Ascendant Resources Announces Record Metal Production and EPS of $0.06 in Second Quarter 2018

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

Q2 2018 Highlights Include:

• Net income of $4.58 million and earnings per share of $0.06
• Adjusted EBITDA of $7.38 million; fourth consecutive quarter of positive adjusted EBITDA
• Record contained metal production of 22.9 million ZnEq lbs; the sixth consecutive quarter of metal production growth
• Direct operating costs of $76.61/t, a decrease of 3% year to date and 17% over Q2/17
• ZnEq grade of 6.3%, an increase of 15% over Q2/17 and 3% over Q1/18
• Updated Mineral Resource and Mineral Reserve Estimate increased mine life to seven years
• Revised 2018 Operational Guidance to reflect the new mine plan
• Option agreement to acquire up to 80% in the high-grade polymetallic Lagoa Salgada VMS project in Portugal

TORONTO, Aug. 08, 2018 - Ascendant Resources Inc. (TSX: ASND) (OTCQX: ASDRF; FRA: 2D9) ("Ascendant" or the "Company”) reports second quarter 2018 results with net income of $4.58 million or earnings per share of $0.06 during the period from its El Mochito mine. Contained metal production for the quarter was 22.9 million zinc equivalent¹ lbs at an average head grade of 6.3%, representing the Company’s strongest quarter of production since assuming operation of the mine. These results also exceeded the previous record set in Q1/2018 and demonstrate the Company’s continued delivery of improved efficiency in operations.

President and CEO Chris Buncic stated: “Over the course of the last eighteen months operating the El Mochito mine, the Company has delivered on continuous improvements with respect to mill throughput and grade. This is its sixth consecutive quarter of metal production increases at El Mochito. The Company’s commitment to investment in the development of its people and equipment has resulted in greater efficiencies and better mining dilution control. Despite a few challenges during the second quarter, the Company’s ability to respond adeptly, enabled it to increase both tonnes milled and contained metal production during the period.

He continued, “Metal prices for zinc, lead and silver have declined over the course of the last few months, putting pressure on all producers to achieve targeted financial and operational objectives. While short-term prices remain under pressure due to weak market sentiment surrounding lingering global trade tensions and the potential impact on global demand, we continue to see the underlying fundamentals as highly supportive for the zinc market in the medium-term. Fundamentals continue to indicate significant structural supply deficits for zinc in the near-term due to global inventory depletion, supporting the Company’s positive view on prices. Weaker prices in the near- term are expected to defer new project development needed to bridge the demand gap. Nevertheless, the Company remains focused on long-term operational improvements aimed at lowering costs and improving profitability, to make El Mochito a robust and profitable mine in any metals price environment.”

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

Summary of key operational and financial performance for the second quarter 2018 is provided in the tables below:

Second Quarter 2018 Operational Performance

Contained metal production for the second quarter 2018 (“Q2/18”) was 16.3 million lbs of zinc (“Zn”), 5.1 million lbs of lead (“Pb”) and 229,043 ounces of silver (“Ag”). Zinc equivalent (“ZnEq”) metal production was 22.9 million lbs using average realized metal prices for the quarter. This represents a 49% increase over second quarter 2017 (“Q2/17”) production of 15.4 million ZnEq lbs, a 7% increase over the first quarter 2018 (“Q1/18”) of 21.4 million ZnEq lbs, and the sixth consecutive quarter of metal production growth.

Milled production for the second quarter 2018 was 192,428 tonnes, representing a 28% increase against Q2/17 and a 3% increase against Q1/18. June’s performance was mildly impacted by four days of lost production caused by issues experienced with the shaft loading pocket, a failure of a main bearing on the primary screen in the plant, which both have been remedied, and inclement weather which resulted in short interruptions to power to the mine. Throughput rates and grades continue to improve quarter over quarter as the Company sees the benefits of the new truck fleet and remains focused on mining dilution control.

During Q2/18, recoveries averaged 89.7% for zinc, 79.1% for lead and 79.4% for silver which have been relatively stable over the six quarters the Company has owned and operated the mine. Average head grades were 4.3% zinc, 1.5% lead and 48 grams per tonne silver. Zinc equivalent head grade was 6.3% using average metal pricing for the period, a 15% increase over Q2/17 and a 3% increase over Q1/18. Contributions from the high-grade Imperial, Barbasco, Port Royal and San Juan “chimney” ore-bodies had a positive impact on grade for the quarter combined with better mining dilution controls in the mantos areas.

Second Quarter 2018 Financial Performance

The Company reports financial results for the three months ended June 30, 2018 with 20.3 million zinc equivalent lbs sold in Q2/18 with income from mining operations of $5.11 million. Average realized metal prices, on a provisional basis, for the quarter were $1.35 per pound of zinc, $1.09 per pound of lead and $16.39 per ounce of silver.

