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 twelve
months ended December 31st, 2019. A strong focus on operational
improvements led Trevali to exceed on annual production guidance
and deliver an annual production record of 417 million pounds of
zinc at an all-in-sustaining-cost1 (“AISC”) of $1.01 per pound. All
financial figures are in U.S. dollars.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
- Significantly improved safety performance with
46% reduction in Total Recordable Injury Frequency in 2019 compared
to 2018.
- Exceeded 2019 zinc production guidance by producing a
record annual 417 million payable pounds of zinc (3%
increase on 2018). Total 2019 lead and silver production also
exceeded guidance (21% and 15% increase, respectively, on
2018).
- Adjusted EBITDA1 of $106.9 million ($20.4
million during Q4 2019) and annual operating cash flows of $111.9
million (2018: $119.0 million) which facilitated voluntary debt
repayments of $69.5 million during 2019.
- Successful completion of the Rosh Pinah filtration and
grinding upgrade project on schedule and on budget.
- The T90 Program has identified $42 million of the
$50 million targeted sustainable efficiencies,
$14 million of which have been implemented and will
be realized on an ongoing annual basis at end of 2019 as part of
the goal to achieve an AISC1 of $0.90 per pound by the beginning of
2022.
- Advanced the RP2.0 Expansion Project with the
Pre-Feasibility Study now expected in Q2 2020.
- Achieved record zinc payable sales of 440 million
pounds in 2019, surpassing prior year by 9%, reducing
stock levels to 15,000 tonnes, a 40% reduction of zinc concentrate
inventories from Q3.
- A fixed zinc pricing arrangement at $1.10 per pound was
entered into for a six-month period, for December 2019 to
May 2020, equal to 70% of the zinc concentrate produced at Caribou
and Santander.
- Discovered a third VMS lens at Perkoa named “T3” and
began the resource conversion program at the Santander
Pipe. Exploration spend of $10.4 million achieving
41,000 metres drilled during 2019.
Ricus Grimbeek, Trevali’s President and CEO
commented “We are pleased to report in 2019 we exceeded the top end
of production guidance for all metals and broke company annual
production records for both zinc and lead. Both Cash Costs and
All-In-Sustaining Cost came in at the lower end of guidance despite
higher than expected industry treatment charges demonstrating that
our T90 Business Improvement Program is firmly in place.
While 2019 was a great year we have much work to
do to continue to transform Trevali by developing our operational
platform, delivering our organic growth projects, deploying
technology and further integrating safety and sustainability into
our business.
Thank you to everyone that was involved in
making 2019 a success and looking forward to keeping the momentum
going in 2020.”
This news release should be read in conjunction
with Trevali’s quarterly consolidated financial statements and
management’s discussion and analysis for the three and twelve
months ended December 31st, 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 Q4 and Full Year 2019
Management’s Discussion and Analysis.
