”) unless otherwise specified)

Q4 2017 Highlights

• Positive Free Cash Flow of $0.75 million for Q4 2017 with $8.04 million in cash exiting 2017
  
  
• Adjusted EBITDA of $2.28 million for Q4 2017; six consecutive months of positive Adjusted EBITDA
  
  
• Record tonnes milled in December; Q4 2017 production average of 2,241 tonnes per day, a 13% increase over Q3 2017

2017 Annual Highlights

• Successful rehabilitation of the El Mochito mine post acquisition
  
  
• Milled production increased 81% and direct operating costs decreased 31% throughout 2017
  
  
• Adjusted EBITDA of ($2.49) million for first year of operation by Ascendant
  
  
• Production rates exiting 2017 support higher sustained rates for 2018
  
  
• Strong exploration results form basis for Updated NI 43-101 report expected in Q2 2018

TORONTO, March 21, 2018 (GLOBE NEWSWIRE) -- Ascendant Resources Inc. (TSX:ASND) (OTCQX:ASDRF) (FRA:2D9) ("Ascendant" or the "Company”) reports results for its fourth quarter and full year 2017, achieving free cash flow of $0.75 million in the fourth quarter 2017 and attaining the second strongest month of production ever achieved at the El Mochito mine in December 2017. Operations at the El Mochito mine are now well positioned for increased profitability in 2018 as demonstrated by recently released 2018 guidance. (see press release dated January 11, 2018)

Fiscal 2017 represented the first full year of operations at the El Mochito mine by the Ascendant management team since its acquisition in late December 2016. During the year, significant progress was made improving the overall operations as well as the financial performance of the mine as demonstrated by an 81% increase in monthly tonnes processed and a 31% reduction in direct operating costs from January to December 2017. This success was driven by a marked improvement in equipment availability, equipment utilization, general working conditions underground, safety, and increased employee supervision and accountability.

President and CEO Chris Buncic stated: “Ascendant ended 2017 on an exceptionally high note having completed the successful rehabilitation of the El Mochito mine, achieving free cash flow ahead of expectations and exceeding annual production targets. The mine has demonstrated the potential to be a capable asset with the opportunity to generate significant free cash flow over the long-term.”

He continued, “Throughout 2018, we are looking forward to maintaining this momentum while layering in further operational improvements. The Company remains dedicated to further operational improvements and increasing head grade to the mill to improve value per tonne milled, while evaluating opportunities to improve contribution margins and cut costs.”

Summary of key operational and financial performance for the fourth quarter and full year 2017 is provided in the tables below:

Full Year and Fourth Quarter 2017 Operational Performance

During the fourth quarter, contained zinc equivalent¹ metal production was 19.58 million lbs composed of 14.13 million lbs of zinc, 4.56 million lbs of lead and 169,039 ounces of silver, which increased by 12% from the third quarter 2017. For the year ended December 31, 2017, total contained metal production was 66.1 million lbs of zinc equivalent metal including 45.05 million lbs of zinc, 14.90 million lbs of lead and 698,506 ounces of silver, exceeding the Company’s guidance of 65.8 million lbs of zinc equivalent metal.

Milled production for the fourth quarter was 198,354 tonnes, a 13% increase against the third quarter. Milled production for the month of December was 69,578 tonnes, representing the second strongest month of production ever achieved at the El Mochito mine, and an overall increase in monthly production of 81% since January 2017. This substantial increase in milling rates was a result of the introduction of additional new mining equipment, an improved operating environment and the start of conventional underground mining operations in narrow but high-grade areas. Average head grades for the quarter were 3.65% zinc, 1.40% lead and 35.2 grams per tonne silver. The zinc equivalent grade was 5.31% using average metal pricing for the period, remaining relatively flat over the third quarter. Milled production for the full year 2017 was 656,291 tonnes with average grades of 3.50% zinc, 1.39% lead and 42.6 grams per tonne silver resulting in a zinc equivalent grade of 5.42%. Head grades in 2018 are expected to improve from reduced dilution measures and a production shift towards higher-grade ore zones, namely Esperanza and Nueva Este.

