Cash position of $93 million
and working capital of $175 millionNet
Loss of $31 million or $0.04 per share for
2018-Q3Net Income of $21 million or $0.02 per
share for the nine months ended September 2018Also
announces intention to launch Normal Course Issuer Bid
Trevali Mining Corporation (“Trevali” or the
“Company”)
(TSX: TV; BVL: TV; OTCQX: TREVF; Frankfurt:
4TI) has released financial results for the three and nine
months ended September 30, 2018 and announced its intention to
launch a normal course issuer bid. Third quarter (“Q3”) net loss
was $30.8 million ($0.04 per share) and EBITDA1 was a $22.4 million
loss on net revenues of $30.5 million.
Summary:
- Zinc production of 101.6 million pounds of payable zinc
compared to 103.9 million pounds of payable zinc during the
previous 3 months at a C1 cash cost1 of $0.72 per pound, in line
with annual guidance.
- Net loss of $30.8 million or $0.04 per share and adjusted
EBITDA1 of negative $21.1 million due to lower sales from the
African business units as a result of an inventory build up,
coupled with lower commodity prices impacting open sales invoicing
from previous quarters. The decline in metal prices during the
quarter resulted in a negative provisional pricing adjustment of
$42.6 million compared to $0.8 million for the three months ended
September 30, 2017. Inventory build up is expected to be
reduced and reflected in fourth quarter sales. Should the sales
have been made in September, Q3 earnings would have benefited by
$0.01/share and EBITDA by approximately $11 million.
- Maintained strong working capital position of $175.4 million as
of September 30, 2018 ($144.4 million at December 31, 2017) and net
debt1 and total debt of $61.7 million and $154.8 million,
respectively ($66.4 million and $160.6 million at December 31,
2017).
- Entered into an amended and restated credit agreement with a
syndicate of lenders for a new $275.0 million Revolving Credit
Facility, resulting in reduced interest payments and affording the
Company the flexibility to repay debt without compromising total
available liquidity.
- On October 22, 2018, the Company announced updated 2018
guidance for the Caribou Mine, with zinc production guidance
reduced to 70 to 75 million pounds (from 86 to 90 million pounds)
due to localized adverse ground conditions.
- At Perkoa, the mine’s 2018 zinc production guidance is raised
to 172 to 180 million pounds payable metal, from 164 to 174 million
pounds.
- The Company continues to expect original annual production and
operational costs guidance to be achieved.
This news release should be read in conjunction
with Trevali’s unaudited condensed consolidated financial
statements and management's discussion and analysis for the three
and nine months ended September 30, 2018, which is available on
Trevali's website and on SEDAR at www.sedar.com. Certain financial
information is reported herein using non-IFRS measures. Please
refer to “Use of Non-IFRS Financial Performance Measures”
below.
“Clearly Q3 was a challenging quarter from an
African logistics and commodity price volatility perspective.
Namibian shipments occurred immediately post quarter, we continue
to focus on Perkoa concentrate haulage, commodity prices are
currently stable and the macro zinc price environment remains
constructive" stated Dr. Mark Cruise, Trevali's President and Chief
Executive Officer. "Operationally, Caribou’s guidance was adjusted
downwards to allow the site to focus on increasing development to
provide additional mine flexibility going forward. This was
largely offset by another stellar production quarter from Perkoa,
with the net result that the Company remains on track to achieve
annual production guidance.”
Q3-2018 Financial Results Conference
Call:The Company will host a conference call and webcast
at 10:30AM Eastern Time on Thursday, November 8, 2018 to review the
Q3-2018 operating and financial results. Participants are advised
to dial in 5 minutes prior to the scheduled start time of the
call.
Conference call dial-in details:Date: Thursday,
November 8, 2018 at 10:30AM Eastern TimeToll-free (North America):
1-877-291-4570International: 1-647-788-4919Webcast:
http://www.gowebcasting.com/9675
1 Please refer to “Use of Non-IFRS Financial
Performance Measures” below.
