Trevali Mining Corporation (“Trevali” or the “Company”)
(TSX: TV, BVL: TV; OTCQX: TREVF, Frankfurt: 4TI) today
released financial and operating results for the three and nine
months ended September 30, 2019. A strong focus on operational
improvements delivered a second consecutive record of quarterly
zinc production at 106.8 million pounds and further cash cost and
all-in-sustaining cost reductions over the prior quarter, firmly
positioning Trevali to meet, or potentially exceed 2019 production
targets. All financial figures are in U.S. dollars.
FINANCIAL AND OPERATIONAL HIGHLIGHTS FOR THE THIRD
QUARTER(Compared to second quarter 2019, unless otherwise
noted)
- Excellent safety
performance with a 71% reduction in Total Recordable Injury
Frequency year to date compared to the same period of the
prior year.
- T90 business improvement
program officially launched. Targeting $50 million of
annual sustainable efficiencies and reduction in AISC1 to $0.90/lb
by the beginning of 2022. $30 million has been identified as of
September 30, 2019.
- Second consecutive quarter
of record zinc production with 106.8 million payable pounds at a C1
Cash Cost1 of $0.84/lb and an
AISC1 of $0.96/lb and all
operations performing well.
- 2019 annual production and
cost guidance confirmed. Potential for annual production
to exceed the top end of the range and AISC1 trending to the middle
of the range despite higher smelting and refining charges announced
earlier this year as part of the annual benchmark update.
- Rosh Pinah RP2.0
feasibility study on track with initial investment decision by the
end of Q1 2020. Trade-off studies narrowing down on
optimized configuration for mining, processing and infrastructure.
Engaged AMC Consultants, Knight Piesold, and DRA Global on the
study.
- Exploration spend increased
on positive results year to date from a minimum of
$8.4 million to $11.7 million, with $7.6 million spent and
28,000 metres drilled year to date. Drilling of 18,000 metres
planned for Q4 2019 to identify new mineral resources within
trucking distance of existing operations.
- Adjusted EBITDA1 of $22.5
million during Q3 2019 underpinned by sales volumes of
111.1 million pounds of zinc payable and reduction of 7.6
million pounds of inventory.
- Robust Q3 2019 and year to
date cash flow with operating cash flows before working
capital changes of $8.8 million and $43.9 million,
respectively.
Ricus Grimbeek, Trevali’s President and CEO
commented, “Production is up and costs are down quarter over
quarter. We had our second consecutive record of quarterly zinc
production and we are moving our operations down the cost curve. We
are in a great position to reconfirm our annual guidance with
potential to exceed on production. More importantly we have line of
sight over the long term which is going to be transformative for
Trevali.
A major part of that is our newly launched T90
program which targets $50 million in pre-tax annual sustainable
efficiencies and reduces our AISC1 down to $0.90 per pound by the
beginning of 2022. We will accomplish this through operational
improvements, standardization, and the deployment of technology.
This plan will give us the platform to scale and additional
improvements beyond T90 are undoubtedly in front of us as it opens
the door to the reduction in cut off grades and extended mine lives
at our operations. I’d also like to thank all our employees and
contractors for an excellent quarter.”
This news release should be read in conjunction
with Trevali’s quarterly consolidated financial statements and
management’s discussion and analysis for the three months ended
September 30, 2019, 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 Q3-2019 Management’s Discussion
and Analysis.
1 See “Use of Non-IFRS Financial Performance
Measures”.(in United States dollars, tabular amounts in thousands
except where noted)
Q3 2019 Results Conference
Call
The Company will host a conference call and
presentation webcast at 01:00PM Eastern Time on Wednesday, November
6, 2019 to review the operating and financial results. Participants
are advised to dial in five minutes prior to the scheduled start
time of the call. A presentation will be made available on the
Company’s website prior to the conference call.
Conference call dial-in details:Date: Wednesday,
November 6, 2019 at 01:00PM Eastern TimeToll-free (North America):
1 (877) 291-4570International: +1 (647) 788-4919Webcast:
http://www.gowebcasting.com/10255
|
|
YTD Q3’19 |
YTD Q3’18 |
YoY |
Q3’19 |
Q2’19 |
Q3’18 |
Q3'19 vs Q2'19 |
Q3'19 vs Q3'18 |
Zinc payable production |
Mlbs |
312.6 |
|
304.2 |
3 |
% |
106.8 |
|
105.2 |
|
101.6 |
|
2 |
% |
5 |
% |
Lead payable production |
Mlbs |
36.5 |
|
32.0 |
14 |
% |
13.6 |
|
11.4 |
|
9.2 |
|
19 |
% |
48 |
% |
Silver
payable production |
Moz |
1.1 |
|
1.0 |
10 |
% |
0.4 |
|
0.3 |
|
0.3 |
|
33 |
% |
33 |
% |
Revenue |
$ |
294,644 |
|
342,584 |
-14 |
% |
87,135 |
|
82,297 |
|
73,095 |
|
6 |
% |
19 |
% |
Adjusted EBITDA1 |
$ |
86,500 |
|
159,381 |
-46 |
% |
22,487 |
|
17,558 |
|
21,249 |
|
28 |
% |
6 |
% |
Net (loss) income |
$ |
(31,578 |
) |
21,184 |
-249 |
% |
(16,131 |
) |
(31,563 |
) |
(30,846 |
) |
-49 |
% |
-48 |
% |
Net
(loss) income per share |
$ |
(0.04 |
) |
0.02 |
-300 |
% |
(0.02 |
) |
(0.04 |
) |
(0.04 |
) |
-50 |
% |
-50 |
% |
C1 Cash Cost1 |
$/lb |
0.88 |
|
0.73 |
21 |
% |
0.84 |
|
0.86 |
|
0.72 |
|
-2 |
% |
17 |
% |
AISC1 |
$/lb |
1.01 |
|
0.88 |
15 |
% |
0.96 |
|
1.00 |
|
0.87 |
|
-4 |
% |
10 |
% |
Sustaining capital expenditure1 |
$ |
36,253 |
|
40,440 |
-18 |
% |
11,975 |
|
13,796 |
|
14,751 |
|
-13 |
% |
-19 |
% |
Exploration expenditure |
$ |
7,607 |
|
4,885 |
56 |
% |
2,576 |
|
2,547 |
|
1,739 |
|
1 |
% |
48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or
lbs.
Revenue amounts in the table above, including previous and
comparative year-to-date and quarter amounts have been restated to
reflect the change in accounting policy set out in Note 3 of the
condensed interim consolidated financial statements for the three
and nine months ended September 30, 2019.
T90 PROGRAM
T90 is a newly-launched transformative
improvement program which will ensure that we move our operations
down the cost curve. We are targeting $50 million in pre-tax annual
sustainable efficiencies which will be achieved over the next two
years culminating in a reduction to consolidated AISC1 to $0.90/lb
by the beginning of 2022. T90 captures a number of projects,
programs, and initiatives but largely consists of improvement
opportunities unique to each operating site, deployment of
standardization and best practices to ensure “one company runs four
orebodies,” deploying technology to improve productivity as well as
decision making, and the Rosh Pinah RP2.0 expansion project (“RP
2.0”).
T90 business improvement program officially
launched
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/0ce28557-dd04-4df2-af2e-1193eefb072c
Investments will be required as part of T90.
Material investments identified to date include RP2.0 and the
digitalization program.
During Q3 2019, $30 million of efficiencies were
identified and are at various stages of implementation.
