All financial figures are in U.S. dollars.
Trevali Mining Corporation (“Trevali” or the
“Company”)
(TSX: TV; BVL: TV; OTCQX: TREVF; Frankfurt:
4TI) has released its audited annual financial results for
the year ending December 31, 2018, with a net loss of $231 million,
or ($0.27) per share, following non-cash impairment charges before
tax of $312 million. The Company posted EBITDA1 of ($177 million)
and adjusted EBITDA1 (before impairments) of $137.0 million on
total revenues of $403 million.
Summary:
- Total 2018 zinc production of 406.9 million payable pounds, in
line with initial guidance of 400 – 427 million payable
pounds set at the start of 2018. Total lead production of 41.7
million payable pounds and silver production of 1.3 million payable
ounces.
- Consolidated cash costs of $0.77 per pound of payable Zn
produced5 or $68 per tonne milled and all-in-sustaining costs5 of
$0.96 per pound of payable Zn produced.
- Concentrate sales revenue of $402.6 million, up approximately
22% versus $330.5 million in 2017.
- Annual EBITDA1 of negative $177 million and annual net loss of
$231 million or $0.27 per share. Annual Adjusted EBITDA1 of $137
million and Adjusted Earnings per Share of $0.04.
- Fourth quarter Adjusted EBITDA1 of $41 million and Adjusted
Earnings per Share of $0.01.
- Maintained strong liquidity with cash of $65.5 million,
Adjusted working capital position of $149 million, and net debt1
and total debt of $67.0 million and $132.4 million, respectively
(as of December 31, 2018). In addition, $129 million remains
available and undrawn on the revolving credit facility.
The negative EBITDA for year ended December 31,
2018 is due to the recognition of a non-cash impairment charge. The
Company completed an impairment analysis which considered the
indicators of impairment in accordance with IAS 36: Impairment of
Assets; and reduced the carrying value of its mine operations by a
net $263 million (comprised of $311.8 million impairment of
property, plant and equipment and exploration and evaluation
assets, goodwill and deferred tax recovery of $48.8 million). The
Company is fully compliant with its debt covenants following the
impairment.
Dr. Mark Cruise, Trevali's President and Chief
Executive Officer stated, “Over the past few months, we have
completed a thorough review of our assets, which resulted in the
non-cash impairment. However, efforts are underway at all our
operations to maximize operating efficiencies and the Company is
well positioned to improve operating performance going forward. In
2019, Trevali is placing an enhanced focus on improving
transportation logistics and starting-up a new, more efficient
power plant at Perkoa and is working with external consultant at
Caribou to evaluate alternative, lower-cost mining methods. At Rosh
Pinah, significant progress has been made over the past couple
months understanding the new Western Ore Field, which accounts for
approximately 80% of the mine’s reserves, with additional mill
investments underway this year and the RP2.0 optimization study
also progressing well. In Peru, the mine transitioned to fully
owner operated and is well positioned for production in 2019 with
all development in place for the year.”
“The full support of the Company’s banking
syndicate on the $275 million of revolving credit facility and our
healthy balance sheet place Trevali in a strong position to meet
its commitments in 2019 and invest for the future,” continued Dr.
Cruise. “We are committed to efficiently allocating capital,
balancing the need for continued exploration and capital
investment, with debt reduction and repurchasing shares under our
existing normal course issuer bid.”
This news release should be read in conjunction
with Trevali’s audited annual consolidated financial statements and
management's discussion and analysis for the year ended December
31, 2018, which is available on Trevali's website and on SEDAR.
Certain financial information is reported herein using non-IFRS
measures. See Non-IFRS Financial Performance Measures below and in
Trevali’s accompanying 2018 Management’s Discussion and
Analysis.
2018 Annual and Q4 Financial Results and
Conference CallThe Company will host a conference call and
results presentation webcast at 10:30AM Eastern Time on Thursday,
February 21, 2019 to review the 2018 operating and financial
results. Participants are advised to dial in 5 minutes prior to the
scheduled start time of the call.