During the fourth quarter, recoveries averaged 88.5% for zinc, 74.6% for lead and 75.0% for silver, a slight improvement from Q3 2017. For the year ended December 31, 2017, recoveries averaged 88.9% for zinc, 74.2% for lead and 77.4% for silver, representing relatively consistent recovery rates throughout the year.

Operations benefited from the improvements to health and safety, supervisor training, operator training, improving underground working conditions (improved ventilation, better roadways etc.), increasing productive hours per day and a general focus on overall efficiently throughout all operational areas. Ascendant also commenced a full underground mine fleet replacement ordering 10 new underground mine trucks, 6 scoops, 2 jumbos and 2 bolters in 2017. In addition, the Company overhauled two of the older trucks and two scoops. The remainder of the new equipment is expected to be delivered and deployed by mid-2018 and support further operational improvements while lowering overall direct operating costs with increased equipment availability and reduced maintenance costs.

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¹ This figure was calculated on a spot metal price basis.

Full Year and Fourth Quarter 2017 Financial Performance

The Company reports financial results for the three months and full year ended December 31, 2017 with 17.6 million zinc equivalent lbs sold in the fourth quarter 2017 with income from mining operations of $3.59 million. In 2017, the Company sold 50.7 million zinc equivalent lbs realizing a loss from mining operations of $0.05 million. Average realized metal prices for the quarter were $1.46 per pound of zinc, $1.13 per pound of lead and $16.99 per ounce of silver and provisional prices for the full year are $1.36 per pound of zinc, $1.06 per pound of lead and $17.17 per ounce of silver.

Fourth Quarter 2017 Financial Highlights:

• Net concentrate sales revenue of $23.93 million, up 37% from Q3 2017
• Net loss of $1.43 million and loss per share of $0.02
• Adjusted EBITDA² of $2.28 million
• Operating cash flow before changes in working capital of $0.57 million
• Quarterly milled tonnes increased 13% to 198,354 tonnes, up from 176,037 tonnes in Q3 2017
• Quarterly payable zinc equivalent production increased 12% to 16.6 million lbs from Q3 2017 with payable zinc, lead and silver production of 12.0 million lbs, 4.3 million lbs and 118,327 ozs produced respectively

Full Year 2017 Financial Highlights:

• Net concentrate sales revenue of $59.19 million in 2017, the first year of commercial production since the acquisition of the El Mochito mine
• Net loss of $12.05 million and loss per share of $0.18 as result of the higher operating costs at the beginning of the year and various one-time items in the rehabilitation of operations
• Adjusted EBITDA of ($2.49) million
• Operating cash flow before changes in working capital of ($6.01) million
• Direct Operating Costs decreased by 31% to $77.80 in December as compared to $112.21 in January 2017
• Total cash position of $8.04 million exiting 2017
• Payable zinc equivalent production in 2017 of to 56.2 million lbs with payable zinc, lead and silver payable production of 38.3 million lbs, 14.2 million lbs and 488,954 ozs produced respectively

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² Adjusted EBITDA is a Non-IFRS measure and is calculated by considering the Company's earnings before interest payments, tax, depreciation and amortization, share-based payments, adjusted for net foreign exchange expenses.

Adjusted EBITDA for the fourth quarter ending December 31, 2017 totaled $2.28 million representing the sixth consecutive month of positive adjusted EBITDA and overall improved financial performance. During the fourth quarter 2017, the Company also reported its first quarter of free cash flow totaling $0.75 million. Adjusted EBITDA for the full year 2017 totaled negative $2.49 million as the operational turnaround took hold and both zinc and lead prices remained strong. As detailed in the reiterated guidance below, the Company expects robust adjusted EBITDA and free cash flow generation in 2018 as a result of its dedication to further operational improvements at the mine level.