Financial and Operational
Summary
The following table sets forth selected
consolidated financial and operating information for each of our
eight most recently completed quarters:
|
Q3’19 |
|
Q2’19 |
Q1’19 |
Q4’18 |
Q3’18 |
Q2’18 |
Q1’18 |
Q4’17 |
Revenues |
87,135 |
|
82,297 |
|
125,212 |
121,764 |
|
73,095 |
|
151,593 |
117,895 |
282,272 |
Zinc sales
(Mlbs) |
111 |
|
93 |
|
125 |
124 |
|
76 |
|
114 |
89 |
139 |
EBITDA1 |
12,945 |
|
(7,443 |
) |
46,674 |
(271,499 |
) |
(22,401 |
) |
58,785 |
58,546 |
56,275 |
Adjusted
EBITDA1 |
22,487 |
|
17,558 |
|
46,455 |
39,416 |
|
21,249 |
|
83,039 |
52,427 |
51,787 |
Net (loss)
income |
(16,131 |
) |
(31,563 |
) |
16,116 |
(251,778 |
) |
(30,846 |
) |
23,454 |
28,575 |
25,174 |
Net (loss)
income per share – basic and diluted |
(0.02 |
) |
(0.04 |
) |
0.02 |
(0.29 |
) |
(0.04 |
) |
0.03 |
0.03 |
0.03 |
Adjusted (loss) income per share1 |
(0.02 |
) |
(0.03 |
) |
0.03 |
0.01 |
|
(0.04 |
) |
0.04 |
0.02 |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue amounts in the table above, and comparative quarter
amounts, have been restated to reflect the Company’s change in
accounting policy.
Revenues increased by 6% from Q2 2019 despite
the 15% decrease in quarterly London Metal Exchange (“LME”) average
zinc prices owing to a 19% increase in quarterly zinc payable
sales. After declining significantly during May and June 2019, the
spot price of zinc was range bound between $1.00 and $1.11 per
pound during Q3 2019. The $0.08 per pound decline in the average
3-month future price of zinc from June to September, combined with
the timing of sales year-to-date, resulted in a Q3 2019 settlement
mark-to-market of ($10.9) million. Refer to the settlement
mark-to-market summary on page 6.
Agreement of the 2019 zinc concentrate smelting
and refining benchmark terms during the quarter have not had any
impact on results as the expected outcome was accrued.
Net loss in Q3 2019 was $16.1 million or ($0.02)
per share, compared to net loss of $30.8 million or ($0.04) per
share, over the same period a year ago. The decrease in loss per
share in Q3 2019 can be attributed to increased revenues from
higher sales volumes, in addition to significantly lower negative
settlement mark-to-market as the average 3-month future price of
zinc declined by $0.29 per pound from June to September of 2018,
compared to the decrease of only $0.08 per pound during the same
period in 2019. Concentrate inventories built-up at Rosh Pinah
during Q2 2019 due to elevated moisture levels and at Perkoa due to
port congestion was reduced in-line with expectations. Additional
improvements to shorten the working capital cycle are still
targeted. A new zinc concentrate filter press at Rosh Pinah
continues to be on track for installation by the end of 2019 and is
expected to reduce the volatility of concentrate sales volumes.
The Company’s mining activities are conducted
throughout the year, and there are no notable variations due to
seasonality. The Company saw a step up in all metrics in Q4 2017,
which was the first full quarter of operations following the
acquisition of the Rosh Pinah and Perkoa mines.
EBITDA1 was higher and net loss reduced for Q3
2019 compared to the corresponding quarter from 2018 despite higher
smelting and refining charges and overall lower zinc prices as the
negative zinc settlement mark-to-market during Q3 2019 amounted to
$11 million compared to a negative zinc settlement mark-to-market
of $40.3 million during the same period in 2018.
|
|
YTD Q3’19 |
YTD Q3’18 |
YoY |
|
Q3’19 |
Q2’19 |
Q3’18 |
Q3'19 vs Q2'19 |
Q3'19 vs Q3'18 |
Production |
|
|
|
|
|
|
|
|
|
|
Ore mined |
t |
2,359,496 |
|
2,250,284 |
|
5 |
% |
|
824,935 |
|
762,189 |
|
652,904 |
|
8 |
% |
26 |
% |
Ore
milled |
t |
2,412,079 |
|
2,317,271 |
|
4 |
% |
|
838,543 |
|
803,969 |
|
753,123 |
|
4 |
% |
11 |
% |
Zinc head grade |
|
8.1 |
% |
8.2 |
% |
-1 |
% |
|
7.9 |
% |
8.2 |
% |
8.4 |
% |
-4 |
% |
-6 |
% |
Lead head grade |
|
1.4 |
% |
1.4 |
% |
0 |
% |
|
1.5 |
% |
1.4 |
% |
1.3 |
% |
7 |
% |
15 |
% |
Silver
head grade |
(ozs/t) |
1.4 |
|
1.2 |
|
17 |
% |
|
1.3 |
|
1.3 |
|
1.3 |
|
0 |
% |
0 |
% |
Zinc recovery |
|
86.8 |
% |
87.0 |
% |
0 |
% |
|
87.1 |
% |
86.5 |
% |
87.0 |
% |
1 |
% |
0 |
% |
Lead recovery |
|
66.4 |
% |
63.0 |
% |
5 |
% |
|
69.6 |
% |
64.2 |
% |
59.0 |
% |
8 |
% |
18 |
% |
Silver
recovery |
|
45.8 |
% |
42.0 |
% |
9 |
% |
|
45.9 |
% |
45.2 |
% |
40.0 |
% |
2 |
% |
15 |
% |
Zinc payable |
Mlbs |
312.6 |
|
304.2 |
|
3 |
% |
|
106.8 |
|
105.2 |
|
101.6 |
|
2 |
% |
5 |
% |
Lead payable |
Mlbs |
36.5 |
|
32.0 |
|
14 |
% |
|
13.6 |
|
11.4 |
|
9.2 |
|
19 |
% |
48 |
% |
Silver
payable |
Moz |
1.1 |
|
1.0 |
|
10 |
% |
|
0.4 |
|
0.3 |
|
0.3 |
|
33 |
% |
33 |
% |
Sales |
|
|
|
|
|
|
|
|
|
|
Zinc payable |
Mlbs |
329.6 |
|
279.2 |
|
18 |
% |
|
111.1 |
|
93.2 |
|
75.5 |
|
19 |
% |
47 |
% |
Lead payable |
Mlbs |
32.8 |
|
29.2 |
|
12 |
% |
|
10.6 |
|
12.1 |
|
8.1 |
|
-12 |
% |
31 |
% |
Silver
payable |
Moz |
1.1 |
|
0.9 |
|
22 |
% |
|
0.3 |
|
0.4 |
|
0.3 |
|
-25 |
% |
0 |
% |
Cost per
unit |
|
|
|
|
|
|
|
|
|
|
C1 Cash Cost1 |
$/lb |
0.88 |
|
0.73 |
|
21 |
% |
|
0.84 |
|
0.86 |
|
0.72 |
|
-2 |
% |
17 |
% |
AISC1 |
$/lb |
1.01 |
|
0.88 |
|
15 |
% |
|
0.96 |
|
1.00 |
|
0.87 |
|
-4 |
% |
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly zinc payable production increased by
2% to 106.8 million pounds, marking the second consecutive record
production quarter for Trevali and a 5% increase from the
comparative quarter in 2018. Ore tonnes milled at Caribou, Rosh
Pinah and Perkoa improved sequentially, with overall lower grades
as planned because of lower grade material being milled at Rosh
Pinah, partially offset by improved grades at Perkoa and Santander,
attributed to continued enhancements in dilution control and access
to higher grade areas recently developed in accordance with the
mine plan, respectively.
Zinc payable sales in Q3 2019 were 111.1 million
pounds, a 19% increase from Q2 2019 and 47% above Q3 2018 due to a
quarterly production record at Perkoa and reversal of the higher
moisture content related concentrate build-up that occurred at Rosh
Pinah. The increased sales volume, releasing 8.4 million
pounds of zinc payable valued at $8.8 million, using September 30,
2019 spot price, offset partially by a further reduction in the
price of zinc during the quarter, positively impacted revenues in
the quarter. Cost per unit during the quarter reduced compared to
Q2 2019 despite higher sales volumes because of increased
production volumes that reduce the per unit cost which are
calculated on a payable production basis, overall lower costs as
cost efficiencies are realized and a price-related increase in
by-product revenues. YTD costs are positively impacted by the
decreasing cost trend and increased production. YTD costs in the
prior year are lower as they benefited from lower zinc concentrate
smelting and refining rates and the release of provisions.
A reconciliation of Adjusted EBITDA1 from Q2 2019 to Q3 2019 is
provided in Figure A. The $4.9 million increase in Adjusted
EBITDA1 is the net result of increased sales volumes, at a lower
average zinc price per pound during the quarter, as well as
improved costs.
