Trevali Mining Corporate (“Trevali” or the “Company”)
(TSX:TV; BVL: TV; OTCQX: TREVF; Frankfurt: 4TI) reports
preliminary fourth quarter (“Q4”) and 2018 full year production and
sales results, and provides its production, cash costs, and capital
and exploration expenditure guidance for 2019.
Dr. Mark Cruise, Trevali’s President and CEO
stated, “2018 was an eventful year for Trevali. It was the
Company’s first full year operating in Africa and we successfully
increased production at both Perkoa and Rosh Pinah over 2017 levels
and are on track to extend mine lives through our focus on
exploration. Despite the challenges faced at Caribou, Trevali
produced 407 million lbs of payable zinc in 2018, in-line with our
initial guidance set out one year ago. Heading into 2019, the
Company continues to drive forward on creating value through
exploration, evaluating ways to reduce costs and maximize
production and looks forward to delivering increased shareholder
value.”
Key highlights include:
- Total 2018 zinc production of 407
million payable pounds, in-line with initial guidance of 400 – 427
million pounds set at the start of 2018. Total lead production of
41.7 million payable pounds and silver production of 1.2 million
ounces.
- Consolidated Q4 production of 103
million pounds payable zinc, 9.7 million payable pounds of lead and
285,423 payable ounces of silver.
- Zinc concentrate inventories
reduced to 57 thousand DMT at year end, a 26 thousand DMT reduction
from the third quarter. Normal shipping schedules were realized at
all operations in the fourth quarter and there were no material
inventory backlogs that affected concentrate sales.
- Repurchased 12.7 million shares as
part of the normal course issuer bid.
- 2019 zinc production guidance of
361 – 401 million payable pounds, with the decline from 2018
attributed to the anticipated grade declines at Perkoa and Rosh
Pinah. Lead and silver production are expected to modestly increase
to 44 to 49 million payable pounds and 1.32 to 1.47 million ounces
respectively as higher grades are mined.
- We expect production in 2019 at
Caribou to be in-line with 2018 as site continues to advance
underground development to increase operating flexibility. At
Santander, higher grades and increased throughput are expected to
result in increased zinc production levels in 2019.
- Operating costs in 2019 are
expected to be higher than those in 2018 as additional investments
are made to improve operating flexibility and ensure stable
operating results.
- Capital and committed exploration
expenditures are expected to be $74 million and $8 million,
respectively, with 2019 exploration to focus on regional targets at
Perkoa and near-mine opportunities at Santander.
Table 1: Preliminary Consolidated Q4-2018
Production Results |
|
Three months endedDecember 31 |
Twelve months endedDecember 31 |
2018 |
2017 |
2018 |
2017(1) |
Tonnes mined |
723,384 |
832,878 |
3,253,617 |
2,128,018 |
Tonnes milled |
737,496 |
818,690 |
3,300,948 |
2,250,464 |
Payable production: Zinc (million
pounds) Zinc (tonnes)
Lead (million pounds)
Lead (tonnes) Silver
(thousand ounces) |
102.746,5629.74,406285 |
104.847,53013.56,103397 |
406.9184,54541.718,9151,171 |
225.1102,12245.820,7901,562 |
(1) Twelve months ending December 31, 2017 consolidated
preliminary production includes only September 1 to December 31,
2017 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.
Perkoa Mine, Burkina Faso
Perkoa delivered a strong performance in 2018
with annual production of 184 million pounds, materially above the
Company’s initial target of 155 – 165 million pounds. In 2019,
lower mined grades (estimated annual run-of-mine of 14.0% in 2019
versus 14.9% in 2018) will lead to reduced metal production and
consequently slightly higher operating costs.
The new high-efficiency heavy fuel oil power
plant is nearing completion. We expect cost savings of
approximately $5 per tonne to be realized once it is fully
operational. The reduction in power costs, however, is expected to
be mostly offset by reduced production levels, resulting in similar
costs per tonne as seen over recent quarters.
Record concentrate trucking during December
lowered site inventories to 24 kilotonnes at year end,
significantly below historic and anticipated inventory staging
levels ranging from 30 – 35 kilotonnes. The Company continues to
focus on logistic improvements and initiatives to minimize
concentrate levels as far as feasible.
Table 2: Perkoa Preliminary Q4-2018 Production
(100 percent basis) |
|
Three months endedDecember 31 |
Twelve months endedDecember 31 |
2018 |
2017 |
2018 |
2017(1) |
Tonnes mined |
161,815 |
203,635 |
708,263 |
270,909 |
Tonnes milled |
185,661 |
180,022 |
724,995 |
237,832 |
Payable production: Zinc (million
pounds) Zinc (tonnes) |
47.621,577 |
47.721,627 |
183.983,428 |
62.828,483 |
(1) Twelve months ending December 31, 2017 consolidated
preliminary production includes only September 1 to December 31,
2017. Trevali acquired the Perkoa mine on August 31, 2017.(2)
Please refer to “Use of Non-IFRS Financial Performance Measures”
below.