Consolidated Financial
Results
($ millions, except per-share
amounts) |
Three months ended
September 30 |
Nine months ended
September 30 |
|
2018 |
|
|
2017 |
|
|
2018 |
|
2017 |
|
Revenues, net |
|
$30.5 |
|
|
$64.4 |
|
|
$279.2 |
|
$141.8 |
|
(Loss) income from mining operations |
|
($34.2) |
|
|
$28.4 |
|
|
$48.5 |
|
$48.2 |
|
Net (loss) income |
|
($30.8) |
|
|
($7.8) |
|
|
$21.2 |
|
($4.9) |
|
Basic (loss) income per share |
|
($0.04) |
|
|
($0.01) |
|
|
$0.02 |
|
($0.01) |
|
Consolidated Production
Results
|
Three months ended
September 30 |
Nine months ended
September 30 |
|
2018 |
2017(1) |
|
2018 |
2017(1) |
Tonnes mined |
|
652,904 |
|
552,385 |
|
2,250,284 |
|
1,295,140 |
Tonnes milled |
|
753,122 |
|
567,552 |
|
2,317,271 |
|
1,431,774 |
Payable production: Zinc
(pounds) Zinc (tonnes) Lead
(pounds) Lead (tonnes) Silver
(ounces) |
|
101,593,54246,0829,158,9964,154306,678 |
|
58,425,05626,50112,474,3795,658433,442 |
|
304,224,094137,99431,986,97114,509976,056 |
|
120,320,43354,57632,370,13714,6831,164,608 |
Cash Cost per tonne Milled (2) |
|
$67 |
|
$54 |
|
$66 |
|
$51 |
C1 Cash Cost per pound (2) |
|
$0.72 |
|
$0.53 |
|
$0.73 |
|
$0.61 |
All-In Sustaining Cost per pound (2) |
|
$0.87 |
|
$0.75 |
|
$0.88 |
|
$0.80 |
Consolidated Sales Results
|
Three months ended
September 30 |
Nine months ended
September 30 |
|
2018 |
2017(1) |
|
2018 |
2017(1) |
Zinc concentrate (dry metric tonnes) |
|
84,264 |
|
49,346 |
|
306,853 |
|
119,869 |
Lead concentrate (dry metric tonnes) |
|
9,079 |
|
13,835 |
|
35,447 |
|
38,816 |
Payable sales: Zinc (pounds)
Zinc (tonnes) Lead (pounds) Lead
(tonnes) Silver (ounces) |
|
75,512,58034,2528,089,9243,670281,196 |
|
43,892,81519,90912,068,5285,474434,418 |
|
279,223,613126,65429,206,85713,248932,399 |
|
105,115,82047,68031,605,31214,3361,142,631 |
Revenues, net (millions) (3) |
|
$30.5 |
|
$64.4 |
|
$279.2 |
|
$141.8 |
(1) Q3-2017 and nine months September 30, 2017
consolidated production and sales include only September for Rosh
Pinah and Perkoa. Trevali acquired the Perkoa and Rosh Pinah mines
on August 31, 2017.(2) Please refer to “Use of Non-IFRS
Financial Performance Measures” below.(3) Revenues include
effects of settlement adjustments on sales from prior quarters and
is calculated on a 100% basis.
Perkoa Mine, Burkina Faso:
Q3 production was 44.4 million pounds (20,132
tonnes) of payable zinc. Metal sales for the quarter was 38.4
million pounds (17,418 tonnes) of zinc for net revenue of $15.5
million, resulting in an EBITDA1 loss of $6.8 million for the three
months. The lower revenues were driven primarily by a decline in
zinc prices and lower sales volumes.
Mine output and mill throughput for the quarter
were 171,739 tonnes and 183,367 tonnes of ore, respectively. Given
the strong performance over the first nine months of 2018, Perkoa’s
zinc production guidance has been raised to 172 to 180 million
pounds payable metal (78,000 to 81,650 tonnes), up from prior 2018
guidance of 164 to 174 million payable pounds of zinc (74,400 to
78,950 tonnes).
Perkoa Production Results
|
Three months ended
September 30 |
Nine months ended
September 30 |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Tonnes mined |
|
171,739 |
|
67,274 |
|
546,448 |
|
67,274 |
Tonnes milled |
|
183,367 |
|
57,810 |
|
539,333 |
|
57,810 |
Payable production: Zinc
(pounds) Zinc (tonnes) |
|
44,383,33020,132 |
|
15,109,4236,854 |
|
136,409,95161,875 |
|
15,109,4236,854 |
Cash Cost per tonne milled (1) |
|
$103 |
|
$94 |
|
$101 |
|
$94 |
C1 Cash Cost per pound (1) |
|
$0.79 |
|
$0.49 |
|
$0.77 |
|
$0.49 |
All-In Sustaining Cost per pound (1) |
|
$0.84 |
|
$0.82 |
|
$0.84 |
|
$0.82 |
Perkoa Sales Results
|
Three months ended
September 30 |
Nine months ended
September 30 |
|
|
2018 |
2017 |
|
2018 |
2017 |
Zinc concentrate (dry metric tonnes) |
|
41,849 |
– |
|
137,001 |
– |
Payable sales: Zinc
(pounds) Zinc (tonnes) |
|
38,399,62617,418 |
–– |
|
129,817,46358,884 |
–– |
Revenues, net (millions) (2) |
|
$15.5 |
– |
|
$114.4 |
– |
(1) Please refer to “Use of Non-IFRS Financial Performance
Measures” below.(2) Revenues include effects of settlement
adjustments on sales from prior quarters and is calculated on a
100% basis.