Direct operating cost per tonne milled for the fourth quarter 2017 at El Mochito were $80.13, a 9% decrease versus third quarter direct operating cost per tonne milled of $87.86 as a result of cost optimization, operational efficiencies, and increased production achieved throughout the quarter. Direct operating costs per tonne milled for 2017 at El Mochito averaged $88.22. During the year direct operating costs decreased from $112.21/t in January 2017 to $77.80/t in December representing a 31% decrease. Further decreases in costs are expected in 2018 as full commissioning and implementation of the new mining fleet is completed and an increase in lower-cost, long-hole stoping is undertaken. Cost reduction is an ongoing focus for the Company and with many initiatives in place the Company expects to see further reduction over the medium and longer term.

Exploration Activities and Resource Update

During 2017, Ascendant commenced a successful 26,877-meter exploration and resource definition drilling program at El Mochito. Work is currently underway on a new NI 43-101 Technical Report to be presented in early Q2 2018. It is expected that the updated Mineral Resource and Reserve statement will significantly increase the life of mine and highlight the long-term production potential of El Mochito.

The 2017 exploration program targeted extensions of known high-grade ore bodies, Palmar Dyke, Santa Elena, Victoria and Esperanza, all of which are close to current workings and can be brought into the mine plan within the next six to twelve months. Mining at Esperanza has already commenced in the fourth quarter of 2017. The exploration results published highlight consistent mineralization of grades and intercepts well in excess of those currently being mined (see press releases issued in June 26, 2017, October 3, 2017, and January 22, 2018).

2018 Outlook - Strong Production Supporting Meaningful Free Cash Flow

The Company issued its 2018 production and cost guidance on January 11, 2018 and is provided below.
In 2018, the Company plans to continue to build on the solid operating performance achieved in 2017 while focusing on maximizing free cash flow and long-term profitability during a period of continued stable operations. During 2018, management remains focused on further operational improvements while increasing mill feed grades and reducing costs. Contained metal production and cash flow should trend higher as the year progresses due to mine sequencing laid out in the Company’s internal mine plan and the receipt of expected new equipment.

2018 Production Guidance is provided in the table below:

All figures in the above table are based on the following metal price assumptions; $1.50/lb zinc, $1.10/lb lead and $18/oz silver.
¹Adjusted EBITDA is a Non-IFRS measure and is calculated by considering the Company's earnings before interest payments, tax, depreciation and amortization, share-based payments, adjusted for net foreign exchange expenses.
²Free Cash Flow is a Non-IFRS measure and is calculated by considering the Company's cash flows from operations, less the cash used in investing activities.

Conference Call

A conference call will be held tomorrow, March 22, 2018, at 10:00am EST to discuss fourth quarter and full year 2017 operational and financial results.

Conference Call Details:
Date of Call: Thursday, March 22, 2018
Time of Call: 10:00am EST
Conference ID: 3399598
Dial-In Numbers:
North American Toll-Free: 1-833-696-8362
International: 1-612-979-9908

A recorded playback of the call will be available until April 21, 2018 by dialing: 1-855-859-2056 or 1-404-537-3406 and entering the call back passcode 3399598.

The information provided within this release should be read in conjunction with Ascendant’s unaudited condensed consolidated interim financial statements and management's discussion and analysis for the year ended December 31, 2017, which are available on Ascendant’s website and on SEDAR. As at January 1, 2017, the Company has changed its presentation currency to the U.S. dollar (US). All financial figures are in US dollars unless otherwise stated.

Technical Disclosure/Qualified Person
All technical information contained herein has been reviewed and approved by Robert A. Campbell, M.Sc, P.Geo, a director of the Company. Mr. Campbell is a "qualified person" within the meaning of NI 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”).

About Ascendant Resources Inc.
Ascendant is a Toronto-based mining company focused on its 100%-owned producing El Mochito zinc, silver and lead mine in west-central Honduras, which has been in production since 1948. After acquiring the mine in December 2016, Ascendant implemented a rigorous optimization program aimed at restoring the historic potential of the El Mochito mine. In 2017, the Company successfully completed the operational turnaround it set out to achieve with sustained production at record levels and profitability restored. The Company now remains focused on cost reduction and further operational improvements to drive robust free cash flow in 2018 and beyond. Ascendant is also focused on expanding and upgrading known resources through extensive exploration work for near-term growth. With a significant land package of 11,000 hectares and an abundance of historical data there are several regional targets providing longer term exploration upside which could lead to further resource growth. The Company is also engaged in the evaluation of producing and development stage mineral resource opportunities, on an ongoing basis. The Company's common shares are principally listed on the Toronto Stock Exchange under the symbol "ASND". For more information on Ascendant Resources, please visit our website at www.ascendantresources.com.

Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.

For further information please contact:

Katherine Pryde
Director, Communications & Investor Relations
Tel: 888-723-7413
info@ascendantresources.com

Cautionary Notes to US Investors

The information concerning the Company’s mineral properties has been prepared in accordance with National Instrument 43-101 (“NI-43-101”) adopted by the Canadian Securities Administrators. In accordance with NI-43-101, the terms “mineral reserves”, “proven mineral reserve”, “probable mineral reserve”, “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Definition Standards for Mineral Resources and Mineral Reserves adopted by the CIM Council on May 10, 2014. While the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are recognized and required by NI 43-101, the U.S. Securities Exchange Commission (“SEC”) does not recognize them. The reader is cautioned that, except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic value. Inferred mineral resources have a high degree of uncertainty as to their existence and as to whether they can be economically or legally mined. It cannot be assumed that all or any part of any inferred mineral resource will ever be upgraded to a higher category. Therefore, the reader is cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally mined, or that it will ever be upgraded to a higher category. Likewise, you are cautioned not to assume that all or any part of a measured or indicated mineral resource will ever be upgraded into mineral reserves.

Readers should be aware that the Company’s financial statements (and information derived therefrom) have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and are subject to Canadian auditing and auditor independence standards. IFRS differs in some respects from United States generally accepted accounting principles and thus the Company’s financial statements (and information derived therefrom) may not be comparable to those of United States companies.

Forward Looking Information

This news release contains "forward-looking statements" and "forward-looking information" (collectively, "forward-looking information") within the meaning of applicable Canadian securities legislation. All information contained in this news release, other than statements of current and historical fact, is forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "budget", "guidance", "scheduled", "estimates", "forecasts", "strategy", "target", "intends", "objective", "goal", "understands", "anticipates" and "believes" (and variations of these or similar words) and statements that certain actions, events or results "may", "could", "would", "should", "might" "occur" or "be achieved" or "will be taken" (and variations of these or similar expressions). Forward-looking information is also identifiable in statements of currently occurring matters which may continue in the future, such as "providing the Company with", "is currently", "allows/allowing for", "will advance" or "continues to" or other statements that may be stated in the present tense with future implications. All of the forward-looking information in this news release is qualified by this cautionary note.

Forward-looking information in this news release includes, but is not limited to, statements regarding the consistency of processing recovery levels, improvements of grades in 2018, deployment of new mining equipment, increase in contained metal production, maintenance of production rates, increase of mill feed grades, reduction of costs, monthly shipments of concentrate, the ability to fully fund planned development, exploration and capital expenditures, completion of an NI 43-101 report, robust adjusted EBITDA and free cash flow generation in 2018 and the undertaking of various long-term optimization programs. Forward-looking information is not, and cannot be, a guarantee of future results or events. Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by Ascendant at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies and other factors that may cause actual results and events to be materially different from those expressed or implied by the forward-looking information. The material factors or assumptions that Ascendant identified and were applied by Ascendant in drawing conclusions or making forecasts or projections set out in the forward-looking information include, but are not limited to, the ability of the Company to maintain the consistency of processing recovery levels, to improve grades in 2018, to deploy new mining equipment, increase contained metal production, maintain production rates, increase mill feed grades, reduce costs, make monthly shipments of concentrate, fully fund planned development, exploration and capital expenditures, complete an NI 43-101 report, maintain robust adjusted EBITDA and free cash flow in 2018 and undertake various long-term optimization programs and other events that may affect Ascendant's ability to develop its project; and no significant and continuing adverse changes in general economic conditions or conditions in the financial markets.