Q4 AND FULL YEAR 2019 SUMMARY
RESULTS
|
|
2019 |
|
2018 |
|
YoY |
|
Q4’19 |
Q3’19 |
Q4’18 |
Q4'19 vs Q3'19 |
Q4'19 vs Q4'18 |
Zinc payable production |
Mlbs |
417.4 |
|
406.9 |
|
3% |
|
|
104.8 |
|
106.8 |
|
102.7 |
|
–2% |
|
2% |
|
Lead payable production |
Mlbs |
50.3 |
|
41.7 |
|
21% |
|
|
13.8 |
|
13.6 |
|
9.7 |
|
1% |
|
42% |
|
Silver
payable production |
Moz |
1.5 |
|
1.3 |
|
15% |
|
|
0.4 |
|
0.4 |
|
0.3 |
|
0% |
|
33% |
|
Revenue |
$ |
386,110 |
|
464,347 |
|
–17% |
|
|
91,466 |
|
87,135 |
|
121,763 |
|
5% |
|
–25% |
|
Adjusted EBITDA1 |
$ |
106,864 |
|
198,807 |
|
–46% |
|
|
20,364 |
|
22,487 |
|
39,427 |
|
–9% |
|
–48% |
|
Net (loss) income |
$ |
(35,411 |
) |
(230,595 |
) |
85% |
|
|
(3,833 |
) |
(16,131 |
) |
(251,778 |
) |
76% |
|
98% |
|
Net
(loss) income per share |
$ |
(0.04 |
) |
(0.27 |
) |
85% |
|
|
0.00 |
|
(0.02 |
) |
(0.29 |
) |
100% |
|
100% |
|
Operating Cost1 |
$/t |
67 |
|
68 |
|
–1% |
|
|
67 |
|
63 |
|
76 |
|
6% |
|
–12% |
|
C1 Cash Cost1 |
$/lb |
0.88 |
|
0.77 |
|
14% |
|
|
0.86 |
|
0.84 |
|
0.90 |
|
2% |
|
–4% |
|
AISC1 |
$/lb |
1.01 |
|
0.96 |
|
5% |
|
|
1.02 |
|
0.96 |
|
1.15 |
|
6% |
|
–11% |
|
Sustaining capital
expenditure1 |
$ |
52,004 |
|
76,781 |
|
–32% |
|
|
15,752 |
|
11,975 |
|
26,373 |
|
32% |
|
–40% |
|
Exploration expenditure |
$ |
10,362 |
|
12,837 |
|
–19% |
|
|
2,755 |
|
2,576 |
|
7,952 |
|
7% |
|
–65% |
|
Conversion of tonnes to pounds, 1 tonne =
2,204.62 pounds or lbs.
Revenue amounts in the table above, including
previous and comparative annual and quarterly amounts have been
restated to reflect the change in accounting policy set out in Note
3 of the audited consolidated financial statements for the year
ended December 31, 2019.
Q4 AND FULL YEAR 2019 RESULTS CONFERENCE
CALL
The Company will host a conference call and
presentation webcast at 01:00PM Eastern Time on Friday, February
21st, 2020 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: Friday,
February 21st, 2020 at 01:00PM Eastern TimeToll-free (North
America): 1 (877) 291-4570International: +1 (647) 788-4919Webcast:
http://www.gowebcasting.com/10472
T90 PROGRAM
At the end of Q3 2019, Trevali launched the T90
Business Improvement Program which targets $50 million of annual
sustainable efficiencies and a reduction in AISC1 to $0.90 per
pound of zinc by the beginning of 2022. As of the end of 2019, $42
million in annual sustainable efficiencies have been identified and
$14 million in sustainable efficiencies have been implemented
and will be realized on an ongoing annual basis.
FINANCIAL AND OPERATIONAL SUMMARY
The following table sets forth selected
consolidated financial and operating information for each of the
eight most recently completed quarters:
|
Q4’19 |
Q3’19 |
Q2’19 |
Q1’19 |
Q4’18 |
Q3’18 |
Q2’18 |
Q1’18 |
Revenues |
91,466 |
|
87,135 |
|
82,297 |
|
125,212 |
121,763 |
|
73,095 |
|
151,593 |
117,895 |
Zinc sales (Mlbs) |
110 |
|
111 |
|
93 |
|
125 |
124 |
|
76 |
|
114 |
89 |
EBITDA1 |
19,611 |
|
12,945 |
|
(7,443 |
) |
46,674 |
(271,499 |
) |
(22,401 |
) |
58,785 |
58,546 |
Adjusted EBITDA1 |
20,364 |
|
22,487 |
|
17,558 |
|
46,455 |
39,427 |
|
21,249 |
|
83,039 |
52,427 |
Net (loss) income |
(3,833 |
) |
(16,131 |
) |
(31,563 |
) |
16,116 |
(251,778 |
) |
(30,846 |
) |
23,454 |
28,575 |
Net (loss) income per share – basic and
diluted |
0.00 |
|
(0.02 |
) |
(0.04 |
) |
0.02 |
(0.29 |
) |
(0.04 |
) |
0.03 |
0.03 |
Adjusted
(loss) income per share1 |
0.00 |
|
(0.01 |
) |
(0.01 |
) |
0.02 |
0.01 |
|
(0.04 |
) |
0.04 |
0.02 |
Revenue amounts in the table above have been
restated to reflect the Company's change in accounting policy.