Rosh Pinah Mine, Namibia:
Q3 production was 25.1 million pounds (11,368
tonnes) of payable zinc, 1.0 million pounds (439 tonnes) of
payable lead and 16,524 ounces of payable silver. Metal sales for
the quarter were 6.7 million pounds (3,056 tonnes) of zinc (lead
concentrate sales are scheduled for November 2018). The Q3 EBITDA1
loss was $0.7 million primarily due to limited sales as a result of
inventory build-up due to moisture issues impacting concentrate
drying time. The inventory build-up is expected to be reduced in
the fourth quarter, with 25,472 dry metric tonnes of zinc
concentrate already shipped in October, representing 87% of the
concentrate volume produced in the third quarter.
Mine output and mill throughput for the quarter
were 136,810 tonnes and 141,860 tonnes, respectively. Milled
tonnage was reduced quarter-over-quarter to better manage float
cell capacity as higher zinc feed grades were processed, ultimately
resulting in a 20% increase in zinc production over the second
quarter. As a result, cost per tonne milled were impacted, however,
on a metal unit basis, the C1 cash cost and AISC remain largely
unchanged from the previous quarter. Business improvement programs
are focusing on reducing the bottleneck in the mill and long-term
mill infrastructure improvements to more efficiently process
Western Ore field mineralization, which comprises the bulk of the
current reserve base.
Rosh Pinah Production
Results
|
Three months ended
September 30 |
Nine months ended
September 30 |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Tonnes mined |
|
136,810 |
|
60,045 |
|
468,941 |
|
60,045 |
Tonnes milled |
|
141,860 |
|
56,630 |
|
492,779 |
|
56,630 |
Payable production: Zinc
(pounds) Zinc (tonnes) Lead
(pounds) Lead (tonnes) Silver
(ounces) |
|
25,062,75811,368968,37643916,524 |
|
7,974,5943,6171,295,78758819,217 |
|
68,719,66531,1717,040,0643,19390,355 |
|
7,974,5943,6171,295,78758819,217 |
Cash Cost per tonne milled (1) |
|
$66 |
|
$50 |
|
$55 |
|
$50 |
C1 Cash Cost per pound (1) |
|
$0.48 |
|
$0.66 |
|
$0.62 |
|
$0.66 |
All-In Sustaining Cost per pound (1) |
|
$0.71 |
|
$0.94 |
|
$0.82 |
|
$0.94 |
Rosh Pinah Sales Results
|
Three months ended
September 30 |
Nine months ended
September 30 |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Zinc concentrate (dry metric tonnes) |
|
7,789 |
|
9,723 |
|
57,785 |
|
9,723 |
Lead concentrate (dry metric tonnes) |
|
– |
|
– |
|
5,388 |
|
– |
Payable sales: Zinc
(pounds) Zinc (tonnes) Lead
(pounds) Lead (tonnes) Silver
(ounces) |
6,736,8223,056––– |
9,035,1084,098––– |
|
52,326,07223,7354,421,3692,00654,050 |
9,035,1084,098––– |
Revenues, net (millions) (2) |
|
$0.3 |
|
$8.3 |
|
$55.0 |
|
$8.3 |
(1) Please refer to “Use of Non-IFRS Financial Performance
Measures” below.(2) Revenues include effects of settlement
adjustments on sales from prior quarters and is calculated on a
100% basis.
Caribou Mine, Canada:
Q3 production was 18.6 million pounds (8,458
tonnes) of payable zinc, 6.1 million pounds (2,769 tonnes) of
payable lead and 167,114 ounces of payable silver. Metal sales for
the quarter were 18.3 million pounds (8,306 tonnes) of zinc, 6.0
million pounds (2,743 tonnes) of lead and 163,970 ounces silver.
The Q3 EBITDA1 loss was $8.6 million due to lower commodity
prices.
Mine production for the quarter was 197,356
tonnes and mill throughput was 227,596 tonnes. During October 2018
the Company lowered its 2018 production estimate for the Caribou
Mine due to challenging hanging wall rock mass conditions.
Specifically, changes to the geotechnical control management were
required, primarily the move to increased use of cemented rock fill
in place of unconsolidated fill implemented during the quarter, in
addition to increased development to ensure sufficient flexibility
in the mine plan from 2019 onwards.