The risks, uncertainties, contingencies and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information may include, but are not limited to, risks generally associated with the mining industry, such as economic factors (including future commodity prices, currency fluctuations, energy prices and general cost escalation), uncertainties related to the development and operation of Ascendant's projects, dependence on key personnel and employee and union relations, risks related to political or social unrest or change, rights and title claims, operational risks and hazards, including unanticipated environmental, industrial and geological events and developments and the inability to insure against all risks, failure of plant, equipment, processes, transportation and other infrastructure to operate as anticipated, compliance with government and environmental regulations, including permitting requirements and anti-bribery legislation, volatile financial markets that may affect Ascendant's ability to obtain additional financing on acceptable terms, the failure to obtain required approvals or clearances from government authorities on a timely basis, uncertainties related to the geology, continuity, grade and estimates of mineral reserves and resources, and the potential for variations in grade and recovery rates, uncertain costs of reclamation activities, tax refunds, hedging transactions, as well as the risks discussed in Ascendant's most recent Annual Information Form on file with the Canadian provincial securities regulatory authorities and available at www.sedar.com.

Should one or more risk, uncertainty, contingency, or other factor materialize, or should any factor or assumption prove incorrect, actual results could vary materially from those expressed or implied in the forward-looking information. Accordingly, the reader should not place undue reliance on forward-looking information. Ascendant does not assume any obligation to update or revise any forward-looking information after the date of this news release or to explain any material difference between subsequent actual events and any forward-looking information, except as required by applicable law.

NON-IFRS PERFORMANCE MEASURES

The non-IFRS performance measures presented do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be directly comparable to similar measures presented by other issuers.

Non-IFRS reconciliation of Adjusted EBITDA

EBITDA is a non-IFRS measure that represents an indication of the Company’s continuing capacity to generate earnings from operations before taking into account management’s financing decisions and costs of consuming capital assets, and management’s estimate of their useful life. EBITDA comprises revenue less operating expenses before interest expense (income), property, plant and equipment amortization and depletion, and income taxes. Adjusted EBITDA has been included in this document. Under IFRS, entities must reflect in compensation expense the cost of share-based payments. In the Company’s circumstances, share-based payments involve a significant accrual of amounts that will not be settled in cash but are settled by the issuance of shares in exchange for cash. EBITDA and Adjusted EBITDA do not have any standardized meaning prescribed by IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. EBITDA and Adjusted EBITDA exclude the impact of cash costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate EBITDA and Adjusted EBITDA differently. As such, the Company has made an entity specific adjustment to EBITDA for these expenses. The Company has also made an entity-specific adjustment to the foreign currency exchange (gain)/loss.

The following table provides a reconciliation of net income (loss) to Adjusted EBITDA:

Direct operating cost per tonne milled

The Company uses the non-IFRS measure of direct operating cost per tonne milled to manage and evaluate operating performance. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance and ability to generate cash flows. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Company considers cost of sales per tonne milled to be the most comparable IFRS measure to direct operating cost per tonne milled and has included calculations of this metric in the reconciliations within the applicable tables to follow.

Direct operating cost per tonne milled includes mine direct operating production costs such as mining, processing, administration, indirect charges as surface maintenance and camp expenses, and inventory sales adjustments but does not include, smelting, refining and freight costs, royalties, depreciation, depletion, amortization, reclamation, and capital costs.

The following table provides a reconciliation of direct operating costs to cost of sales, as reported in the Company’s consolidated statement of income (loss) for the year ended December 31, 2017:

Additional non-IFRS measures

The Company uses other financial measures, the presentation of which is not meant to be a substitute for other subtotals or totals presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. The following other financial measures are used:

• Operating cash flows before movements in working capital - excludes the movement from period-to-period in working capital items including trade and other receivables, prepaid expenses, deposits, inventories, trade and other payables and the effects of foreign exchange rates on these items.

The terms described above do not have a standardized meaning prescribed by IFRS, and therefore the Company’s definitions are unlikely to be comparable to similar measures presented by other companies. The Company’s management believes that their presentation provides useful information to investors because cash flows generated from operations before changes in working capital excludes the movement in working capital items. This, in management’s view, provides useful information of the Company’s cash flows from operations and are considered to be meaningful in evaluating the Company’s past financial performance or its future prospects. The most comparable IFRS measure is cash flows from operating activities.