Revenues increased by 5% from Q3 2019 due to
higher quarterly lead payable sales as quarterly London Metal
Exchange (“LME”) average zinc prices and zinc payable sales
remained consistent. EBITDA1 and Adjusted EBITDA1 were similar
during the quarter due to minimal settlement mark-to-market
adjustments (refer to summary on page 5).
Net loss in Q4 2019 was $3.8 million or $0.00
per share, compared to net loss of $251.8 million or ($0.29)
per share, for the same period a year ago. The decrease in loss per
share during Q4 2019 is largely attributable to the 2018 Q4 net
non-cash impairment charge of $263.0 million primarily driven by
the decline in the price of zinc.
Quarterly Adjusted EBITDA1 has stabilized during
2019, with the main source of variations being commodity price
fluctuations and improved logistics of concentrate inventories at
the African operations. The Company’s mining activities are
conducted throughout the year, and there are no notable variations
due to seasonality.
EBITDA1 was higher and net loss lower for Q4
2019 compared to Q4 2018 despite significantly higher
benchmark smelting and refining charges and lower zinc prices. The
Q4 2019 negative settlement mark-to-market amounted to
$0.3 million compared to a positive settlement mark-to-market
of $1.7 million during the same period in 2018.
|
|
|
|
2019 |
|
2018 |
|
2017 |
Revenues |
|
|
|
386,110 |
|
464,347 |
|
328,614 |
Zinc sales (Mlbs) |
|
|
|
440 |
|
403 |
|
244 |
EBITDA1 |
|
|
|
71,787 |
|
(176,569 |
) |
100,960 |
Adjusted EBITDA1 |
|
|
|
106,864 |
|
198,807 |
|
117,110 |
Net (loss) income |
|
|
|
(35,411 |
) |
(230,595 |
) |
20,227 |
Net (loss) income per share – basic and diluted |
|
|
|
(0.04 |
) |
(0.27 |
) |
0.03 |
Adjusted income per share1 |
|
|
|
0.00 |
|
0.12 |
|
0.07 |
Totals assets |
|
|
|
744,570 |
|
825,740 |
|
1,180,159 |
Revenue amounts in the table above have been
restated to reflect the Company's change in accounting policy.
The above trend analysis shows a large increase
in zinc sales volumes during 2018 which is the first full year of
operations following the acquisition of the Perkoa and Rosh Pinah
mines in September 2017. A net loss was reported in 2018 despite
high revenues due to a net non-cash impairment charge of $263.0
million. Revenues for 2019 have decreased, despite increased sales
volumes which was caused by the year-over-year decline in the price
of zinc and higher benchmark smelting and refining charges.