Second Quarter 2018 Financial Highlights:

• Net concentrate sales revenue of $22.66 million
• Net income of $4.58 million and earnings per share of $0.06
• Adjusted EBITDA² of $7.38 million
• Operating cash flow before changes in working capital of $5.85 million
• Contained metal production of 22.9 million ZnEq lbs, and quarterly milled tonnes of 192,428
• Direct operating cost of $76.61/t and Cash Operating Costs of $0.76/ZnEq lb
• Quarterly payable zinc equivalent production increased 7% to 19.5 million lbs from Q1/18 with payable zinc, lead and silver production of 13.9 million lbs, 4.9 million lbs and 160,330 ozs produced respectively

The Company reported net income of $4.58 million, or $0.06 earnings per share, in the second quarter 2018. Adjusted EBITDA totalled $7.38 million, representing four consecutive quarters of positive adjusted EBITDA. This is a significant increase over second quarter 2017 adjusted EBITDA of negative $5.51 million and a slight decrease over first quarter 2018 of $7.95 million due to lower net selling prices realized in the quarter. The Company’s cash balance was US$11.3 million at June 30, 2018.

Direct operating costs per tonne milled for Q2/18 were $76.61, a 15% decrease versus $89.97 in Q2/17, a 6% increase against Q1/18 where the direct operating cost was $72.33 per tonne milled, but with an overall decrease of 3% year to date. These reductions are a result of cost optimization, operational efficiencies, and increased production achieved, however the cost increase against the first quarter was due to a 6% increase in the cost of power and slightly higher conventional mining costs which target smaller, higher grade ore bodies. Cost reduction on a per-pound payable metal produced basis is an ongoing focus for the Company. There are additional initiatives in place, aimed at further improving the Company’s cost structure.

Cash operating cost per zinc equivalent payable pound sold was $0.76 and All-In Sustaining Cost (“AISC”) was $1.39 per zinc equivalent payable pound sold for the first quarter. Capital expenditures are expected to decline in the second half of the year as payments for the new fleet are almost complete as well as reduced spending on the tailings dam raise that was completed in the first half of 2018. Last quarter the Company announced it adopted the AISC reporting metric as the Company believes it more fully defines the total costs associated with producing zinc and provides greater transparency for stakeholders when assessing operating performance and ability to generate free cash flow from operations.

Updated Mineral Resources and Mineral Reserves Declared in Q2/18

The Company filed an updated NI 43-101 Mineral Resource and Mineral Reserve Estimate and Technical Report for the El Mochito Mine in the second quarter (see press releases on May 28, 2018), highlighting the following:

Proven & Probable Mineral Reserves increase life of mine beyond seven years (at a rate of 820kt/yr):
Contained zinc increased 193% from 204 M lbs to 597 M lbs
Contained lead increased 109% from 100 M lbs to 209 M lbs
Contained silver increased 106% from 3.5 M oz to 7.2 M oz

Measured & Indicated Mineral Resources increase
50% to 869 M lbs contained zinc from 578 M lbs, and
28% to 1,216 M lbs contained zinc equivalent metal, up from 953 M lbs

Inferred Mineral Resources also increase by 14% to 739M lbs contained zinc equivalent metal, up from 648 M lbs.

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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.

A summary of the Mineral Reserve Estimate is set out in Table 1 and the Mineral Resource Estimate can be found in Table 2 below:

The Technical Report was prepared in accordance with National Instrument 43-101 (“NI 43-101”) and the CIM Standards by Mercator Geological Services Limited, with contributions made by P&E Mining Consultants Inc. with reference to the Mineral Reserve Estimate, mining and metallurgical engineering sections and was filed on SEDAR.

Mineral Reserve Estimate

The P&E Mining Consultants Inc. Mineral Reserve Estimate (Table 1) review strategy was based on a review and check for reasonableness of the percent zinc equivalent (“ZnEq%”) cut-off value. Subsequently, the internal dilution, external dilution, and mine extraction (mining recovery) was scrutinized for each of the four mining methods employed to ensure they fell within acceptable limits for Mineral Reserve Estimate reporting. In addition, the remaining Mineral Resource Estimate not converted to a Mineral Reserve Estimate was reviewed to ensure it balanced with the mine extraction data. The Mineral Reserve Estimate reviews were summarized into overall dilution and mine extraction percentile for a reasonable value comparison analysis. The average values are as follows: Internal Dilution = 1.3%, External Dilution = 14.3% and Mine Extraction = 90.9%.