Figure A: Adjusted EBITDA1
reconciliation Q2’19 vs Q3’19 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a2914636-0e28-4ab9-8271-26da39f15365
The increase in Q3 2019 and Q2 2019 C1 Cash
Cost1 from Q3 2018 mainly resulted from the increase of industry
benchmark zinc concentrate smelting and refining charges from $147
per tonne in 2018 to $245 per tonne in 2019 (equates to an increase
of approximately $0.10 per pound). Relative to Q2 2019, the
improvement in C1 Cash Cost1 reflects higher production volumes,
reduced costs due to the continuous focus on operating efficiency
as well as increased by-product revenue attributed primarily to
higher silver prices since Q2 2019. AISC1 in Q3 2019 was $0.96 per
pound, a $0.04 per pound reduction from the prior quarter for the
same reasons that benefited C1 Cash Cost1 in addition to lower
sustaining capital expenditures.
Expansionary capital during Q3 2019 related
primarily to the filtration and grinding upgrade project at Rosh
Pinah.
OUTLOOK
Commodity Markets
Despite economic headwinds in recent months
weighing on global zinc demand, which is forecast by Wood Mackenzie
to contract by 1% in 2019, we believe the fundamental outlook for
the zinc market is supportive of higher prices. Refined zinc
inventories are at historically low levels and supply continues to
be constrained as smelter production in the first three quarters of
2019 has been well below market expectations at the start of the
year, which called for annual growth of over 6%. Zinc smelters
globally continue to underperform due to the ongoing impact of
production cutbacks in the face of the environmental regulations at
Chinese smelters and several production issues at smelters in the
rest of the world. Most recently the temporary suspension of
operations at Teck’s Trail facility due to equipment failure and
the temporary suspension of operations at Vedanta’s Skorpion
smelter in Namibia. As a result, 2019 global refined supply growth
is now forecast by Wood Mackenzie at just 2.5%. Should the latest
smelter production growth rates materialize, the remainder of 2019
and beyond is still forecast to see another deficit in the refined
zinc market. Additionally, the current zinc price volatility and
weakness may limit supply growth from marginal and restarting
operations, helping to remove additional supply. Consequently,
exchange inventories of zinc are forecast to remain at depressed
levels for the remainder of the year, providing fundamental support
to the zinc price.
OPERATIONS REVIEW
Consolidated Revenues
In addition to our operating results, financial
performance is directly affected by several factors, including
metals prices, foreign exchange rates and input costs, including
energy prices. The average LME metal prices are included below, the
Q3 2019 average zinc price decreased 15% compared to the previous
quarter; however, the price has been improving since August
2019.
|
|
YTD Q3’19 |
YTD Q3’18 |
YoY |
|
Q3’19 |
Q2’19 |
Q3’18 |
Q3'19 vs Q2'19 |
Q3'19 vs Q3'18 |
Revenues |
|
|
|
|
|
|
|
|
|
|
Zinc revenue |
$ |
379,754 |
|
380,583 |
|
0 |
% |
|
116,771 |
|
108,233 |
|
84,997 |
|
8 |
% |
37 |
% |
Lead and silver revenue |
|
49,061 |
|
47,600 |
|
3 |
% |
|
17,198 |
|
16,221 |
|
12,471 |
|
6 |
% |
38 |
% |
Smelting and refining costs |
|
(134,171 |
) |
(85,599 |
) |
57 |
% |
|
(46,834 |
) |
(42,157 |
) |
(24,373 |
) |
11 |
% |
92 |
% |
Net
revenue |
$ |
294,644 |
|
342,584 |
|
-14 |
% |
|
87,135 |
|
82,297 |
|
73,095 |
|
6 |
% |
19 |
% |
Average zinc LME price |
$/lb |
1.18 |
|
1.37 |
|
-14 |
% |
|
1.06 |
|
1.25 |
|
1.15 |
|
-15 |
% |
-8 |
% |
Average lead LME price |
$/lb |
0.90 |
|
1.06 |
|
-15 |
% |
|
0.92 |
|
0.86 |
|
0.95 |
|
7 |
% |
-3 |
% |
Average
silver LBMA price |
$/oz |
15.83 |
|
16.10 |
|
-2 |
% |
|
17.02 |
|
14.89 |
|
14.99 |
|
14 |
% |
14 |
% |
Sales
quantities |
|
|
|
|
|
|
|
|
|
|
Payable zinc |
Mlbs |
329.6 |
|
279.2 |
|
18 |
% |
|
111.1 |
|
93.2 |
|
75.5 |
|
19 |
% |
47 |
% |
Payable lead |
Mlbs |
32.8 |
|
29.2 |
|
12 |
% |
|
10.6 |
|
12.1 |
|
8.1 |
|
-12 |
% |
31 |
% |
Payable
silver |
Mozs |
1.1 |
|
0.9 |
|
22 |
% |
|
0.3 |
|
0.4 |
|
0.3 |
|
-25 |
% |
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue amounts in the table above, and comparative quarter
amounts, have been restated to reflect the Company’s change in
accounting policy.
All Trevali’s zinc and lead concentrate sales
contracts provide final pricing in a future month based primarily
on quoted LME monthly average zinc and lead prices. Trevali
recognizes revenues at the time of shipment based on estimated
final pricing, with mark-to-market adjustments made each subsequent
period until final pricing on the date of settlement. Concentrate
smelting and refining charges and freight, included within smelting
and refining cost, are negotiated at market-related rates.
Zinc sales volumes increased by 19% during the
quarter which helped offset the lower zinc price and increased
smelting and refining rates, with YTD revenues before smelting and
refining costs in line with those in the prior year.
Settlement mark-to-market
|
|
Zinc |
Lead |
Spot 3-month future price as at June 30, 2019 |
$/lb |
1.13 |
|
0.87 |
Provisionally priced metal –
June 30, 2019 |
Mlbs |
150.8 |
|
2.8 |
Average
3-month future price for June 2019 |
$/lb |
1.13 |
|
0.86 |
Average
Q3 LME price |
$/lb |
1.06 |
|
0.92 |
Provisionally priced metal –
September 30, 2019 |
Mlbs |
151.5 |
|
3.5 |
Average
3-month future price for September 2019 |
$/lb |
1.05 |
|
0.94 |
Spot
3-month future price as at September 30, 2019 |
$/lb |
1.05 |
|
0.95 |
|
|
|
|
|
Trevali estimates that each $0.05 change in the
zinc price per pound realized from the September 30, 2019
provisional price recorded of $1.05 per pound would have an average
effect of approximately $7million on 2019 revenues.
The negative $11 million settlement
mark-to-market for zinc in Q3 2019 primarily reflects the decrease
in the estimated final pricing at September 30, 2019 compared to
the average zinc price during Q2 and Q3 2019, while also impacted
by the timing of sales and the quantity of provisionally priced
metal at various stages during the quarter.