Conference call dial-in details:Date: Thursday,
February 21, 2019 at 10:30AM Eastern TimeToll-free (North America):
877-291-4570International: 647-788-4919Webcast:
http://www.gowebcasting.com/9866
Consolidated Financial
Results
($ millions, except per-share amounts) |
Q4-2018 |
Q4-2017 |
2018 |
2017 |
Revenues |
$123.4 |
$188.8 |
$402.6 |
$330.5 |
Income from mining operations |
$29.2 |
$37.9 |
$77.7 |
$86.1 |
EBITDA (1) |
($271.5) |
$56.3 |
($176.6) |
$101 |
Adjusted EBITDA (1) |
$41.1 |
$56.0 |
$137.0 |
$119.0 |
Net income (loss) |
($251.8) |
$25.2 |
($230.6) |
$20.2 |
Basic Income (loss) per share ($/share) |
($0.29) |
$0.03 |
($0.27) |
$0.03 |
Adjusted Earnings per share (1) ($/share) |
$0.01 |
$0.03 |
$0.04 |
$0.07 |
Cash flow from operations |
$38,939 |
$63,977 |
$116.0 |
$114.8 |
Cash and equivalents |
$65.5 |
$94.1 |
$65.5 |
$94.1 |
Net debt (1) |
$67.0 |
$66.4 |
$67.0 |
$66.4 |
2018 Q4 and Annual Consolidated
Production Statistics and 2017 Comparison
|
Q4-2018 |
Q4-2017 |
2018 |
2017 |
Tonnes Mined |
723,384 |
832,878 |
2,973,669 |
2,128,018 |
Tonnes Milled |
737,496 |
818,690 |
3,054,768 |
2,250,464 |
Payable Production: |
|
|
|
|
Zinc (Mlbs)Zinc (tonnes) |
102.746,600 |
104.847,500 |
406.9184,600 |
225.1102,100 |
Lead (Mlbs)Lead (tonnes) |
9.74,400 |
13.56,100 |
41.718,900 |
45.820,800 |
Silver (Mozs) |
0.3 |
0.4 |
1.3 |
1.6 |
Operating Cost per tonne (1) ($/tonne) |
$77 |
$68 |
$68 |
$57 |
C1 Cash Costs per pound (1) ($/lbs) |
$0.91 |
$0.81 |
$0.77 |
$0.69 |
All-In Sustaining Cost per pound (1) ($/lbs) |
$1.25 |
$0.98 |
$0.96 |
$0.88 |
Consolidated Sales Statistics and 2017
Comparison
|
Q4-2018 |
Q4-2017 |
2018 |
2017 |
Zinc Concentrate (dry metric tonnes) |
141,550 |
151,173 |
448,402 |
271,043 |
Lead Concentrate (dry metric tonnes) |
14,344 |
20,701 |
49,792 |
59,518 |
Zinc (Mlbs)Zinc (tonnes) |
124.156,300 |
139.263,200 |
403.3183,000 |
244.3110,800 |
Lead (Mlbs)Lead (tonnes) |
10.74,900 |
19.08,600 |
39.918,100 |
50.623,000 |
Silver (Mozs) |
0.3 |
0.5 |
1.2 |
1.6 |
Revenues, net (millions) (2) |
$123.4 |
$188.8 |
$402.6 |
$330.5 |
(1) Refer to the “Non-IFRS Financial Performance Measures”
section of this press release.
(2) Revenues include provisional price adjustment and is
calculated on a 100% basis. Fourth quarter 2018 revenues include a
positive settlement adjustment of $1.6 million on sales from prior
quarters.
Perkoa Mine, Burkina Faso:Q4
production was 47.6 million pounds (21,600 tonnes) of payable zinc.
Metal sales for the quarter was 52.7 million pounds (23,900 tonnes)
of payable zinc for net revenue of $48.1 million and resulted in
Adjusted EBITDA1 of $11.7 million for the three months, prior to
impairment and other non-cash charges that resulted in EBITDA1 of
($11.4 million).