|
|
2019 |
2018 |
YoY |
|
Q4’19 |
Q3’19 |
Q4’18 |
Q4'19 vs Q3'19 |
Q4'19 vs Q4'18 |
Production |
|
|
|
|
|
|
|
|
|
|
Ore mined |
t |
3,150,423 |
|
2,973,669 |
|
6 |
% |
|
790,927 |
|
824,935 |
|
723,384 |
|
–4 |
% |
9 |
% |
Ore
milled |
t |
3,234,358 |
|
3,054,768 |
|
6 |
% |
|
822,278 |
|
838,543 |
|
737,496 |
|
–2 |
% |
11 |
% |
Zinc head grade |
|
8.0 |
% |
8.3 |
% |
–4 |
% |
|
7.8 |
% |
7.9 |
% |
8.8 |
% |
–1 |
% |
–11 |
% |
Lead head grade |
|
1.5 |
% |
1.4 |
% |
7 |
% |
|
2.0 |
% |
1.5 |
% |
1.2 |
% |
33 |
% |
67 |
% |
Silver
head grade |
(ozs/t) |
1.4 |
|
1.2 |
|
17 |
% |
|
1.3 |
|
1.3 |
|
1.1 |
|
0 |
% |
18 |
% |
Zinc recovery |
|
87.2 |
% |
87.0 |
% |
0 |
% |
|
88.2 |
% |
87.1 |
% |
85.9 |
% |
1 |
% |
3 |
% |
Lead recovery |
|
67.2 |
% |
65.1 |
% |
3 |
% |
|
69.5 |
% |
69.6 |
% |
70.3 |
% |
0 |
% |
–1 |
% |
Silver
recovery |
|
46.2 |
% |
43.9 |
% |
5 |
% |
|
47.4 |
% |
45.9 |
% |
48.5 |
% |
3 |
% |
–2 |
% |
Zinc payable |
Mlbs |
417.4 |
|
406.9 |
|
3 |
% |
|
104.8 |
|
106.8 |
|
102.7 |
|
–2 |
% |
2 |
% |
Lead payable |
Mlbs |
50.3 |
|
41.7 |
|
21 |
% |
|
13.8 |
|
13.6 |
|
9.7 |
|
1 |
% |
42 |
% |
Silver
payable |
Moz |
1.5 |
|
1.3 |
|
15 |
% |
|
0.4 |
|
0.4 |
|
0.3 |
|
0 |
% |
33 |
% |
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zinc payable |
Mlbs |
440.1 |
|
403.3 |
|
9 |
% |
|
110.4 |
|
111.1 |
|
124.1 |
|
–1 |
% |
–1 |
% |
Lead payable |
Mlbs |
47.5 |
|
39.9 |
|
19 |
% |
|
14.8 |
|
10.6 |
|
10.7 |
|
40 |
% |
38 |
% |
Silver
payable |
Moz |
1.4 |
|
1.2 |
|
17 |
% |
|
0.3 |
|
0.3 |
|
0.3 |
|
0 |
% |
0 |
% |
Cost per
unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Cost1 |
$/t |
67 |
|
68 |
|
–1 |
% |
|
67 |
|
63 |
|
76 |
|
6 |
% |
–12 |
% |
C1 Cash Cost1 |
$/lb |
0.88 |
|
0.77 |
|
14 |
% |
|
0.86 |
|
0.84 |
|
0.90 |
|
2 |
% |
–4 |
% |
AISC1 |
$/lb |
1.01 |
|
0.96 |
|
5 |
% |
|
1.02 |
|
0.96 |
|
1.15 |
|
6 |
% |
–11 |
% |
Quarterly zinc payable production reduced
slightly (2%) to 104.8 million pounds compared to Q3, following two
consecutive record production quarters in Q2 and Q3 and a 2%
increase from the comparative quarter in 2018. Compared to the
comparative quarter of 2018, ore tonnes milled at Rosh Pinah,
Perkoa, Santander and Caribou improved sequentially, with overall
lower grades as planned due to lower grade ore milled at all
operations except Santander where higher grades are attributed to
continued improvement with dilution control and to higher grade ore
access recently developed in accordance with the mine plan.
Zinc payable sales in Q4 2019 were 110.4 million
pounds, representing a balanced sales quarter at 25% of annual
production. Cost per unit during the quarter increased compared to
Q3 2019 due primarily to higher than average development meter
costs at Caribou, as well as scheduled mill maintenance and
implementation of improvements in the grinding and flotation
circuits to improve recoveries and concentrate grades at Santander.
During 2019, sales of zinc payable increased due to improved
logistics and to the successful sale of inventory backlog achieving
a record low balance.
Initiatives across Trevali to improve shipping
logistics during 2019 realized benefits with concentrate inventory
levels steadily decreasing to the point of effectively just-in-time
inventory levels at December 31, 2019. A new zinc concentrate
filter press was installed at Rosh Pinah during Q4 2019, which is
expected to reduce the volatility of concentrate sales volumes and
to reduce stock levels in conjunction with an improved concentrate
logistics performance.
