04:32 PM EDT, 04/04/2024 (MT Newswires) -- Elevation Gold Mining ( EVGDF ) after trade Thursday released first-quarter production results and provided information on other corporate matters, including its liquidity. The company said it expects to file its Q1 2024 financial statements and management discussion and analysis in May.

Among Q1 2024 Highlights, Elevation sold 5,850 ounces of gold in the period, down 28% from the year-prior quarter. Gold production fell 20% to 6,303 ounces as it mined 635,931 tonnes of ore, down 6.3% from the first quarter of 2023.

Tim Swendseid, Chief Executive Officer, in a statement said: "It has been a busy quarter. Production during the quarter was impacted by continuing throughput related issues with the crushing plant, resulting primarily from harder than typical ore and wet ore, a required condition for dust control. The ore hardness and throughput improved by the quarter's end, and we are expecting a meaningfully positive improvement in tons crushed and ounces produced for the second quarter.

"Additionally, mining efficiencies have significantly improved in the western area, beginning in February, as expected. On February 27, 2024, we were very pleased to announce positive exploration results in the Reynolds Pit area. Gold prices also strengthened during the quarter, which will help future revenues.

"We also successfully completed a reallocation of part of our permitted mining area from the east side of the boundary to the west side, to support the Reynolds Pit development. The Reynolds Pit development commenced during the quarter, and we are now on the second production bench. As a result of the weaker than expected production during Q1 2024, we are providing information in this press release concerning our liquidity, and as previously announced, our Q4 2023 financial results and management discussion and analysis will be released later this month."

In a liquidity update, the company said it has been in ongoing discussions with Maverix Metals, a wholly owned subsidiary of Triple Flag Precious Metals ( TFPM ) , which holds the silver stream in respect of the Moss Mine and is the company's principal lender, as well as most royalty holders in respect of the Moss Mine, to try to restructure these obligations to "help alleviate the current burden on revenues being generated by the Moss Mine".

As a result of lower-than-expected production during the second half of Q4 2023 and the first half of Q1 2024, the company has temporarily suspended its royalty/finder fee payments and silver stream delivery obligations to preserve sufficient liquidity for the continued operation of the Moss Mine. Thursday's statement noted Maverix has consented to the delay of certain delivery obligations in respect of the silver stream, however the company did not receive the consent of certain royalty holders.

Elevation said it has engaged with Maverix, its largest creditor, and is working to resolve the outstanding obligations owing to its royalty holders. The company added it will update the market with the progress of the discussions as the situation evolves. The Company is examining all available options to ensure sufficient liquidity, including debt consolidation or restructuring, further debt or equity financing, or a sale of the Moss Mine.

Elevation also announced that it has consolidated outstanding unsecured debts owing to Maverix, in the aggregate principal amount of approximately US$28.2 million, as obligations under the silver streaming agreement with Maverix. Thursday's statement noted the Maverix Debt was incurred in a number of lending transactions during 2022 and 2023, the proceeds of which were used to provide additional operational and capital funding related to the leach pad expansion for the Moss Mine.

The terms of the Maverix Debt remain unchanged as a result of the consolidation, with approximately US$10 million being payable on demand by Maverix and not subject to interest, and approximately $18.2 million being payable on maturity on April 1, 2025 and subject to interest at a rate of 10% per annum, which interest is payable on maturity. As a result of the consolidation, the Maverix Debt is now secured against all of the company's assets pursuant to the security granted in connection with the silver stream.

Elevation shares closed up C$0.005 to C$0.12 on the TSX Venture Exchange. The shares have fallen 47% over the past 12 months.