Caribou Production Results
|
Three months ended
September 30 |
Nine months ended
September 30 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Tonnes mined |
|
197,356 |
|
241,866 |
|
702,506 |
|
687,234 |
Tonnes milled |
|
227,596 |
|
234,007 |
|
710,349 |
|
692,579 |
Payable production: Zinc
(pounds) Zinc (tonnes) Lead
(pounds) Lead (tonnes) Silver
(ounces) |
|
18,646,8248,4586,104,3562,769167,114 |
|
20,770,6499,4217,256,2193,291220,012 |
|
58,256,34126,42519,778,4468,971561,954 |
|
58,269,14726,43022,226,36210,082640,653 |
Cash Cost per tonne milled (1) |
|
$62 |
|
$59 |
|
$62 |
|
$60 |
C1 Cash Cost per pound (1) |
|
$0.89 |
|
$0.53 |
|
$0.75 |
|
$0.65 |
All-In Sustaining Cost per pound (1) |
|
$1.11 |
|
$0.60 |
|
$0.94 |
|
$0.74 |
Caribou Sales Results
|
Three months ended
September 30 |
Nine months ended
September30 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Zinc concentrate (dry metric tonnes) |
|
20,814 |
|
22,992 |
|
66,918 |
|
65,449 |
Lead concentrate (dry metric tonnes) |
|
7,099 |
|
9,777 |
|
25,116 |
|
28,838 |
Payable sales: Zinc
(pounds) Zinc (tonnes) Lead
(pounds) Lead (tonnes) Silver
(ounces) |
|
18,311,5448,3066,047,8062,743163,970 |
|
20,566,1299,3297,791,2023,534231,438 |
|
57,859,84526,24519,733,6198,951567,921 |
|
57,843,28526,23722,752,48910,320642,888 |
Revenues, net (millions) (2) |
|
$7.4 |
|
$33.5 |
|
$65.2 |
|
$81.4 |
(1) Please refer to “Use of Non-IFRS Financial Performance
Measures” below.(2) Revenues include effects of settlement
adjustments on sales from prior quarters.
Santander Mine, Peru:
Q3 production was 13.5 million pounds (6,124
tonnes) of payable zinc, 2.1 million pounds (946 tonnes) of payable
lead and 123,040 ounces of payable silver. Metal sales for the
quarter were 12.1 million pounds (5,472 tonnes) of zinc, 2.0
million pounds (926 tonnes) of lead and 117,226 ounces silver. The
Q3 EBITDA1 loss was $1.5 million due to lower sales and lower
commodity prices.
Mine production for the quarter was 146,999
tonnes and mill throughput was 200,299 tonnes. After completing the
scheduled major mill maintenance program in March 2018, the mill
achieved throughput of 223,884 tonnes (an operational record) and
mine output of 198,318 tonnes during the second quarter. During Q3,
the Santander Mine’s main access road was periodically blocked by a
small group of community members and other persons not affiliated
with the mine. This blockade was lifted late September 2018 and
full production resumed within the week. Due to the blockade, mine
and mill production for the third quarter was down by 26% and 11%,
respectively, from the previous quarter (the mill operations
processed its ore stockpiles and continued to re-process its
tailings). The Company remains on track to achieve 2018 zinc
production guidance at Santander.
Santander Production Results
|
Three months
ended September 30 |
Nine months ended
September 30 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Tonnes mined |
|
146,999 |
|
183,200 |
|
532,390 |
|
480,587 |
Tonnes milled |
|
200,299 |
|
219,105 |
|
574,810 |
|
624,755 |
Payable production: Zinc
(pounds) Zinc (tonnes) Lead
(pounds) Lead (tonnes) Silver
(ounces) |
|
13,500,6306,1242,086,264946123,040 |
|
14,570,3916,6093,922,3731,779194,214 |
|
40,838,13718,5245,168,4612,344323,746 |
|
38,967,27117,6758,847,9884,013504,739 |
Cash Cost per tonne milled (1) |
|
$41 |
|
$40 |
|
$47 |
|
$38 |
C1 Cash Cost per pound (1) |
|
$0.69 |
|
$0.50 |
|
$0.77 |
|
$0.59 |
All-In Sustaining Cost per pound (1) |
|
$0.89 |
|
$0.77 |
|
$1.03 |
|
$0.85 |
Santander Sales Results
|
Three months
endedSeptember 30 |
Nine months ended
September 30 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Zinc concentrate (dry metric tonnes) |
|
13,811 |
|
16,631 |
|
45,148 |
|
44,314 |
Lead concentrate (dry metric tonnes) |
|
1,980 |
|
4,058 |
|
4,943 |
|
9,113 |
Payable sales: Zinc
(pounds) Zinc (tonnes) Lead
(pounds) Lead (tonnes) Silver
(ounces) |
|
12,064,5885,4722,042,118926117,226 |
|
14,291,5786,4834,277,3261,940202,980 |
|
39,220,23317,7905,051,8692,291310,428 |
|
38,237,42617,3448,852,8234,016499,743 |
Revenues, net (millions) (2) |
|
$7.3 |
|
$22.6 |
|
$44.6 |
|
$52.1 |
(1) Please refer to “Use of Non-IFRS Financial Performance
Measures” below.(2) Revenues include effects of settlement
adjustments on sales from prior quarters.