Total ore milled in the fourth quarter of 2018
was slightly higher to the same period of the previous year. The
decrease of mine site operating cost is consistent with the lower
production volume in addition to the sale of a backlog of inventory
at the end of 2017. 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 unit
operating costs.
The Company approved the procurement of a more
efficient site power generating station in the first quarter of
2018. This project entails the installation of two 2.5MW heavy fuel
oil generators for an estimated capital cost of $9.2 million and is
expected to reduce the mine’s operating cost by approximately $5
per tonne milled. The power generating station is expected to be
commissioned in early 2019.
Perkoa Production Results
|
Q4-2018 |
Q4-2017 |
2018 |
2017(3) |
Tonnes mined |
161,815 |
203,635 |
708,263 |
270,909 |
Tonnes milled |
185,662 |
180,022 |
724,995 |
237,832 |
Payable production: |
|
|
|
|
Zinc (Mlbs)Zinc (tonnes) |
47.621,600 |
47.721,600 |
184.083,500 |
62.828,500 |
Operating Cost per tonne (1) ($/tonne) |
$118 |
$121 |
$105 |
$114 |
C1 Cash Cost per pound (1) ($/lbs) |
$0.88 |
$1.09 |
$0.80 |
$0.91 |
All-In Sustaining Cost per pound (1) ($/lbs) |
$1.13 |
$1.13 |
$0.91 |
$1.02 |
Perkoa Sales Results
|
Q4-2018 |
Q4-2017 |
2018 |
2017(3) |
Zinc concentrate (dry metric tonnes) |
57,769 |
84,824 |
194,770 |
84,824 |
Payable sales: |
|
|
|
|
Zinc (Mlbs)Zinc (tonnes) |
52.723,900 |
80.736,600 |
182.582,800 |
80.736,600 |
Revenues, net (millions) (2) |
$48.1 |
$94.3 |
$162.5 |
$94.3 |
(1) Refer to the “Non-IFRS Financial Performance Measures”
section of this press release.
(2) Revenues include effects of settlement adjustments on sales
from prior quarters and is calculated on a 100% basis.
(3) The Perkoa Mine was acquired August 31, 2017. The 2017
comparatives include only the period of September to December 2017
result.
Rosh Pinah Mine, Namibia:Q4
production was 25.4 million pounds (11,500 tonnes) of payable zinc
and 1.5 million pounds (680 tonnes) of payable lead. Metal
sales for the quarter were 39.1 million pounds (17,700 tonnes) of
payable zinc and 3.3 million pounds (1,500 tonnes) of payable lead
for $36.9 million in net revenue to deliver Adjusted EBITDA1 of
$17.7 million for the three months, prior to impairment and other
non-cash charges that resulted in EBITDA1 of ($64.5 million).
Zinc production was higher year-over-year as
higher grades and recoveries offset lower mine output and mill
throughput, as harder ore and head grades from the new Western Ore
Field necessitated a reduction to milling rates. The increased
operating cost per tonne1 is a direct result of lower milled tonnes
due to higher feed grades from the mine.
Business improvement programs have been
implemented to target key operational areas including production
drilling support, introduction of raise-boring to improve the stope
production cycle, improved ore blending strategies and mobile fleet
optimization. The mine site is also implementing improved
operational activity-based planning processes and compliance
monitoring. The Rosh Pinah 2.0 optimization study remains on-going
and is anticipated to be complete in the second half of 2019.