Rosh Pinah Mine, Namibia
Similar to the third quarter of 2018, harder ore
and head grades above mill design from the new Western Ore Field
resulted in lower throughput and recovery. Ongoing projects, such
as a new filter press, as well as flotation circuit and grinding
circuit modifications are budgeted to resolve these issues in 2019
and are being appropriately sized to facilitate any potential
future throughput increases. The increase in capital expenditures
planned for 2019 reflect these enhancements and are being
incorporated into the Rosh Pinah 2.0 study, which is evaluating an
increase in mill throughput by 50% and is advancing to P/BFS level
study with final results anticipated in H2 2019.
Table 3: Rosh Pinah Preliminary Q4-2018
Production |
|
Three months endedDecember 31 |
Twelve months ended December 31 |
2018 |
2017 |
2018 |
2017(1) |
Tonnes mined |
158,354 |
177,820 |
627,295 |
237,865 |
Tonnes milled |
149,201 |
171,020 |
641,980 |
227,650 |
Payable production: Zinc (million
pounds) Zinc (tonnes)
Lead (million pounds)
Lead (tonnes) Silver
(thousand ounces) |
25.411,6751.567722 |
21.39,6813.11,39849 |
94.242,7068.53,870104 |
29.313,2994.41,98668,533 |
(1) Twelve months ending December 31, 2017 consolidated
preliminary production includes only September 1 to December 31,
2017. Trevali acquired the Rosh Pinah mine on August 31, 2017.(2)
Please refer to “Use of Non-IFRS Financial Performance Measures”
below.
Caribou Mine, Canada
Planned remediation works (increased
development, ground support and installation of cemented fill in
key areas of the mine) remain on track to return the mine to normal
production levels in Q2 2019 but will result in higher operating
costs particularly in Q1. The technical team continues to evaluate
modifications to the extraction method in order to improve
productivity and decrease costs, in addition to ongoing short- and
long-term strategic reviews of the Bathurst Mining Camp.
Table 4: Caribou Preliminary Q4-2018
Production |
|
Three months endedDecember 31 |
Twelve months endedDecember 31 |
2018 |
2017 |
2018 |
2017 |
Tonnes mined |
184,635 |
250,225 |
887,141 |
937,459 |
Tonnes milled |
174,180 |
252,857 |
884,529 |
945,436 |
Payable production: Zinc (million
pounds) Zinc (tonnes)
Lead (million pounds)
Lead (tonnes) Silver
(thousand ounces) |
13.76,2145.52,485122 |
21.79,8268.73,941250 |
72.032,63925.311,456632 |
79.936,26430.914,026890 |
(1) Please refer to “Use of Non-IFRS Financial Performance
Measures” below.
Santander Mine, Peru
Over the course of the fourth quarter, Santander
transitioned to fully owner operated, recovered from third quarter
production disruptions and met its forecasted annual production
target, delivering a 2018 monthly zinc production record in
December. The mine is well positioned for production in 2019 with
all development in place for the year.
Table 5: Santander Preliminary Q4-2018
Production |
|
Three months endedDecember 31 |
Twelve months endedDecember 31 |
2018 |
2017 |
2018 |
2017 |
Tonnes mined |
218,580 |
201,198 |
750,970 |
681,785 |
Tonnes milled |
228,454 |
214,791 |
803,265 |
839,546 |
Payable production: Zinc (million
pounds) Zinc (tonnes)
Lead (million pounds)
Lead (tonnes) Silver
(thousand ounces) |
16.07,2362.71,244142 |
14.16,3961.776498 |
56.825,7607.93,588435 |
53.124,07610.54,779603 |
(1) Please refer to “Use of Non-IFRS Financial Performance
Measures” below.
2019 CONSOLIDATED PRODUCTION GUIDANCE
Consolidated production guidance for 2019 is
estimated between 361 – 401 million pounds of payable zinc, 44 – 49
million pounds of payable lead and 1.3 – 1.5 million ounces of
payable silver.
Table 6: 2019 Consolidated Production Guidance
(1&2) |
Mine |
2019 Zinc Production |
2019 Lead Production |
2019 Silver Production |
Perkoa (100%) |
151 – 168 million lbs68 – 76 ktonnes |
N/A |
N/A |
Rosh Pinah (100%) |
80 – 89 million lbs36 – 40 ktonnes |
10 – 11 million lbs4 – 5 ktonnes |
145 – 161 k ozs |
Caribou |
71 – 79 million lbs32 – 36 ktonnes |
24 – 27 million lbs11 – 12 ktonnes |
641 – 713 k ozs |
Santander |
59 – 65 million lbs27 – 29 ktonnes |
10 – 11 million lbs4 – 5 ktonnes |
536 – 595 k ozs |
Total |
361 – 401 million lbs163 – 181
ktonnes |
44 – 49 million lbs19 – 22
ktonnes |
1,322 – 1,469 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.