Q3-2018 OPERATING COSTS AND ANNUAL COST GUIDANCE 1, 2,
3Cost guidance has been updated to reflect Caribou’s
revised cost forecast.
Q3-2018 Operating Costs and Annual Cost
Guidance (US$ per tonne)
Mine |
2018 Annual Operating Cost
Guidance |
Q1-2018 Operating
Costs |
Q2-2018 Operating
Costs |
Q3-2018 Operating
Costs |
YTD-2018 Operating
Costs |
Perkoa (100%) |
$103 – $113 |
|
$112 |
|
$87 |
|
$103 |
|
$101 |
Rosh Pinah (100%) |
$49 – $54 |
|
$54 |
|
$47 |
|
$66 |
|
$55 |
Caribou4 |
$63 – $69 |
|
$64 |
|
$60 |
|
$62 |
|
$62 |
Santander |
$38 – $42 |
|
$65 |
|
$40 |
|
$41 |
|
$47 |
Total |
$65 – $68 |
|
$73 |
|
$58 |
|
$67 |
|
$66 |
1 Constitutes forward-looking information; see
“Cautionary Note Regarding Forward-Looking
Statements”.2 Trevali’s ownership interest is 90% of
Perkoa and 90% of Rosh Pinah.3 Costs are
preliminary and subject to adjustment.4 Caribou
Operating Cost Guidance was increased from $55 – $61 to $63 – $69
per tonne milled (see October 22, 2018 news release).
2018 CONSOLIDATED PRODUCTION GUIDANCE
Production guidance for the year has been
updated to reflect revised forecasts for Caribou and Perkoa. The
Company remains on target to achieve the lower end of its initial
2018 production guidance of 400 to 427 million pounds zinc, as
announced on January 15, 2018.
2018 Consolidated Production Guidance (1,
2)
Mine |
Zinc Production |
Lead Production |
Silver Production |
Perkoa (100%) |
172 – 180 million lbs78,000 – 81,650
tonnes |
N/A |
N/A |
Rosh Pinah (100%) |
95 – 105 million lbs43,100 – 47,640
tonnes |
5.7 – 6.0 million lbs2,600 – 2,700
tonnes |
123 – 129 k ozs |
Caribou |
70 – 75 million lbs31,750 – 34,000
tonnes |
23.0 – 25.0 million lbs10,400 – 11,330
tonnes |
627 – 658 k ozs |
Santander |
55 – 58 million lbs24,950 – 26,320
tonnes |
11.0 – 11.6 million lbs5,000 – 5,300
tonnes |
654 – 687 k ozs |
Total |
392 – 418 million
lbs177,800 – 189,610 tonnes |
39.7 – 42.6 million
lbs18,000 – 19,330 tonnes |
1,404 – 1,474 k ozs |
(1) Constitutes forward-looking information; see
“Cautionary Note Regarding Forward-Looking Statements”.(2)
Trevali’s ownership interest is 90% of Perkoa and 90% of Rosh
Pinah.
Exploration Update – Third
Quarter:
Trevali’s 2018 exploration program is part of a
medium to long-range exploration strategy focused on brownfield and
near-mine exploration targets. The primary aim is to expand and
discover new mineral resources adjacent to existing mine
infrastructure, replace mined inventory, grow sustainable
production, extend expected mine life and ultimately, contingent on
success, provide production growth optionality to the
operations.
The 2018 exploration program includes
approximately 60,000 metres of diamond drilling for surface and
underground targeting in-to-near mine resource growth. In the third
quarter, Trevali’s exploration drilling totaled approximately
25,000 metres.
Perkoa, Burkina FasoDuring the
quarter underground resource expansion drilling continued to return
high-grade zinc results up to 320 metres below the current modelled
mining level. Highlights include 18.3 metres at 13.2% zinc,
including 6.75 metres at 18.78% zinc.