PERKOA MINE, BURKINA FASO
|
|
YTD Q3’19 |
YTD Q3’18 |
YoY |
|
Q3’19 |
Q2’19 |
Q3’18 |
Q3'19 vs Q2'19 |
Q3'19 vs Q3'18 |
Production |
|
|
|
|
|
|
|
|
|
|
Ore mined |
t |
570,516 |
|
546,448 |
|
4 |
% |
|
195,058 |
|
184,566 |
|
171,739 |
|
6 |
% |
14 |
% |
Ore
milled |
t |
550,108 |
|
539,334 |
|
2 |
% |
|
189,445 |
|
187,191 |
|
183,367 |
|
1 |
% |
3 |
% |
Zinc head grade |
|
14.4 |
% |
14.7 |
% |
-2 |
% |
|
14.9 |
% |
14.8 |
% |
14.5 |
% |
1 |
% |
3 |
% |
Zinc recovery |
|
90.8 |
% |
92.5 |
% |
-2 |
% |
|
92.1 |
% |
90.3 |
% |
90.0 |
% |
2 |
% |
2 |
% |
Zinc concentrate grade |
|
50.0 |
% |
50.6 |
% |
-1 |
% |
|
50.8 |
% |
49.3 |
% |
49.9 |
% |
3 |
% |
2 |
% |
Zinc payable |
Mlbs |
133.5 |
|
136.4 |
|
-2 |
% |
|
48.3 |
|
46.3 |
|
44.4 |
|
4 |
% |
9 |
% |
Sales |
|
|
|
|
|
|
|
|
|
|
Zinc payable |
Mlbs |
144.1 |
|
129.8 |
|
11 |
% |
|
48.5 |
|
41.1 |
|
38.4 |
|
18 |
% |
26 |
% |
C1 Cash Cost1 |
$/lb |
0.89 |
|
0.77 |
|
16 |
% |
|
0.77 |
|
0.89 |
|
0.79 |
|
-13 |
% |
-3 |
% |
AISC1 |
$/lb |
0.95 |
|
0.84 |
|
13 |
% |
|
0.82 |
|
0.96 |
|
0.84 |
|
-15 |
% |
-2 |
% |
FINANCE |
|
|
|
|
|
|
|
|
|
|
Revenues, net |
$ |
118,615 |
|
145,046 |
|
-18 |
% |
|
34,861 |
|
30,779 |
|
33,438 |
|
13 |
% |
4 |
% |
Mine
operating expenses |
|
81,404 |
|
72,001 |
|
13 |
% |
|
22,116 |
|
25,473 |
|
21,945 |
|
-13 |
% |
1 |
% |
Adjusted EBITDA1 |
|
37,211 |
|
73,045 |
|
-49 |
% |
|
12,745 |
|
5,300 |
|
11,493 |
|
140 |
% |
11 |
% |
Other
expense (income) and impairment |
|
19,176 |
|
31,268 |
|
-39 |
% |
|
8,972 |
|
6,488 |
|
18,255 |
|
38 |
% |
-51 |
% |
EBITDA1 |
|
18,035 |
|
41,777 |
|
-57 |
% |
|
3,773 |
|
(1,182 |
) |
(6,762 |
) |
-419 |
% |
-156 |
% |
Depreciation, depletion & amortization |
|
27,933 |
|
26,514 |
|
5 |
% |
|
9,954 |
|
8,141 |
|
7,104 |
|
22 |
% |
40 |
% |
EBIT1 |
$ |
(9,898 |
) |
15,263 |
|
-165 |
% |
|
(6,181 |
) |
(9,323 |
) |
(13,866 |
) |
-34 |
% |
-55 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue amounts in the table above, and comparative quarter
amounts, have been restated to reflect the Company’s change in
accounting policy.
Payable zinc production for Q3 2019 was 48.3
million pounds, a 4% and 9% improvement over the prior and
corresponding quarter in 2018, respectively, and a quarterly
production record for Perkoa. Production gains have been achieved
from higher feed grades, higher plant throughput, and higher
recoveries. Feed grades were higher due to the reduction of mining
dilution from 15% to 11% while higher plant throughput was realized
as a result of more consistent ore feed and improved mill
availability. Zinc recoveries were improved as a result of ongoing
test work to modify the existing flotation circuit to pre-float
iron prior to the flotation of zinc. This also has the benefit of
decreasing the iron content in the zinc concentrate which reduces
freights costs and smelting and refining penalties.
C1 Cash Cost1 has decreased by $0.02 per pound
when compared to the corresponding quarter in 2018 reflecting the
lower production costs per pound associated with increased mine
production and reduced iron grades in zinc concentrate produced
offset by increases to industry benchmark zinc concentrate smelting
and refining charges and higher volumes of concentrate trucking.
The AISC1 decrease of $0.02 per pound reflects these increased
production volumes with sustaining capital expenditure and lease
payments in line with capital expenditure during the same period a
year ago. C1 Cash Cost1 and AISC1 improved quarter-over-quarter
reflecting cost improvements and higher production volumes.
2019 production and cost guidance remain
unchanged. This was the first full operational quarter since the
heavy fuel oil power conversion plant was commissioned while
additional operating cost efficiencies are being targeted in line
with the overall Trevali business improvement program. Improved
dilution control along with the modifications to the processing
circuit to eliminate iron prior to floating the zinc potentially
facilitates the processing of additional resources not currently in
the mine plan and is expected to, in combination with other cost
efficiencies, provide a basis to review, and possibly extend the
Perkoa Mine’s life.
ROSH PINAH MINE, NAMIBIA
|
|
YTD Q3’19 |
YTD Q3’18 |
YoY |
|
Q3’19 |
Q2’19 |
Q3’18 |
Q3'19 vs Q2'19 |
Q3'19 vs Q3'18 |
Production |
|
|
|
|
|
|
|
|
|
|
Ore mined |
t |
517,633 |
|
468,941 |
|
10 |
% |
|
179,289 |
|
168,661 |
|
136,810 |
|
6 |
% |
31 |
% |
Ore
milled |
t |
524,243 |
|
492,779 |
|
6 |
% |
|
181,490 |
|
171,389 |
|
141,860 |
|
6 |
% |
28 |
% |
Zinc head grade |
|
8.5 |
% |
8.7 |
% |
-2 |
% |
|
7.2 |
% |
8.8 |
% |
10.9 |
% |
-18 |
% |
-34 |
% |
Lead head grade |
|
1.1 |
% |
1.1 |
% |
0 |
% |
|
1.2 |
% |
1.1 |
% |
0.8 |
% |
9 |
% |
50 |
% |
Silver
head grade |
(ozs/t) |
0.4 |
|
0.4 |
|
0 |
% |
|
0.5 |
|
0.4 |
|
0.4 |
|
25 |
% |
25 |
% |
Zinc recovery |
|
86.3 |
% |
87.5 |
% |
-1 |
% |
|
83.8 |
% |
86.1 |
% |
88.4 |
% |
-3 |
% |
-5 |
% |
Lead recovery |
|
58.6 |
% |
64.5 |
% |
-9 |
% |
|
74.4 |
% |
50.9 |
% |
48.2 |
% |
46 |
% |
54 |
% |
Silver
recovery |
|
40.9 |
% |
36.0 |
% |
14 |
% |
|
49.8 |
% |
33.1 |
% |
38.3 |
% |
50 |
% |
30 |
% |
Zinc concentrate grade |
|
49.4 |
% |
47.0 |
% |
5 |
% |
|
49.8 |
% |
48.5 |
% |
47.0 |
% |
3 |
% |
6 |
% |
Lead concentrate grade |
|
41.1 |
% |
34.8 |
% |
18 |
% |
|
49.4 |
% |
38.6 |
% |
18.9 |
% |
28 |
% |
161 |
% |
Zinc payable |
Mlbs |
71.1 |
|
68.7 |
|
3 |
% |
|
20.3 |
|
24.0 |
|
25.1 |
|
-15 |
% |
-19 |
% |
Lead payable |
Mlbs |
6.8 |
|
7.0 |
|
-3 |
% |
|
3.2 |
|
1.9 |
|
1.0 |
|
68 |
% |
220 |
% |
Silver
payable |
Moz |
0.1 |
|
0.1 |
|
0 |
% |
|
– |
|
– |
|
– |
|
0 |
% |
0 |
% |
Sales |
|
|
|
|
|
|
|
|
|
|
Zinc payable |
Mlbs |
78.8 |
|
52.3 |
|
51 |
% |
|
24.2 |
|
17.7 |
|
6.7 |
|
37 |
% |
261 |
% |
Lead payable |
Mlbs |
3.2 |
|
4.4 |
|
-27 |
% |
|
– |
|
3.2 |
|
– |
|
-100 |
% |
0 |
% |
Silver
payable |
Moz |
– |
|
0.1 |
|
-100 |
% |
|
– |
|
– |
|
– |
|
0 |
% |
0 |
% |
C1 Cash Cost1 |
$/lb |
0.85 |
|
0.62 |
|
37 |
% |
|
1.01 |
|
0.67 |
|
0.48 |
|
51 |
% |
110 |
% |
AISC1 |
$/lb |
1.04 |
|
0.82 |
|
27 |
% |
|
1.25 |
|
0.88 |
|
0.71 |
|
42 |
% |
76 |
% |
FINANCE |
|
|
|
|
|
|
|
|
|
|
Revenues, net |
$ |
65,400 |
|
65,653 |
|
0 |
% |
|
16,030 |
|
15,989 |
|
6,004 |
|
0 |
% |
167 |
% |
Mine operating expenses |
|
37,252 |
|
30,946 |
|
20 |
% |
|
11,425 |
|
10,582 |
|
4,039 |
|
8 |
% |
183 |
% |
Adjusted EBITDA1 |
|
28,148 |
|
34,707 |
|
-19 |
% |
|
4,605 |
|
5,407 |
|
1,965 |
|
-15 |
% |
134 |
% |
Other (income) expense
and impairment |
|
239 |
|
9,259 |
|
-97 |
% |
|
(3,269 |
) |
5,395 |
|
2,614 |
|
-161 |
% |
-225 |
% |
EBITDA1 |
|
27,909 |
|
25,448 |
|
10 |
% |
|
7,874 |
|
12 |
|
(649 |
) |
65517 |
% |
-1313 |
% |
Depreciation,
depletion & amortization |
|
17,895 |
|
8,559 |
|
109 |
% |
|
5,995 |
|
5,598 |
|
1,219 |
|
7 |
% |
392 |
% |
EBIT1 |
$ |
10,014 |
|
16,889 |
|
-41 |
% |
|
1,879 |
|
(5,586 |
) |
(1,868 |
) |
-134 |
% |
-201 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue amounts in the table above, and comparative quarter
amounts, have been restated to reflect the Company’s change in
accounting policy.