Consolidated operating costs are forecast to
range from $69 – $76 per tonne, with cash costs (net of by-product
credits) of between $0.81 – $0.88 per pound of zinc (see Table 7).
Including capital expenditures forecast of $74 million,
consolidated AISC are expected to range from $0.99 – $1.09 per
pound of zinc (for the purpose of AISC guidance, all capital is
considered to be sustaining). Relative to 2018, higher capital
expenditures at Rosh Pinah and Santander are planned, with
incremental spending on process plant upgrades (new filter press
and floatation and grinding circuit improvements) and power
infrastructure, respectively, the main drivers.
Table 7: 2019 Consolidated Operating Cost and
Capital Expenditure Guidance (1&2) |
Mine |
Operating Costs(per tonne) |
Cash Costs net ofBy-productCredits ($/lb Zn) |
All-in SustainingCosts ($/lb Zn) |
CapitalExpenditures ($M) |
Perkoa (100%) |
106 – 117 |
0.84 – 0.92 |
0.91 – 0.99 |
11 |
Rosh Pinah (100%) |
56 – 63 |
0.70 – 0.77 |
0.99 – 1.09 |
26 |
Caribou |
72 – 79 |
0.95 – 1.02 |
1.15 – 1.28 |
16 |
Santander |
45 – 49 |
0.71 – 0.78 |
1.02 – 1.13 |
21 |
Exploration |
– |
– |
– |
8 |
Total |
69 - 76 |
0.81 – 0.88 |
0.99 – 1.09 |
82 |
(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.
Quarterly Variability
Zinc: While production guidance
has been provided on an annual basis, we expect moderate production
fluctuations on a quarter-to-quarter basis due to mine scheduling.
Zinc production overall is forecast to be slightly stronger in the
second half of 2019, with Caribou in particular expected to deliver
a weaker quarter in Q1 as the Company completes the advanced rates
of development and production catches up in Q2 – Q4. Conversely,
Rosh Pinah is forecast to have a stronger start to 2019, with
production strongest in Q1 and declining thereafter as zinc grades
decline from approximately 10% to 8%. Due to the mining sequence,
lower grades are planned at Perkoa in Q2 and Q3.
Lead: Production is expected to
show more quarterly variability than zinc, with consolidated lead
production increasing in each successive quarter throughout 2019.
Lead grades at Santander and Rosh Pinah are forecast to increase
throughout the year, with Rosh Pinah expected to mine significantly
higher lead grades in the second half of 2019.
Operating costs: The Company
expects costs to generally be at their highest level for each mine
in Q1 with consolidated costs per tonne to range from $73 - $81 per
tonne during the quarter. Operating costs will be higher in Q1
compared to the yearly target due to the following:
- Increased mining scope to build inventories and further de-risk
annual production;
- Seasonal impact of winter at Caribou Mine and reduced mined ore
until planned development is in place;
- Benefit of the HFO generating plant at Perkoa is forecast to
improve costs starting in Q2;
- Seasonal pumping requirements at Santander Mine;
- Lower planned throughput due to planned maintenance.
Exploration – Targeting Resource and
Reserve Growth and Mine Life Extensions
The exploration group is on track to
successfully replace mined inventory at all the operations in
addition to modestly increasing resources. Specific
highlights include the emerging Santander Pipe deposit, which will
remain a focus for 2019 and material extensions to the Perkoa
deposit where the Hanging Wall zone was extended approximately 300
meters below the current mine plan. Finally, regional
exploration drilling commenced at Perkoa in Q4 and to date has
successfully intersected sulphide bearing (stringer – disseminated
to narrow massive zones – non-economic to date) VMS systems at
several of the targets. Drill testing is ongoing.
The 2019 exploration program will continue to
focus on brownfield, near-mine, exploration targets to expand and
discover new resources in proximity to existing mine infrastructure
and extend the current mine lives. For 2019, the Company intends to
invest a minimum $8.4 million on approximately 36,300 metres of
diamond drilling from surface and underground primarily focused on
the Perkoa and Santander mineral systems. Contingent on positive
results and available funds, additional funding may be deployed
towards further drilling.
Updated resource and reserve estimates at all
sites are expected to be completed at the end of the first quarter
of 2019.
Qualified Person and Quality
Control/Quality AssuranceEurGeol Dr. Mark D. Cruise,
Trevali's President and CEO, is a qualified person as defined by NI
43-101, has supervised the preparation of, and has verified 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.
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 in Canada, 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 MeasuresIn this
news release we refer to the following non-IFRS financial
performance measures: 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.
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; 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; and statements
relating to, among other things, the Company’s objectives,
strategies and intentions and its future financial and operating
performance.
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.
Source: Trevali Mining Corporation
Trevali Mining (TSX:TV)
Historical Stock Chart
From Jun 2024 to Jul 2024
Trevali Mining (TSX:TV)
Historical Stock Chart
From Jul 2023 to Jul 2024