Mineral Resource Estimate

The Mineral Resource Estimate, as set out in Table 2, was prepared by Mercator Geological Services Limited. The effective date of this Mineral Resource Estimate is January 1, 2018, and it is based on 26 contiguous areas of “manto” and/or “chimney” style skarn mineralization defined by 2,176 diamond drill holes up to December 31st, 2017. 3D solid models of skarn mineralization reflecting a minimum grade of 3% ZnEq. were depleted for previously mined areas to constrain Mineral Resource volumes. GEOVIA Surpac® 6.8.1 software was used to assign block grades for zinc (%), lead (%), silver (g/t) and density (g/cm3) for Measured, Indicated and Inferred Mineral Resources using inverse distance squared (ID2) interpolation methodology and capped 5 foot down hole assay composites. Up to four interpolation passes were applied using progressively increasing ellipsoid ranges to cover the range of 3D solid model sizes present. Block size is 10 feet (x) by 10 feet (y) by 10 feet (z) with two levels of sub-blocking allowed to a minimum block size of 2.5 feet (x) by 2.5 feet (y) by 2.5 feet (z). Mineral Resource categorization was applied using discrete solid models developed from contributing drill hole and assay composite parameters.

Exploration Activities

During the second quarter, the Company continued the advancement of its 40,000 metre 2018 drill program underground at El Mochito. This program is focused equally on definition drilling for the purpose of resource conversion to further enhance the new resource base supporting a long operating life and exploration drilling to define additional material near mine and regional exploration targets.

In June 2018, the Company announced results from 40 diamond drill holes or 12,015 metres. The drilling results were split between step-out (66%) and in-fill (34%) drill holes, targeting four ore bodies, namely Porvenir, Santa Elena, Port Royal Manto and Esperanza. (see press release issued on June 14, 2018) Results continue to demonstrate high-grade mineralization above current mining grades and support managements goal of identifying long-term Mineral Resource growth. As of the end of July 20,495 meters of the program had been completed with the next set of results expected during Q3.

Additionally, the Company is reviewing and prioritizing near-mine targets within the existing concessions including the anomalies named Manzanal, Soledad, Caliche and Nispero. Management has also identified a number of high-grade targets, which have not been properly explored at the El Mochito mine itself. Follow-up work on known “chimney” type ore bodies with historic grades well above current Mineral Reserve and Mineral Resource grade is underway in the historical upper levels of the mine, many of which is still in relatively good condition. There also remains the possibility of including various unmined blocks, pillars and remnants that could be categorized into Mineral Resources if they are confirmed accessible and accordingly sampled.

Lagoa Salgada Exploration Project

In June 2018, Ascendant entered into an agreement with TH Crestgate GmbH (“Crestgate”) to acquire an initial 25% interest in its Portuguese subsidiary Redcorp - Emprendimentos Mineiros, Lda (“Redcorp”), which holds an 85% interest in the polymetallic Lagoa Salgada volcanogenic massive sulphide (“VMS”) Project (“Lagoa” or the “Project”) located in Portugal, as well as an option to earn up to an 80% interest in Redcorp upon completion of certain milestones. (see press release issued on August 1, 2018 for transaction details).

Lagoa Salgada currently has a resource of 5.84 million tonnes of Indicated Mineral Resources at 8.88% ZnEq and 2.01 million tonnes of Inferred Mineral Resources at 7.82% ZnEq in the LS-1 Deposit and 2.22 million tonnes at 4.8% ZnEq in the LS-1 Central Deposit, prepared in accordance with NI 43-101. The Project covers 10,700 hectares with 17 gravimetric targets identified, with only the LS-1 and LS-1 Central zone having been significantly tested.

The Lagoa Salgada Project is located within the north-western section of the prolific Iberian Pyrite Belt in Portugal, approximately 80 km southeast of Lisbon and is accessible by national highways and roads. The Project is comprised of a single exploration permit covering an area of approximately 10,700 hectares. The Project represents an early-stage, potentially high-grade, polymetallic zinc-lead-copper exploration opportunity in a low risk, established and prolific jurisdiction.

The Iberian Pyrite Belt (IBP) is host to some of the world’s largest VMS deposits and mines such as Neves-Corvo (Lundin Mining Corp.), Aguas Tenidas (Trafigura Mining Group) and Aljustrel (private), and represents the largest concentration of massive sulphide deposits in the world, forming an arch through Portugal and Spain about 240 km long and 35 km wide and has produced more than 300 million tonnes of massive sulfide ore over the past hundred years.

Ascendant views Lagoa as immediately accretive to the Company’s ZnEq metal expose and offers the potential to be potentially high-grade, polymetallic zinc-lead-copper exploration opportunity in a low risk, established and prolific jurisdiction. Ascendant is finalizing an exploration program aimed at significantly accelerating exploration efforts on the project with the expectation of significantly expanding the known Mineral Resources at Lagoa.