Payable zinc production for Q3 2019 was 20.3
million pounds, 19% lower than during the corresponding quarter in
2018 as lower grades were mined and milled. Payable zinc production
for Q3 2019 represents a 15% reduction from the previous quarter as
grades declined, in line with expectations and prior guidance. Ore
blending efforts to better manage grade and ore type continue to be
successful, improving the process plant reliability as reflected in
28% and 6% increase in ore milled tonnes compared to the
corresponding quarter in 2018 and preceding quarter, respectively.
A significant increase in the ready-to-blast, drilled-off stope
tonnes available provides the blending flexibility to further
improve processing plant stability.
C1 Cash Cost1 and AISC1 increased by $0.53 per
pound and $0.54 per pound, respectively, when compared to the
corresponding quarter in 2018 because of a 19% decrease in payable
zinc production along with the increase to industry benchmark zinc
concentrate smelting and refining charges, and a significant
increase in sales volume. These cost increases are offset by lower
sustaining capital expenditures. C1 Cash Cost1 and AISC1 increased
quarter-over-quarter, reflecting the lower production, increased
offsite costs associated with higher sales and reduced by-product
revenues costs offset by lower sustaining capital expenditures. As
per normal shipping schedules, the second bi-annual lead
concentrate sale is expected for Q4 2019.
2019 production and cost guidance remain
unchanged. Zinc grades for the remainder of 2019 are expected to be
approximately 7.5%, in-line with disclosed annual guidance. The
zinc concentrate filter press continues to be on track for
installation by the end of the year and is expected to reduce zinc
concentrate moisture content, re-handling costs and variability,
and improved metal accounting accuracy due to lower concentrate
levels. RP2.0 feasibility study completion is targeted for Q2 2020
with several trade-off studies narrowing down on optimized
configuration; including mining method, material handling,
processing plant size, and surface and underground infrastructure
being conducted.
CARIBOU MINE, CANADA
|
|
YTD Q3’19 |
YTD Q3’18 |
YoY |
|
Q3’19 |
Q2’19 |
Q3’18 |
Q3'19 vs Q2'19 |
Q3'19 vs Q3'18 |
Production |
|
|
|
|
|
|
|
|
|
|
Ore mined |
t |
670,185 |
|
702,506 |
|
-5 |
% |
|
244,707 |
|
211,389 |
|
197,356 |
|
16 |
% |
24 |
% |
Ore
milled |
t |
681,123 |
|
710,349 |
|
-4 |
% |
|
248,710 |
|
221,628 |
|
227,596 |
|
12 |
% |
9 |
% |
Zinc head grade |
|
5.7 |
% |
5.9 |
% |
-3 |
% |
|
5.6 |
% |
5.6 |
% |
5.7 |
% |
0 |
% |
-2 |
% |
Lead head grade |
|
2.4 |
% |
2.3 |
% |
4 |
% |
|
2.3 |
% |
2.3 |
% |
2.3 |
% |
0 |
% |
0 |
% |
Silver
head grade |
(ozs/t) |
2.2 |
|
2.1 |
|
5 |
% |
|
2.1 |
|
2.2 |
|
2.1 |
|
-5 |
% |
0 |
% |
Zinc recovery |
|
78.7 |
% |
76.3 |
% |
3 |
% |
|
79.5 |
% |
78.6 |
% |
77.7 |
% |
1 |
% |
2 |
% |
Lead recovery |
|
63.8 |
% |
60.4 |
% |
6 |
% |
|
63.9 |
% |
63.0 |
% |
57.0 |
% |
1 |
% |
12 |
% |
Silver
recovery |
|
38.3 |
% |
36.0 |
% |
6 |
% |
|
37.8 |
% |
38.0 |
% |
31.1 |
% |
-1 |
% |
22 |
% |
Zinc concentrate grade |
|
47.0 |
% |
47.4 |
% |
-1 |
% |
|
47.7 |
% |
47.1 |
% |
48.4 |
% |
1 |
% |
-1 |
% |
Lead concentrate grade |
|
38.8 |
% |
38.7 |
% |
0 |
% |
|
38.6 |
% |
39.0 |
% |
41.6 |
% |
-1 |
% |
-7 |
% |
Zinc payable |
Mlbs |
56.1 |
|
58.3 |
|
-4 |
% |
|
20.3 |
|
18.0 |
|
18.6 |
|
13 |
% |
9 |
% |
Lead payable |
Mlbs |
20.8 |
|
19.8 |
|
5 |
% |
|
7.5 |
|
6.6 |
|
6.1 |
|
14 |
% |
23 |
% |
Silver
payable |
Moz |
0.6 |
|
0.6 |
|
0 |
% |
|
0.2 |
|
0.2 |
|
0.2 |
|
0 |
% |
0 |
% |
Sales |
|
|
|
|
|
|
|
|
|
|
Zinc payable |
Mlbs |
55.8 |
|
57.9 |
|
-4 |
% |
|
20.5 |
|
18.0 |
|
18.3 |
|
14 |
% |
12 |
% |
Lead payable |
Mlbs |
20.7 |
|
19.7 |
|
5 |
% |
|
7.8 |
|
6.1 |
|
6.0 |
|
28 |
% |
30 |
% |
Silver
payable |
Moz |
0.6 |
|
0.6 |
|
0 |
% |
|
0.2 |
|
0.2 |
|
0.2 |
|
0 |
% |
0 |
% |
C1 Cash Cost1 |
$/lb |
1.02 |
|
0.75 |
|
36 |
% |
|
0.93 |
|
1.09 |
|
0.89 |
|
-15 |
% |
4 |
% |
AISC1 |
$/lb |
1.15 |
|
0.94 |
|
22 |
% |
|
1.05 |
|
1.23 |
|
1.11 |
|
-15 |
% |
-5 |
% |
FINANCE |
|
|
|
|
|
|
|
|
|
|
Revenues, net |
$ |
58,135 |
|
80,857 |
|
-28 |
% |
|
19,235 |
|
18,741 |
|
19,989 |
|
3 |
% |
-4 |
% |
Mine operating expenses |
|
51,979 |
|
45,719 |
|
14 |
% |
|
17,917 |
|
16,553 |
|
15,432 |
|
8 |
% |
16 |
% |
Adjusted EBITDA1 |
|
6,156 |
|
35,138 |
|
-82 |
% |
|
1,318 |
|
2,188 |
|
4,557 |
|
-40 |
% |
-71 |
% |
Other
(income) expense and impairment |
|
4,017 |
|
14,378 |
|
-72 |
% |
|
2,113 |
|
3,699 |
|
13,120 |
|
-43 |
% |
-84 |
% |
EBITDA1 |
|
2,139 |
|
20,760 |
|
-90 |
% |
|
(795 |
) |
(1,511 |
) |
(8,563 |
) |
-47 |
% |
-91 |
% |
Depreciation,
depletion & amortization |
|
12,462 |
|
8,432 |
|
48 |
% |
|
4,683 |
|
4,010 |
|
2,034 |
|
17 |
% |
130 |
% |
EBIT1 |
$ |
(10,323 |
) |
12,328 |
|
-184 |
% |
|
(5,478 |
) |
(5,521 |
) |
(10,597 |
) |
-1 |
% |
-48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue amounts in the table above, and comparative quarter
amounts, have been restated to reflect the Company’s change in
accounting policy.