Regionally, the exploration team continues to
advance high priority targets along the Perkoa Mine Horizon. At the
Byrhado prospect, located approximately 10 kilometres to the NE of
the Perkoa mill, gossan horizons are hosted within a folded package
of siliceous felsic volcanics, tuffs and sediments that are cross
cut by a quartz stockwork. All samples collected to date are
geochemically anomalous. Drill testing has commenced following the
end of the prolonged 2018 wet season. A third surface drill rig is
currently being mobilized in order to test the multiple high
priority targets within the exploration lease during the remainder
of the year.
Rosh Pinah, NamibiaOngoing
underground exploration continues to extend and define the emerging
NW extension in the Western Orefield. Highlights during the quarter
include:
- 9.11 metres grading 15.56% Zn, 0.13% Pb, 3.61 g/t Ag;
- 19.41 metres grading 13.82% Zn, 1.88% Pb, 16.44 g/t Ag;
and
- 35.50 metres grading 6.10% Zn, 1.54% Pb, 9.42 g/t Ag.
The exploration team also re-targeted the Rosh
Pinah deposit from first principals with a focus on the
historically mined Eastern and Southern Orefield. The exploration
initiative identified numerous priority targets in an area
previously or largely considered geologically closed. An initial
approximately 10,000-metre in-mine and regional discovery drill
program has commenced.
Caribou Mine, CanadaA
10,000-metre exploration and definition drill program is in
progress and is targeting the down-dip extensions of the East Limb,
Hinge Zone, and the newly discovered CX Zone, all of which remain
open for extension. Drilling results with resources update are
expected in 2019-Q1.
Murray Brook, CanadaThe Murray
Brook deposit is located 10 kilometres west of the Caribou Mill and
10 kilometres east of the Restigouche Deposit along the Caribou ore
horizon.
Trevali has an option to acquire up to a 75%
interest in the Murray Brook Project by providing approximately
$5.8 million (CAD$7.5 million) in financing for Puma Exploration
Inc. (“Puma”) to enable Puma to close its acquisition of the
project (see new released dated March 2, 2018 for additional
details).
In conjunction with joint venture partner Puma,
a geotechnical and metallurgical drill program was completed to
provide material for ongoing mine design and planning purposes.
Metallurgical recovery testing is in process at RPC in Fredericton,
New Brunswick with results anticipated in Q4 2018.
Santander Exploration,
PeruExploration drilling continues to test the Magistral
deposit extensions approximately 350 vertical metres below current
development, in addition to continuing to extend the emerging
high-grade zinc Pipe target at depth. Highlights during the quarter
include:
- Magistrals – 3.8 metres grading 9.7% Zn, 12% Pb and 72 g/t Ag
and 10.7 metres grading 6.4% Zn and 21 g/t Ag
- Pipe Target – 16.4 metres grading 15.6% Zn and 1.1% Cu,
including 6.2 metres grading 20% Zn and 0.8% Cu; and 7.9 metres
grading 14.4% Zn, 1.2% Cu and 43 g/t Ag
The approximately 45-square-kilometre Santander
exploration block remains under-explored and recent geophysical and
geochemical surveys have defined several high priority targets
which require follow up work programs.
Intention to Launch Normal Course Issuer
Bid
Subject to the approval of the Toronto Stock
Exchange (“TSX”), Trevali intends to launch a normal course issuer
bid (“NCIB”) permitting the purchase for cancellation, at its
discretion during the 12 months following acceptance by the TSX, of
up to 6.5% of the “public float” (calculated in accordance with the
rules of the TSX) of the Company’s common shares. Purchases under
the NCIB, if approved, will be made through the facilities of the
TSX or alternative trading systems, by means of open market
transactions or by such other means as may be permitted by the TSX
and under applicable securities laws. The price that the Company
will pay for common shares in open market transactions will be the
market price at the time of purchase.
Trevali believes that initiating a NCIB at the
current time represents an attractive use of cash with now an
opportune time to return cash to shareholders. The actual number of
common shares that will be repurchased, and the timing of any such
purchases, will be determined by Trevali, subject to market
conditions, Trevali’s share price, alternative uses of cash, other
factors, and the limits imposed by the TSX.
Qualified Person and Quality
Control/Quality AssuranceEurGeol Dr. Mark D. Cruise,
Trevali's President and CEO, and Paul Keller, P.Eng, Trevali’s
Senior Vice President - Major Projects & Technical Support, are
qualified persons as defined by NI 43-101, and have supervised the
preparation of the scientific and technical information that forms
the basis for this news release. Dr. Cruise is not independent of
the Company as he is an officer, director and shareholder. Mr.