Rosh Pinah Production
Results
|
Q4-2018 |
Q4-2017 |
2018 |
2017(3) |
Tonnes mined |
158,354 |
177,820 |
627,295 |
237,865 |
Tonnes milled |
149,201 |
171,020 |
641,980 |
227,650 |
Payable production: |
|
|
|
|
Zinc (Mlbs)Zinc (tonnes)Lead (Mlbs)Lead (tonnes)Silver (Mozs) |
25.411,5001.56800.0 |
21.39,7003.11,4000.0 |
94.242,7008.53,9000.1 |
29.313,3004.42,0000.1 |
Operating Cost per tonne (1) ($/tonne) |
$71 |
$58 |
$59 |
$56 |
C1 Cash Cost per pound (1) ($/lbs) |
$0.91 |
$0.40 |
$0.70 |
$0.47 |
All-In Sustaining Cost per pound (1) ($/lbs) |
$1.11 |
$0.82 |
$0.90 |
$0.85 |
Rosh Pinah Sales Results
|
Q4-2018 |
Q4-2017 |
2018 |
2017(3) |
Zinc concentrate (dry metric tonnes) |
45,528 |
21,656 |
103,313 |
31,379 |
Lead concentrate (dry metric tonnes) |
5,891 |
8,265 |
11,279 |
8,265 |
Payable sales: |
|
|
|
|
Zinc (Mlbs)Zinc (tonnes)Lead (Mlbs)Lead (tonnes)Silver (Mozs) |
39.117,7003.31,5000.0 |
20.79,4008.63,9000.1 |
91.441,5007.73,5000.1 |
29.713,5008.63,9000.1 |
Revenues, net (millions) (2) |
$36.9 |
$37.4 |
$92.0 |
$45.6 |
(1) Refer to the “Non-IFRS Financial Performance Measures”
section of this press release.
(2) Revenues include effects of settlement adjustments on sales
from prior quarters and is calculated on a 100% basis.
(3) The Rosh Pinah Mine was acquired August 31, 2017. The 2017
comparatives include only the period of September to December 2017
result.
Caribou Mine, Canada:Q4 production was 13.7
million pounds (6,200 tonnes) of payable zinc, 5.5 million pounds
(2,500 tonnes) of payable lead and 0.1 million ounces of payable
silver. Metal sales for the quarter were 15.0 million pounds (6,800
tonnes) of zinc, 4.6 million pounds (2,100 tonnes) of lead and 0.1
million ounces of silver for $17.7 million in net revenue to
deliver Adjusted EBITDA1 of $2.6 million for the three months,
prior to impairment and other non-cash charges that resulted in
EBITDA1 of ($65.4 million).
Mine production for the quarter was 184,635
tonnes and mill throughput was 174,180 tonnes. The mine has
experienced challenging hanging wall rock mass conditions leading
to changes to geotechnical control management, primarily requiring
the move to cemented rock fill from unconsolidated fill. As
previously reported on October 22, 2018, adverse conditions were
experienced in two mining zones resulting in the cessation of
retreat mining and the subsequent loss of production (approaching
50,000 tonnes) from the remaining 2018 mine plan. This situation
also led to a higher operating cost per tonne1 in the current
quarter compared to the same quarter in the previous year.
Further external engineering studies are ongoing
and in order to increase mining flexibility, Caribou management
strategically slowed the mining rate in order to accelerate mine
development in the fourth quarter 2018 through to the first quarter
2019 to build more optionality and stability in the mine to deliver
safe, strong and reliable results in 2019. As part of the ongoing
engineering studies, alternative mining methods are being evaluated
with the objective of reducing costs to improve the mines
productivity.
Caribou Production Results
|
Q4-2018 |
Q4-2017 |
2018 |
2017 |
Tonnes mined |
184,635 |
250,225 |
887,141 |
937,459 |
Tonnes milled |
174,180 |
252,857 |
884,529 |
945,436 |
Payable production: |
|
|
|
|
Zinc (Mlbs)Zinc (tonnes)Lead (Mlbs)Lead (tonnes)Silver (Mozs) |
13.76,2005.52,5000.1 |
21.79,8008.73,9000.2 |
72.032,70025.311,5000.7 |
79.936,30030.914,0000.9 |
Operating Cost per tonne (1) ($/tonne) |
$90 |
$55 |
$68 |
$59 |
C1 Cash Cost per pound (1) ($/lbs) |
$1.28 |
$0.55 |
$0.85 |
$0.62 |
All-In Sustaining Cost per pound (1) ($/lbs) |
$1.93 |
$0.66 |
$1.14 |
$0.72 |
Caribou Sales Results
|
Q4-2018 |
Q4-2017 |
2018 |
2017 |
Zinc concentrate (dry metric tonnes) |
18,637 |
28,408 |
85,554 |
94,240 |
Lead concentrate (dry metric tonnes) |
5,831 |
10,699 |
30,948 |
40,402 |
Payable sales: |
|
|
|
|
Zinc (Mlbs)Zinc (tonnes)Lead (Mlbs)Lead (tonnes)Silver (Mozs) |
15.06,8004.62,1000.1 |
23.910,8008.73,9000.3 |
72.933,10024.411,1000.7 |
81.737,10031.514,3000.9 |
Revenues, net (millions) (2) |
$17.7 |
$37.0 |
$82.9 |
$118.4 |
(1) Refer to the “Non-IFRS Financial Performance Measures”
section of this press release.