Payable zinc production for Q3 2019 was 20.3
million pounds, 9% higher than the corresponding quarter in 2018
because of increased mill throughput and recoveries, while 13%
higher when compared to the prior quarter as higher mill throughput
and recoveries offset a slight reduction in grade. Milled tonnage
improved quarter-over-quarter after the strike at the Belledune
lead smelter impacted production during Q2 2019 while production
tonnes were higher in Q3 2019 compared to both Q2 2019 and Q3 2018
as a result of improved development rates.
C1 Cash Cost1 increased when compared to the
corresponding quarter in 2018, reflecting increases to industry
benchmark zinc concentrate smelting and refining charges, offset by
increased by-product revenues as a result of higher lead sale
volumes and prices and silver prices. AISC1 however decreased
despite the increase in C1 Cash Cost1 because of decreased
sustaining capital expenditures. C1 Cash Cost1 and AISC1 have
improved quarter-over-quarter due to certain mining contractor
services being insourced, further offset by increased by-product
revenues and higher volume of zinc payable production.
2019 production and cost guidance remain
unchanged. Mill throughput is expected to continue into Q4 2019 at
levels realized during Q3 2019, benefiting both production and unit
costs. Since developing a sound understanding of the geotechnical
challenges, actions plans have been implemented to mitigate the
ground control constraints, together with a focus on advancing
development. Trial mining of an alternative sublevel caving mining
method is planned in areas not included in the mine plan while also
testing the viability of extracting sill pillars currently excluded
from reserves. Alternative ore sources, such as Restigouche, to
utilize spare mill capacity continues to be evaluated.
SANTANDER MINE, PERU
|
|
YTD Q3’19 |
YTD Q3’18 |
YoY |
|
Q3’19 |
Q2’19 |
Q3’18 |
Q3'19 vs Q2'19 |
Q3'19 vs Q3'18 |
Production |
|
|
|
|
|
|
|
|
|
|
Ore mined |
t |
601,162 |
|
532,390 |
|
13 |
% |
|
205,881 |
|
197,573 |
|
146,999 |
|
4 |
% |
40 |
% |
Ore
milled |
t |
656,605 |
|
574,810 |
|
14 |
% |
|
218,898 |
|
223,761 |
|
200,299 |
|
-2 |
% |
9 |
% |
Zinc head grade |
|
4.9 |
% |
4.3 |
% |
14 |
% |
|
5.1 |
% |
4.8 |
% |
4.1 |
% |
6 |
% |
24 |
% |
Lead head grade |
|
0.8 |
% |
0.5 |
% |
60 |
% |
|
0.8 |
% |
0.7 |
% |
0.6 |
% |
14 |
% |
33 |
% |
Silver
head grade |
oz/t |
1.2 |
|
0.9 |
|
33 |
% |
|
1.1 |
|
1.1 |
|
0.9 |
|
0 |
% |
22 |
% |
Zinc recovery |
|
87.5 |
% |
89.3 |
% |
-2 |
% |
|
87.5 |
% |
86.5 |
% |
89.5 |
% |
1 |
% |
-2 |
% |
Lead recovery |
|
82.8 |
% |
79.0 |
% |
5 |
% |
|
83.6 |
% |
82.8 |
% |
80.7 |
% |
1 |
% |
4 |
% |
Silver
recovery |
|
62.1 |
% |
61.0 |
% |
2 |
% |
|
60.9 |
% |
62.5 |
% |
62.3 |
% |
-3 |
% |
-2 |
% |
Zinc concentrate grade |
|
46.9 |
% |
47.6 |
% |
-1 |
% |
|
46.1 |
% |
47.0 |
% |
47.7 |
% |
-2 |
% |
-3 |
% |
Lead concentrate grade |
|
50.2 |
% |
49.3 |
% |
2 |
% |
|
49.2 |
% |
48.1 |
% |
48.7 |
% |
2 |
% |
1 |
% |
Zinc payable |
Mlbs |
51.9 |
|
40.8 |
|
27 |
% |
|
17.9 |
|
16.9 |
|
13.5 |
|
6 |
% |
33 |
% |
Lead payable |
Mlbs |
9.0 |
|
5.2 |
|
73 |
% |
|
2.8 |
|
2.8 |
|
2.1 |
|
0 |
% |
33 |
% |
Silver
payable |
Moz |
0.5 |
|
0.3 |
|
67 |
% |
|
0.1 |
|
0.1 |
|
0.1 |
|
0 |
% |
0 |
% |
Sales |
|
|
|
|
|
|
|
|
|
|
Zinc payable |
Mlbs |
50.9 |
|
39.2 |
|
30 |
% |
|
17.9 |
|
16.3 |
|
12.1 |
|
10 |
% |
48 |
% |
Lead payable |
Mlbs |
8.8 |
|
5.1 |
|
73 |
% |
|
2.9 |
|
2.7 |
|
2.0 |
|
7 |
% |
45 |
% |
Silver
payable |
Moz |
0.5 |
|
0.3 |
|
67 |
% |
|
0.1 |
|
0.1 |
|
0.1 |
|
0 |
% |
0 |
% |
C1 Cash Cost1 |
$/lb |
0.75 |
|
0.77 |
|
-3 |
% |
|
0.71 |
|
0.81 |
|
0.69 |
|
-12 |
% |
3 |
% |
AISC1 |
$/lb |
0.95 |
|
1.03 |
|
-8 |
% |
|
0.92 |
|
1.05 |
|
0.89 |
|
-12 |
% |
3 |
% |
FINANCE |
|
|
|
|
|
|
|
|
|
|
Revenues, net |
$ |
52,494 |
|
51,028 |
|
3 |
% |
|
17,009 |
|
16,788 |
|
13,664 |
|
1 |
% |
24 |
% |
Mine operating expenses |
|
31,185 |
|
28,792 |
|
8 |
% |
|
11,265 |
|
10,368 |
|
8,766 |
|
9 |
% |
29 |
% |
Adjusted EBITDA1 |
|
21,309 |
|
22,236 |
|
-4 |
% |
|
5,744 |
|
6,420 |
|
4,898 |
|
-11 |
% |
17 |
% |
Other
(income) expense and impairment |
|
675 |
|
6,688 |
|
-90 |
% |
|
1,021 |
|
2,795 |
|
6,422 |
|
-63 |
% |
-84 |
% |
EBITDA1 |
|
20,634 |
|
15,548 |
|
33 |
% |
|
4,723 |
|
3,625 |
|
(1,524 |
) |
30 |
% |
-410 |
% |
Depreciation, depletion & amortization |
|
7,894 |
|
9,692 |
|
-19 |
% |
|
1,674 |
|
2,299 |
|
4,218 |
|
-27 |
% |
-60 |
% |
EBIT1 |
$ |
12,740 |
|
5,856 |
|
118 |
% |
|
3,049 |
|
1,326 |
|
(5,742 |
) |
130 |
% |
-153 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue amounts in the table above, and comparative quarter
amounts, have been restated to reflect the Company’s change in
accounting policy.
Payable zinc production for Q3 2019 was 17.9
million pounds, a 33% improvement over the corresponding quarter in
2018 as higher grades were processed and in-line with the previous
quarter. Higher iron content and harder ore from the Magistral Sur
zone impacted recoveries and concentrate grades in the quarter and
are expected to persist for the remainder of 2019, with finer
grinding of the ore and lowering concentrate grades being assessed.
Mining and milling throughput have been steadily increased as the
mill is proving to be able to reliably sustain throughput in excess
of 2,500 tonnes per day with improved maintenance planning. In line
with the mine plan, higher grades, as compared to Q2 2019 and the
comparative quarter in 2018, will continue during 2019 and
2020.