Keller is not independent of the Company as he is an officer and
shareholder.
ABOUT TREVALI MINING
CORPORATIONTrevali is a zinc-focused, base metals company
with four mines: the 90% owned Perkoa mine in Burkina Faso. the 90%
owned Rosh Pinah mine in Namibia, the wholly-owned Caribou mine in
the Bathurst Mining Camp of northern New Brunswick, and the
wholly-owned Santander mine in Peru.
The shares of Trevali are listed on the TSX
(symbol TV), the OTCQX (symbol TREVF), the Lima Stock Exchange
(symbol TV), and the Frankfurt Exchange (symbol 4TI). For further
details on Trevali, readers are referred to the Company’s website
(www.trevali.com) and to Canadian regulatory filings on SEDAR at
www.sedar.com.
On Behalf of the Board of Directors ofTREVALI MINING
CORPORATION“Mark D. Cruise” (signed)Mark D. Cruise,
President
Contact Information:Steve Stakiw, Vice
President - Investor Relations and Corporate CommunicationsEmail:
sstakiw@trevali.comPhone: (604) 488-1661 / Direct: (604)
638-5623
Use of Non-IFRS Financial Performance
MeasuresIn this news release we refer to the following
non-IFRS financial performance measures: Earnings Before Interest,
Taxes, Depreciation and Amortization (“EBITDA”), Cash operating
cost per tonne milled, C1 Cash Cost per pound and All-In Sustaining
Costs (“AISC”) per pound. These measures are not recognized under
IFRS as they do not have any standardized meaning prescribed by
IFRS and are therefore unlikely to be comparable to similar
measures presented by other issuers. Management uses these measures
internally to evaluate the underlying operating performance of the
Company for the reporting periods presented. The use of these
measures enables management to assess performance trends and to
evaluate the results of the underlying business of the Company.
Management understands that certain investors, and others who
follow the Company’s performance, also assess performance in this
way.
Management believes that these measures reflect
the Company’s performance and are useful indicators of its expected
performance in future periods. This data 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.
EBITDA and EBIT:EBITDA provides insight into
Trevali’s overall business performance (a combination of cost
management and growth) and is the corresponding flow drivers
towards the objective of achieving industry-leading returns. This
measure assists readers in understanding the ongoing cash
generating potential of the business including liquidity to fund
working capital, servicing debt, and funding capital expenditures
and investments opportunities. EBITDA is profit attributable to
shareholders before net finance expense, income and resource taxes
and depreciation, depletion, and amortization. EBIT is EBITDA after
depreciation, depletion, and amortization. Other companies may
calculate EBITDA and EBIT differently.
Cash operating cost per tonne milled:Cash
operating cost per tonne milled measures the mine site cash
operating cost per tonne milled. This measure includes mine
operating production expenses such as mining, processing,
administration, indirect charges such as surface maintenance and
camp expenses, and inventory stock movement divided by tonnes
milled. Cash operating cost per tonne milled does not include
smelting and refining, distribution (freight), royalties,
by-product revenues, depreciation, depletion, amortization,
reclamation, and capital sustaining and exploration expenses.
C1 Cash Cost per pound:C1 Cash Cost per pound
measures the cash costs to produce a pound of payable zinc. This
measure includes mine operating production expenses such as mining,
processing, administration, indirect charges (including surface
maintenance and camp), and inventory stock movement, smelting,
refining and freight, distribution, royalties, and by-product metal
revenues divided by pounds of payable zinc produced. C1 Cash Cost
per Pound does not include depreciation, depletion, and
amortization, reclamation expenses, capital sustaining and
exploration expenses.
AISC per pound:All-In Sustaining Cost per pound
measures the cash costs to produce a pound of payable zinc plus the
capital sustaining costs to maintain the mine and mill. This
measure includes the C1 Cash Cost per Pound and capital sustaining
costs divided by pounds of payable zinc produced. All-In Sustaining
Cost per Pound does not include depreciation, depletion, and
amortization, reclamation and exploration expenses.
See “Cautionary Notes Regarding Forward-Looking
Statements” below as well as “Use of Non-IFRS Financial Performance
Measures” in our Management’s Discussion and Analysis for the three
and nine months ended September 30, 2018.
Cautionary Note Regarding
Forward-Looking StatementsThis news release contains
“forward-looking information” within the meaning of the Canadian
securities legislation and “forward-looking statements” within the
meaning of Section 27A of the United States Securities Act of 1933,
as amended, Section 21E of the United States Exchange Act of 1934,
as amended, the United States Private Securities Litigation Reform
Act of 1995, or in releases made by the United States Securities
and Exchange Commission, all as may be amended from time.