(2) Revenues include effects of settlement adjustments on sales
from prior quarters.
Santander Mine, Peru:Q4 production was 16
million pounds (7,300 tonnes) of payable zinc, 2.7 million pounds
(1,200 tonnes) of payable lead and 0.2 million ounces of payable
silver. Metal sales for the fourth quarter were 17.3 million pounds
(7,800 tonnes) of payable zinc, 2.8 million pounds (1,300 tonnes)
of payable lead and 0.2 million ounces of payable silver for $20.6
million in net revenue to deliver Adjusted EBITDA1 of $11.6 million
for the three months, prior to Impairment and other non-cash
charges that resulted in EBITDA1 of ($77.0 million).
Mine production for the fourth quarter was
218,580 tonnes and mill throughput was 228,454 tonnes. Santander
transitioned to fully owner operated in the quarter, recovered from
third quarter production disruptions and managed to meet its
forecasted annual production target delivering a 2018 monthly zinc
production record for the mine in December. The mine is well
positioned for production in 2019 with all development in place for
the year.
Santander Production Results
|
Q4-2018 |
Q4-2017 |
2018 |
2017 |
Tonnes mined |
218,580 |
201,198 |
750,970 |
681,785 |
Tonnes milled |
228,454 |
214,791 |
803,265 |
839,546 |
Payable production: |
|
|
|
|
Zinc (Mlbs)Zinc (tonnes)Lead (Mlbs)Lead (tonnes)Silver (Mozs) |
16.07,3002.71,2000.2 |
14.16,4001.78000.1 |
56.825,8007.93,6000.5 |
53.124,10010.54,8000.6 |
Operating Cost per tonne (1) ($/tonne) |
$33 |
$47 |
$43 |
$40 |
C1 Cash Cost per pound (1) ($/lbs) |
$0.59 |
$0.88 |
$0.72 |
$0.67 |
All-In Sustaining Cost per pound (1) ($/lbs) |
$0.63 |
$1.22 |
$0.99 |
$0.95 |
Santander Sales Results
|
Q4-2018 |
Q4-2017 |
2018 |
2017 |
Zinc concentrate (dry metric tonnes) |
19,616 |
16,285 |
64,764 |
60,600 |
Lead concentrate (dry metric tonnes) |
2,621 |
1,738 |
7,564 |
10,851 |
Payable sales: |
|
|
|
|
Zinc (Mlbs)Zinc (tonnes)Lead (Mlbs)Lead (tonnes)Silver (Mozs) |
17.37,8002.81,3000.2 |
14.06,4001.78000.1 |
56.525,6007.83,5000.5 |
52.223,70010.64,8000.6 |
Revenues, net (millions) (2) |
$20.6 |
$20.1 |
$65.2 |
$72.1 |
(1) Refer to the “Non-IFRS Financial Performance Measures”
section of this press release.
(2) Revenues include effects of settlement adjustments on sales
from prior quarters.
2019 CONSOLIDATED PRODUCTION GUIDANCE
Production, operating cost and capital
expenditure guidance remains unchanged from that reported on
January 17, 2019. 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.