Outlook & Growth

The rapid decline in prices for zinc, lead and silver during the past few months has placed immense pressure on all producers, including Ascendant, to achieve targeted objectives for the current year. As such, the Company has revised its expected operational and financial objectives for the balance of the year. Please see Revised 2018 Operational Guidance section below.

In conjunction with the completion of the NI 43-101 Technical Report for El Mochito, outlining a mine life of more than seven years as described above, Ascendant has engaged third party technical and engineering firms to assist with the further review of the El Mochito mine.

The focus of the analysis has been on increasing production and sustainably lowering operating and capital costs primarily through strategic improvements to the underground infrastructure, plant upgrades and water & tailings management systems. Management is confident that the optimization plans have the potential to deliver strong EBITDA and robust free cash flow at consensus long-term metal prices.

Revised 2018 Operational Guidance

Management is very pleased to have recorded six consecutive quarters of production growth at El Mochito while continuing to reduce costs dramatically over the same period. Following completion of the NI 43-101 Mineral Reserves and Mineral Resources Report and the associated mine plan in May 2018, the Company has been focused on strategically increasing development rates in the mine to accelerate access into higher-grade portions of the mine. This is expected to increase the average feed grade to the mill for the coming years.

The accelerated development program has increased our operational capital expenditure requirements for the 2018 fiscal year. Direct operating costs remain unchanged at this time as the Company has been successful at decreasing unit costs year to date with further improvements expected through the remainder of the year.

Commodity price weakness has also impacted the Company’s financial objectives which have been revised as a consequence as well.

Please see our revised Guidance for 2018 in the chart below:

¹ Previous figures are based on the following metal price assumptions for full year 2018; $1.50/lb zinc, $1.10/lb lead and $18/oz silver.
² Revised figures are based on the following metal price assumptions for the second half of 2018 $1.20/lb zinc, $0.95/lb lead and $16/oz silver.

Management is optimistic that the current depressed pricing for zinc is unlikely to be sustained, however we are providing our revised guidance using spot pricing of $1.20/lb Zn, $0.95/lb Pb and $16/oz Ag. A $0.10/lb improvement in zinc pricing would add over $3 million to EBITDA and Free Cash Flow for the balance of the year.

Management expects to exit the year with a strong cash position of approximately $10-12 million following all expenditures on programs at El Mochito and Lagoa Salgada.

Conference Call

A conference call will be held tomorrow, August 9, 2018, at 10:00am EDT to discuss second quarter 2018 operational and financial results.

Conference Call Details:
Date of Call: Thursday, August 9, 2018
Time of Call: 10:00am EDT
Conference ID: 3172066
Dial-In Numbers:
North American Toll-Free: 1-833-696-8362
International: 1-612-979-9908

A recorded playback of the conference call will be available until September 9, 2018 and can be accessed on the Company’s website at www.ascendantresources.com within the Investors section.

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 three months ended June 30, 2018, 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 Patrick Toth, P.Geo and director of exploration of the Company. Mr. Toth 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 El Mochito Zinc-Lead-Silver Mine in north-western 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 with sustained production reaching record levels and profitability restored. The Company 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 Mineral 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 lower level of confidence that that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration. 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 classification. Likewise, you are cautioned not to assume that all or any part of a Measured or Indicated Mineral Resource will ever be upgraded to 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, robust adjusted EBITDA, expectation of expanding the known Mineral Resources at Lagoa Salgada, the Company’s guidance, 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, maintain robust adjusted EBITDA and free cash flow in 2018, the ability to expand known Mineral Resources at Lagoa Salgada, the ability to achieve guidance 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 Mineral Resources, and the potential for variations in grade and recovery rates, uncertain costs of reclamation activities, tax refunds, hedging transactions, the inability of the Company to meet its guidance, 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 such 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.

Cash operating costs

Cash operating costs is a financial performance measure with no standard meaning under IFRS. Ascendant reports total production cash costs on a sales basis. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, such as sales, certain investors use this information to evaluate the Company’s performance and ability to generate operating earnings and cash flow from its mining operations. Management uses this metric as an important tool to monitor operating cost performance.

Total production cash costs include production costs, such as mining, processing charges divided by ZnEq payable pounds sold to arrive at total cash operating costs per ZnEq payable pound sold. The measure also includes other mine related costs incurred such as variation in inventory. Production costs are exclusive of depreciation. Other companies may calculate this measure differently.

The following table provides a reconciliation of direct operating costs and all-in sustaining costs to cost of sales, as reported in the Company’s consolidated statement of income (loss) for the three months ended June 30, 2018 and 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.