2019 costs were positively impacted by the
decreasing operating cost trend and increased production. There is
an overall net decrease in 2019 operating costs over the prior year
except for the significantly higher benchmark zinc concentrate
smelting and refining charges in 2019 compared to 2018 which had an
impact of adding $0.10 per pound (13% of C1 Cash Cost1) to
both C1 Cash Cost1 and AISC1.
1 See "Use of Non-IFRS Financial
Performance Measures".
OUTLOOK
Commodity Markets
We believe the outlook for the zinc market is
supportive of higher prices. In 2019, global consumption of the
metal was greater than what the market could supply for a fourth
consecutive year. Over the past year, zinc smelters globally have
been slow to respond to increasing smelting and refining charges.
As a result, refined zinc inventories are currently at levels which
have not been experienced since July 2007 at a time when the zinc
price was approximately $1.60 per pound. This deficit to refined
zinc inventories occurred despite two years of demand contraction.
Despite demand growth of the metal forecasted to return in 2020 and
2021 at rates of 1.0% and 1.6%, respectively, we believe the
inventory deficit will continue, counter to what some market
participants forecast. The combination of a relatively low zinc
price coupled with higher smelting and refining charges will lead
to a widening inventory deficit resulting in marginal and
restarting mining operations curtailing or suspending production
much more rapidly and in higher volume than forecast by the market.
This should provide fundamental support for a higher 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
Q4 2019 average zinc price increased slightly (2%) compared to the
previous quarter and remains volatile.
|
|
2019 |
2018 |
YoY |
|
Q4’19 |
Q3’19 |
Q4’18 |
Q4'19 vs Q3'19 |
Q4'19 vs Q4'18 |
Revenues |
|
|
|
|
|
|
|
|
|
|
Zinc revenue |
$ |
497,160 |
|
526,177 |
|
–6 |
% |
|
117,406 |
|
116,771 |
|
145,594 |
|
1 |
% |
–19 |
% |
Lead and silver revenue |
|
70,339 |
|
62,309 |
|
13 |
% |
|
21,278 |
|
17,198 |
|
14,709 |
|
24 |
% |
45 |
% |
Smelting and refining costs |
|
(181,389 |
) |
(124,139 |
) |
–46 |
% |
|
(47,218 |
) |
(46,834 |
) |
(38,540 |
) |
–1 |
% |
–23 |
% |
Net
revenue |
$ |
386,110 |
|
464,347 |
|
–17 |
% |
|
91,466 |
|
87,135 |
|
121,763 |
|
5 |
% |
–25 |
% |
Average zinc LME price |
$/lb |
1.16 |
|
1.33 |
|
–13 |
% |
|
1.08 |
|
1.06 |
|
1.19 |
|
2 |
% |
–9 |
% |
Average lead LME price |
$/lb |
0.91 |
|
1.02 |
|
–11 |
% |
|
0.92 |
|
0.92 |
|
0.89 |
|
0 |
% |
3 |
% |
Average
silver LBMA price |
$/oz |
16.20 |
|
15.71 |
|
3 |
% |
|
17.33 |
|
17.02 |
|
14.55 |
|
2 |
% |
19 |
% |
Sales
quantities |
|
|
|
|
|
|
|
|
|
|
|
|
Payable zinc |
Mlbs |
440.1 |
|
403.3 |
|
9 |
% |
|
110.4 |
|
111.1 |
|
124.1 |
|
–1 |
% |
–11 |
% |
Payable lead |
Mlbs |
47.5 |
|
39.9 |
|
19 |
% |
|
14.8 |
|
10.6 |
|
10.7 |
|
40 |
% |
38 |
% |
Payable
silver |
Mozs |
1.4 |
|
1.2 |
|
17 |
% |
|
0.3 |
|
0.3 |
|
0.3 |
|
0 |
% |
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. The Company
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 and zinc price both remained
stable compared to the prior quarter, however the net revenue
decreases over Q4 2018 are due to lower sales volumes and zinc
price. Benchmark smelting and refining rates have increased at an
amount equating to an additional $0.10 per pound, with 2019
revenues before smelting and refining costs slightly below prior
year with the increase in volumes unable to offset the decrease in
price.