C1 Cash Cost1 and AISC1 increased compared to
the corresponding quarter in 2018 mainly due to the higher
benchmark zinc concentrate smelting and refining charges, offset by
increased by-product revenues because of higher silver prices. The
quarter-over-quarter decrease in C1 Cash Cost1 reflects increased
zinc payable production and increased by-product revenue due to
higher silver prices while the incremental decrease in AISC1 over
the same period is attributed to lower sustaining capital
expenditures. Significant improvements in energy consumption was
achieved towards the end of Q3 2019 and is expected to translate
into cost savings during Q4 2019 and 2020 in line the overall
Trevali business improvement program.
2019 production and cost guidance remain
unchanged. Marginally higher-than-expected zinc grades are
anticipated to offset the impact of elevated iron levels and ore
hardness on concentrates produced. Recently delivered hydrogeology
studies have confirmed lower underground water flows with pumping
requirements forecasted to remain below budgeted levels.
GROWTH PROJECTS AND
STUDIES
The current anticipated milestones for 2019 through 2021 for
some of the Company's numerous projects are outlined below:
Growth projects and anticipated milestones for
2019 through 2021
A photo accompanying this announcement is
available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/54becf4c-f36f-431a-b6e4-3e11395553bc
Caribou: Trial Mining
Method
During Q3 2019, an evaluation of an alternative
sublevel caving mining method and the extraction of historic sill
pillars advanced. A dedicated trial area was identified, and trial
mining will commence in Q4 2019 with result expected in the same
quarter. Assuming a positive outcome, the extraction methods will
be adopted more widely at Caribou and a new mine plan will be
developed and current resources are expected to be converted to
reserves.
Caribou: Restigouche
Project
Restigouche is being considered as a
supplemental ore source to the Caribou mill as the Caribou mine is
not feeding the mill to capacity. Located approximately 35
kilometres away from the Caribou mill, Restigouche requires limited
capital to reach production. Ore would be stockpiled on site and
hauled as required to Caribou for processing. Engineering firm,
Stantec Inc. was engaged in Q3 2019 to support engineering. The
internal scoping study is expected to be completed by the end of Q1
2020 at which time an execution decision will be made.
Rosh Pinah: Filtration and
Grinding Project
The filtration and grinding upgrade project
continued to advance in Q3 2019 and is on track for completion in
Q4 2019 on budget. Benefits of the project are anticipated to
commence during Q1 2020 through improved metallurgical recoveries,
reduced processing times, and reduced inventory levels as a result
of the project delivering a finer grind size and decreasing
moisture levels in the concentrate.
Rosh Pinah: RP2.0 Project
The RP2.0 feasibility study continued to advance
during Q3 2019 and remains on target for an initial investment
decision in Q2 2020. Trade-off studies being evaluated to narrow
down on the optimized configuration include; mining methods,
material handling systems, process plant sizing, and both surface
and underground infrastructure. The following consulting firms have
been engaged on the study; DRA Global for processing and surface
infrastructure, AMC Consultants for mining and underground
infrastructure and Knight Piesold for tailings. The project is
expected to increase production by 60 – 80% of current output,
reduce unit costs, improve recoveries and concentrate grades at an
initial capital cost of $60 million to $80 million.
Santander: Santander
Pipe
Drilling continued during Q3 2019 targeting an
increase in inferred mineral resources and converting additional
inferred mineral resources to an indicated level. Two drills were
actively drilling the pipe as of the end of Q3 2019. An internal
preliminary economic assessment is expected to be completed by the
end of Q4 2020 which will evaluate the economic viability
incorporating the Santander Pipe ore into the existing
operation.
EXPLORATION AND DEVELOPMENT
The primary goal of Trevali’s 2019 exploration
program is to focus on near-mine exploration targets with the
objective to discover new mineral resources in proximity to
existing mine infrastructure. The Company had committed to invest
an original budget of $8.4 million which includes ground
geophysical surveys, geochemical surveys, first pass air-core
drilling and approximately 36,000 metres of diamond drilling from
surface and underground primarily focused on the Perkoa and
Santander mineral systems. Given the supportive results to date,
the budget has been increased to $11.7 million to cover further
drilling programs at all operations which includes additional
drilling along the northern extension of the Western Orefield at
Rosh Pinah, additional drilling at Perkoa to test the down-plunge
extension of the T3 horizon, additional exploration work at Caribou
to test anomalies at Murray Brook South and additional drilling at
Santander to extend and convert the Inferred Mineral
Resources at the Santander Pipe at depth.
Exploration expenditures to the end of Q3 2019
amounted to $7.6 million. A total of approximately 28,000 metres of
exploration drilling has been completed year to date. Trevali
expects to exceed the original budgeted amount of 36,000 metres
with 18,000 metres of additional drilling planned for Q4 2019 at
all operations for a total of 45,000 metres for the full year of
2019.
Perkoa Exploration, Burkina
Faso
A new volcanogenic massive sulfide (“VMS”)
horizon was discovered at Perkoa during Q2 2019 and exploration
drilling programs were modified to focus drilling in Q3 2019 to
further test the newly discovered T3 horizon. Two underground holes
intersected a VMS horizon referred to as T3, which is located
approximately 200 metres in the hanging wall of the main Footwall
lens as illustrated in Figure B. The T3 horizon represents the
third VMS horizon discovered at the Perkoa Mine. The discovery was
made using a combination of geochemical and alteration vectoring
and downhole electromagnetic (“EM”) survey.
During Q3 2019, 1500 metres of exploration
drilling was completed. PUX021, the first follow-up hole to test
the T3 horizon at depth since PUX020a (6.8 metres at 6.4% Zn), has
just been completed and intersected the T3 horizon 65 metres
northeast of PUX020a at the same depth, 920 metres below surface. A
zone of semi-massive mineralization was intersected between 449.6
and 456.9 metres. The hole was continued and intersected another
zone of mineralization almost 100 metres later, between 549.5 and
563.3 metres. This included sphalerite rich massive sulphide
mineralization at 552.3 to 555.2 metres. This is the widest zone of
massive sulphide intersected outside of the main two lenses with no
other drill holes nearby. In true distance it is only 50 metres
past the T3 horizon.
In Q3 2019 the rainy season was at its peak and
regional access was restricted. Geophysical surveys have continued
unimpeded, with a new conductive target identified 4.5 kilometres
northeast of Perkoa, in an area of outcropping alteration and
within an anomalous geochemical trend known as Aswe.
During Q4 2019, exploration will continue drill
testing these new horizons at the Perkoa Mine, aiming to expand on
preliminary exploration hits and develop Perkoa from a two-lens
mine into a multi-horizon system. Following the cessation of the
rainy season, regional exploration drilling will resume with Aswe
the first target to be tested.
Figure B: Perkoa
Mineralized lenses at the 500RL level showing Perkoa Main Zone
(blue), Hanging Wall Zone (green) and new T3 horizon (purple) based
on drill holes and geochemistry is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/2ceeb3fe-d90e-43a4-a22c-edb81b6877bd
Rosh Pinah Exploration,
Namibia
Late in Q3 2019, surface exploration drilling
began targeting the northern extension of the Western Orefield,
with over 1600 metres completed during the quarter. A 35-metre wide
zone of mineralization (assays pending) was intersected in the
first hole, with the same stratigraphy as the Western Orefield,
approximately 200 metres north of the nearest defined resources.
Following this immediate success, an additional 3000 metres
have been planned to continue drilling this underexplored area in
Q4 2019, targeting new inferred mineral resources by extending the
known mineralization to the north as illustrated in Figure C.
Drilling from underground continued during Q3
2019 at the Western Orefield and the AAB ore body targeting areas
at depth for mineral resource conversion. This mineral resource
conversion program will continue during Q4 2019.
Surface EM surveys which started in Q2 2019
continued in Q3 2019 along the Northern Extension of the Western
Orefield and along the Eastern Limb of the Rosh Pinah deposit. New
targets have been identified, with the most prospective being two
conductive targets adjacent to a large rhyolite dome, 1.5
kilometres east of the Rosh Pinah Mine. Mineralization within the
belt is associated with felsic volcanic flows and these untested
targets will be developed during Q4 2019.