Statements containing forward-looking information express, as at
the date of this news release, the Company’s plans, estimates,
forecasts, projections, expectations, or beliefs as to future
events or results. Such forward-looking statements and information
include, but are not limited to statements as to: the timing and
amount of estimated future production; the estimation of mineral
resources and mineral reserves; costs and timing of development;
operating efficiencies, including the ability to manage water while
reducing power consumption, costs and expenditures; expectations
regarding milling operations and metal production shortfalls; metal
output and throughput rates; cost guidance and anticipated annual
results; anticipated results of future exploration; forecast future
metal prices; the Company’s intentions regarding the normal course
issuer bid; whether the Company will receive the requisite
acceptance of the TSX for the normal course issuer bid; and the
number of common shares that might be purchased by the Company
under the normal course issuer bid and the terms and conditions of
any such purchases.
These statements reflect the Company’s current
views with respect to future events and are necessarily based upon
a number of assumptions and estimates that, while considered
reasonable by the Company, are inherently subject to significant
business, economic, competitive, political and social uncertainties
and contingencies. If any assumptions are untrue, it could cause
actual results, performance or achievements to be materially
different from future results, performance or achievements
expressed or implied by such statements. Assumptions have been made
regarding, among other things, present and future business
strategies and the environment in which the Company will operate in
the future, including commodity prices, anticipated costs and
ability to achieve goals.
Forward-looking statements are subject to known
and unknown risks, uncertainties and other important factors that
may cause the Company’s actual results, level of activity,
performance or achievements to be materially different from those
expressed or implied by such forward-looking statements, including
but not limited to: risks related to joint venture operations;
fluctuations in spot and forward markets for silver, zinc, base
metals and certain other commodities (such as natural gas, fuel oil
and electricity); fluctuations in currency markets; risks related
to the technological and operational nature of the Company’s
business; changes in national and local government, legislation,
taxation, controls or regulations and political or economic
developments in Canada, the United States, Peru, Namibia, Burkina
Faso, or other countries where the Company may carry on business in
the future; risks and hazards associated with the business of
mineral exploration, development and mining (including
environmental hazards, industrial accidents, unusual or unexpected
geological or structural formations, pressures, cave-ins and
flooding); risks relating to the credit worthiness or financial
condition of suppliers, refiners and other parties with whom the
Company does business; inadequate insurance, or inability to obtain
insurance, to cover these risks and hazards; employee relations;
relationships with and claims by local communities and indigenous
populations; availability and increasing costs associated with
mining inputs and labour; the speculative nature of mineral
exploration and development, including the risks of obtaining
necessary licenses and permits and the presence of laws and
regulations that may impose restrictions on mining; diminishing
quantities or grades of Mineral Resources as properties are mined;
global financial conditions; business opportunities that may be
presented to, or pursued by, the Company; the Company’s ability to
complete and successfully integrate acquisitions and to mitigate
other business combination risks; challenges to, or difficulty in
maintaining, the Company’s title to properties and continued
ownership thereof; the actual results of current exploration
activities, conclusions of economic evaluations, and changes in
project parameters to deal with unanticipated economic or other
factors; increased competition in the mining industry for
properties, equipment, qualified personnel, and their costs, as
well as other risks as more fully described in the Company’s annual
information form for the year ended December 31, 2017, which is
available on the Company’s website (www.trevali.com) and filed
under our profile on SEDAR (www.sedar.com). Investors are cautioned
against attributing undue certainty or reliance on forward-looking
statements. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially, there may be other factors that cause results not to be
as anticipated, estimated, described or intended. The Company does
not intend, and does not assume any obligation, to update these
forward-looking statements or information to reflect changes in
assumptions or changes in circumstances or any other events
affecting such statements or information, other than as required by
applicable law.
Note to United States
InvestorsIn accordance with applicable Canadian securities
regulatory requirements, all mineral resource estimates of the
Company disclosed or incorporated by reference in this news release
have been prepared in accordance with Canadian National Instrument
43-101 - Standards of Disclosure for Mineral Projects, classified
in accordance with Canadian Institute of Mining Metallurgy and
Petroleum's “CIM Standards on Mineral Resources and Reserves
Definitions and Guidelines”.
The Company uses the terms "measured mineral
resources", "indicated mineral resources" and "inferred mineral
resources". While these terms are recognized by Canadian securities
regulatory authorities, they are not recognized by the United
States Securities and Exchange Commission. US investors are
cautioned not to assume that any part or all of the material in
these categories will ever be converted into reserves.
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