Settlement Mark-to-market
|
|
Zinc |
Lead |
Spot 3-month future price as at September 30, 2019 |
$/lb |
1.05 |
0.95 |
Provisionally priced metal – September 30, 2019 |
Mlbs |
151.5 |
3.5 |
Average 3-month future price for September 2019 |
$/lb |
1.05 |
0.94 |
Average Q4 LME price |
$/lb |
1.08 |
0.92 |
Provisionally priced metal – December 31, 2019 |
Mlbs |
147.4 |
5.9 |
Average 3-month future price for December 2019 |
$/lb |
1.03 |
0.87 |
Spot 3-month future price as at December 31, 2019 |
$/lb |
1.04 |
0.88 |
Management estimates that each $0.05 change in
the zinc price per pound realized from the December 31, 2019
provisional price recorded of $1.03 per pound would result in
approximately $7.0 million on 2019 settlement mark-to-market and
EBITDA.
The negative $0.3 million settlement
mark-to-market for Q4 2019 primarily reflects the decrease in the
estimated final zinc pricing at December 31, 2019 from $1.05 per
pound to $1.03 per pound compared to the average zinc prices during
Q3 and Q4 2019 of $1.06 and $1.08 per pound, respectively. This is
also impacted by the quantity of provisionally priced metal at
various stages during the quarter and the timing of sales weighted
towards the end of the quarter with 56% of Q4 sales occurring
during the month of December.
A fixed zinc pricing arrangement was entered
into in November 2019 for 70% of the zinc concentrate produced at
Caribou and Santander and for a six-month period covering December
2019 to May 2020 at a price of $1.10 per pound. Management made a
strategic decision to fix the zinc price at the two higher cost
operations when the opportunity arose with the temporary
strengthening of the zinc price in November. This will reduce the
quantity of provisionally priced metal in future quarters and
reduce the impact of the settlement mark-to-market adjustments. As
a result of the fixed pricing arrangement which covered December
2019, net income for Q4 2019 was $0.7 million higher.
1 See "Use of Non-IFRS Financial Performance
Measures".
PERKOA MINE, BURKINA FASO
|
|
2019 |
2018 |
YoY |
|
Q4’19 |
Q3’19 |
Q4’18 |
Q4'19 vs Q3'19 |
Q4'19 vs Q4'18 |
Production |
|
|
|
|
|
|
|
|
|
|
Ore mined |
t |
751,681 |
|
708,263 |
|
6 |
% |
|
181,165 |
|
195,058 |
|
161,815 |
|
–7 |
% |
12 |
% |
Ore
milled |
t |
739,849 |
|
724,995 |
|
2 |
% |
|
189,740 |
|
189,445 |
|
185,662 |
|
0 |
% |
2 |
% |
Zinc head grade |
|
14.3 |
% |
14.9 |
% |
–4 |
% |
|
14.0 |
% |
14.9 |
% |
15.4 |
% |
–6 |
% |
–9 |
% |
Zinc recovery |
|
91.6 |
% |
91.8 |
% |
0 |
% |
|
93.9 |
% |
92.1 |
% |
90.0 |
% |
2 |
% |
4 |
% |
Zinc concentrate grade |
|
50.5 |
% |
50.3 |
% |
0 |
% |
|
52.0 |
% |
50.8 |
% |
49.6 |
% |
2 |
% |
5 |
% |
Zinc payable |
Mlbs |
179.8 |
|
184.0 |
|
–2 |
% |
|
46.2 |
|
48.3 |
|
47.6 |
|
–4 |
% |
–3 |
% |
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zinc
payable |
Mlbs |
191.5 |
|
182.5 |
|
5 |
% |
|
47.3 |
|
48.5 |
|
52.7 |
|
–2 |
% |
–10 |
% |
Operating Cost1 |
$/t |
96 |
|
105 |
|
–9 |
% |
|
89 |
|
88 |
|
118 |
|
1 |
% |
–25 |
% |
C1 Cash Cost1 |
$/lb |
0.88 |
|
0.80 |
|
10 |
% |
|
0.83 |
|
0.77 |
|
0.88 |
|
8 |
% |
–6 |
% |
AISC1 |
$/lb |
0.94 |
|
0.91 |
|
3 |
% |
|
0.90 |
|
0.82 |
|
1.13 |
|
10 |
% |
–20 |
% |