2019 Consolidated Production Guidance
(1&2)
Mine |
2019 Zinc Production |
2019 Lead Production |
2019 Silver Production |
Perkoa (100%) (2) |
151 – 168 Mlbs68 – 76 ktonnes |
N/A |
N/A |
Rosh Pinah (100%) (2) |
80 – 89 Mlbs36 – 40 ktonnes |
10 – 11 Mlbs4 – 5 ktonnes |
145 – 161 k ozs |
Caribou |
71 – 79 Mlbs32 – 36 ktonnes |
24 – 27 Mlbs11 – 12 ktonnes |
641 – 713 k ozs |
Santander |
59 – 65 Mlbs27 – 29 ktonnes |
10 – 11 Mlbs4 – 5 ktonnes |
536 – 595 k ozs |
Total |
361 – 401 Mlbs163 – 181
ktonnes |
44 – 49 Mlbs19 – 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 C1 Cash Costs of between $0.81
– $0.88 per pound of zinc. Including capital expenditures forecast
of $74 million, consolidated AISC are expected to range from $0.99
– $1.09 per pound of zinc (for the purpose of AISC guidance, all
capital is considered to be sustaining). Relative to 2018, higher
capital expenditures at Rosh Pinah and Santander are planned, with
incremental spending on process plant upgrades (new filter press
and floatation and grinding circuit improvements) and power
infrastructure, respectively, the main drivers.
2019 Consolidated Operating Cost and
Capital Expenditure Guidance (1&2)
Mine |
Operating Cost (per tonne) |
C1 Cash Cost($/lb Zn) |
All-in Sustaining Cost ($/lb Zn) |
Capital Expenditures ($M) |
Perkoa (100%)(2) |
106 – 117 |
0.84 – 0.92 |
0.91 – 0.99 |
11 |
Rosh Pinah (100%)(2) |
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 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 operating 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; and
- Lower planned throughput due to planned maintenance.
Exploration – Targeting Resource and
Reserve Growth and Mine Life Extensions
Exploration activities continued to focus on
extending mineralized zones at depth at all operations. Specific
highlights in 2018 include the emerging Santander Pipe deposit,
which will remain a focus for 2019, extensions to the Perkoa
deposit where the Hanging Wall zone was extended approximately 300
metres below the deepest level of the mine and material extensions
along strike and at depth to the Western Ore field deposit at Rosh
Pinah. Finally, regional exploration drilling commenced at Perkoa
in Q4 of 2018 and has successfully intersected sulphide bearing
(stringer – disseminated to narrow massive zones – non-economic to
date) volcanogenic massive sulphide 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, and Daniel Marinov, P.Geo, Trevali’s
Vice President - Exploration, 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.
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
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”), Adjusted EBITDA,
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.
Adjusted EBITDA and Adjusted Earnings per
ShareAdjusted EBITDA consists of EBITDA less the impact of
impairments or reversals of impairment and other non-cash expenses
or recoveries. The non-cash expenses and recoveries are removed
from the calculation of EBITDA as the Company does not believe they
are reflective of the Company's ability to generate liquidity and
its core operating results. Adjusted Earnings per Share consist of
net income or loss in the period less the impact of impairments or
reversals of impairment, gain (loss) on foreign exchange, business
acquisition cost and other income or expenses.
Operating cost per tonne milled:Cash operating
cost per tonne milled measures the mine site 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. 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 year
ended December 31, 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 Company’s
growth strategies, the leadership transition, expected annual
savings from capital projects, demand for commodities, reduced
interest payments, anticipated effects of commodity prices on 2019
revenues, expectations of positive operating cash flow and
sufficient resources, estimation of mineral reserves and mineral
resources, the realization of mineral reserve estimates, the timing
and amount of estimated future production, costs of production,
capital expenditures, success of mining operations, environmental
risks, unanticipated reclamation expenses, title disputes or
claims, future anticipated property acquisitions, the content,
cost, timing and results of future anticipated exploration
programs, life of mine expectancies and limitations on insurance
coverage.
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
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