Figure C: Rosh Pinah
Western Orefield Mineralized lenses with Q3 2019 drilling and
planned Q4 2019 drilling is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/6835b808-738c-43f9-8f9a-155a245f181e
Santander Exploration,
Peru
During Q3 2019, surface EM surveys were
conducted over previously identified anomalies located along strike
of the Magistral deposit, with data compilation ongoing and new
targets being generated ahead of the Q4 2019 drilling programs.
At the Santander Pipe, where an indicated
mineral resource is defined, mineral resource expansion drilling
has begun and will test the down-plunge and lateral extents of
mineralization on both flanks of the deposit. Exploration at the
Santander Pipe is targeting an increase in inferred mineral
resources. To date, two drill holes have been completed testing two
targets. The holes (SAN-0240-19 and SAN-0241-19) have interested
broad zones (+200 metres) of skarn alteration within which are 0.5
– +7 metres intervals of massive sulphide, assay results and BHEM
surveys are pending. These holes extend known mineralization ~100
metres to the north and ~50 metres down dip to the west.
An underground exploration drill program with a
planned 2,600 metres was initiated in September 2019 and will test
the southern extension of the Magistral South deposit. On surface,
several high-priority drill-ready exploration targets (Blato and
Blanquita) will also be tested during Q4 2019. An aggressive
definition drill program is proposed to begin in Q4 2019, with the
goal of converting additional inferred mineral resources to an
indicated level in support of the ongoing evaluation of the
Santander Pipe deposit’s potential to contribute to production in
future years.
A magneto-telluric survey was initiated in early
September with the goal of probing the deeper exploration potential
(~500 metres) of the property for possible porphyry and skarn type
mineralization. To date 50 of the originally planned 64 stations
have been surveyed. Data quality has been deemed to be excellent
and the survey will be expanded to cover as much of the property as
possible. A helicopter supported magnetic survey is scheduled
to begin in Q4 2019. This data will be used for target screening
and characterization as well as target generation.
Figure D: Santander
Magistral longitudinal section looking West with planned Q4 2019
drilling is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/7aa1347d-8d78-4781-9c95-4145e4efa556
Caribou Mine Exploration,
Canada
A surface mineral resource conversion drilling
program began in Q3 2019 at Caribou to test the northern extension
of the Caribou Northern Limb below the current development. The
northern extension is currently estimated to contain grades higher
than the Mineral Reserves cut-off grade. A total of four holes were
drilled during Q3 2019 with assays still pending at the end of the
quarter. However initial results from the first four holes appear
to be broadly validating the block model. The aim of the program
along the Northern Limb is to target a mineral resource upgrade
from inferred to an indicated level further north and at depth of
the current Measured and Indicated Mineral Resource, improve the
accuracy of the geological model and provide insight into the
economic viability of development along the Northern Limb. Drilling
along the Northern Limb will continue in Q4 2019 at Caribou and
exploration work is expected to start at Murray Brook South to test
surface anomalies.
Figure E: Caribou
Northern Limb longitudinal section with northern extension Q3 2019
drilling and planned Q4 2019 program is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/828e1d85-a506-400b-ac37-1eee31ec93f4
OUR BUSINESS
Trevali is a global base-metals mining company,
headquartered in Vancouver, Canada. The bulk of Trevali’s revenue
is generated from base-metals mining at its four operational
assets: the 90%-owned Perkoa Mine in Burkina Faso, the 90%-owned
Rosh Pinah Mine in Namibia, the wholly-owned Caribou Mine in
northern New Brunswick, Canada and the wholly-owned Santander Mine
in Peru. In addition, Trevali owns the Halfmile and Stratmat
Properties and the Restigouche Deposit in New Brunswick, Canada,
and the past-producing Ruttan Mine in northern Manitoba, Canada.
Trevali also owns an effective 44%-interest in the Gergarub Project
in Namibia, as well as an option to acquire a 100% interest in the
Heath Steele deposit located in New Brunswick, Canada.
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.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
INFORMATION
This news release contains “forward-looking
information” within the meaning of Canadian securities legislation
and “forward-looking statements” within the meaning of the United
States Private Securities Litigation Reform Act of 1995
(collectively, “forward-looking statements”). Forward-looking
statements are based on the beliefs, expectations and opinions of
management of the Company as of the date the statement are
published, and the Company assumes no obligation to update any
forward-looking statement, except as required by law.
Forward-looking statements relate to future
events or future performance and reflect management’s expectations
or beliefs regarding future events including, but not limited to,
statements with respect to the Company’s growth strategies,
expected annual savings from capital projects, anticipated effects
of commodity prices on revenues, estimation of mineral reserves and
mineral resources, the realization of mineral reserve estimates,
the timing and amount of estimated future production, costs of
production and 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 exploration programs
and life of mine expectancies. In certain cases, forward-looking
statements can be identified by the use of words such as “plans”,
“expects”, “outlook”, “guidance”, “budget”, “scheduled”,
“estimates”, “forecasts”, “intends”, “anticipates” or “believes”,
or variations of such words and phrases or statements that certain
actions, events or results “may”, “could”, “would”, “might”, “will
be taken”, “occur” or “be achieved” or the negative of these terms
or comparable terminology. By their very nature, forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements. Such factors include, among others,
risks related to actual results of current exploration activities;
changes in project parameters as plans continue to be refined;
future prices of zinc, lead, silver and other minerals and the
anticipated sensitivity of our financial performance to such
prices; possible variations in ore reserves, grade or recoveries;
dependence on key personnel; potential conflicts of interest
involving our directors and officers; labour pool constraints;
labour disputes; availability of infrastructure required for the
development of mining projects; delays or inability to obtain
governmental and regulatory approvals for mining operations or
financing or in the completion of development or construction
activities; counterparty risks; increased operating and capital
costs; foreign currency exchange rate fluctuations; operating in
foreign jurisdictions with risk of changes to governmental
regulation; compliance with governmental regulations; compliance
with environmental laws and regulations; land reclamation and mine
closure obligations; challenges to title or ownership interest of
our mineral properties; maintaining ongoing social license to
operate; impact of climatic conditions on the Company’s mining
operations; corruption and bribery; limitations inherent in our
insurance coverage; compliance with debt covenants; competition in
the mining industry; our ability to integrate new acquisitions into
our operations; cybersecurity threats; litigation; and other risks
of the mining industry including, without limitation, other risks
and uncertainties that are more fully described in the Company’s
annual information form, interim and annual audited consolidated
financial statements and management’s discussion and analysis of
those statements, all of which are filed and available for review
under the Company’s profile on SEDAR at www.sedar.com. Although the
Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results not to be as
anticipated, estimated or intended. Trevali provides no assurance
that forward-looking statements will prove to be accurate, as
actual results and future events may differ from those anticipated
in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements.
Compliance with NI 43-101
Unless otherwise indicated, Trevali has prepared
the technical information in this news release ("Technical
Information") based on information contained in the technical
reports, news releases and MD&A's (collectively the "Disclosure
Documents") available under the Company’s company profile on SEDAR
at www.sedar.com. Each Disclosure Document was prepared by, or
under the supervision of, a qualified person (a "Qualified Person")
as defined in National Instrument 43-101 Standards of
Disclosure for Mineral Projects of the Canadian Securities
Administrators ("NI 43-101"). Readers are encouraged to
review the full text of the Disclosure Documents which qualifies
the Technical Information. Readers are advised that mineral
resources that are not mineral reserves do not have demonstrated
economic viability. The Disclosure Documents are each intended to
be read as a whole, and sections should not be read or relied upon
out of context. The Technical Information is subject to the
assumptions and qualifications contained in the Disclosure
Documents. The disclosure of Technical Information in this news
release was reviewed and approved by Yan Bourassa, P. Geol., Vice
President, Mineral Resource Management, a Qualified Person under NI
43-101.
Note to United States Investors
In 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 NI 43-101, 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.
Non-IFRS Financial Performance
Measures
The items marked with a “1” are non-IFRS
measures and readers should refer to “Use of Non-IFRS Financial
Performance Measures” in the Company’s Management’s Discussion and
Analysis for the three and nine months ended September 30,
2019.
Investor Relations Information
Brendan Creaney –Vice President, Investor Relations
Email: bcreaney@trevali.com Phone: +1 (604) 638-5623
Source: Trevali Mining Corporation
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