FINANCE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues, net |
$ |
151,980 |
|
193,341 |
|
–21 |
% |
|
33,365 |
|
34,861 |
|
48,295 |
|
–4 |
% |
–31 |
% |
Mine
operating expenses |
|
105,011 |
|
108,402 |
|
–3 |
% |
|
23,607 |
|
22,116 |
|
36,402 |
|
7 |
% |
–35 |
% |
Adjusted EBITDA1 |
|
46,969 |
|
84,939 |
|
–45 |
% |
|
9,758 |
|
12,745 |
|
11,893 |
|
–23 |
% |
–18 |
% |
Other
expenses (income) and impairment |
|
16,038 |
|
57,722 |
|
–72 |
% |
|
(3,138 |
) |
8,972 |
|
23,278 |
|
–135 |
% |
–113 |
% |
EBITDA1 |
|
30,931 |
|
27,217 |
|
14 |
% |
|
12,896 |
|
3,773 |
|
(11,385 |
) |
242 |
% |
213 |
% |
Depreciation, depletion & amortization |
|
35,702 |
|
27,904 |
|
28 |
% |
|
7,769 |
|
9,954 |
|
1,390 |
|
–22 |
% |
459 |
% |
EBIT1 |
$ |
(4,771 |
) |
(687 |
) |
–594 |
% |
|
5,127 |
|
(6,181 |
) |
(12,775 |
) |
183 |
% |
140 |
% |
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 Q4 2019 was 46.2
million pounds, a 4% and 3% reduction over the prior and
corresponding quarter in 2018, respectively. High production levels
have been sustained through higher plant throughput, and higher
recoveries. Recoveries were higher due to decreasing mining
dilution from 15% during the first half of 2019 to 11% while a
higher plant throughput rate was realized as a result of more
consistent ore feed and improved mill availability. Improved zinc
recoveries have been sustained following the modification of the
existing flotation circuit to pre-float iron prior to the flotation
of zinc during Q2 2019. The resulting benefits from decreasing
the iron content in the zinc concentrate, through reduced freight
costs and reduced smelting and refining penalties, are being
realized.
C1 Cash Cost1 reduced by 6% compared to the
corresponding quarter in 2018, reflecting the lower production
costs per pound associated with increased mining and processing
performance and reduced iron grades in zinc concentrate produced.
This reduction was offset by significant increases to industry
benchmark zinc concentrate smelting and refining charges and higher
volumes of concentrate trucking. The AISC1 decrease of $0.23 per
pound compared to Q4 2018 is due to a decrease in sustaining
capital expenditures, primarily due to the construction of the
heavy fuel oil power conversion plant in the prior year. C1 Cash
Cost1 and AISC1 increased quarter-over-quarter as a result of
one-off credits recorded in Q3 2019.
2019 production guidance was exceeded while
achieving cost guidance, despite the higher benchmark smelting and
refining charges during 2019. Improved dilution control along with
the modifications to the processing plant to eliminate iron prior
to floating the zinc potentially facilitates the processing of
additional mineral resources not currently in the mine plan and is
expected to, in combination with other cost efficiencies, provide a
basis to review, and potentially extend Perkoa Mine’s life.
1 See "Use of Non-IFRS Financial Performance
Measures".
ROSH PINAH MINE, NAMIBIA
|
|
2019 |
2018 |
YoY |
|
Q4’19 |
Q3’19 |
Q4’18 |
Q4'19 vs Q3'19 |
Q4'19 vs Q4'18 |
Production |
|
|
|
|
|
|
|
|
|
|
Ore mined |
t |
714,356 |
|
627,295 |
|
14 |
% |
|
196,723 |
|
179,289 |
|
158,354 |
|
10 |
% |
24 |
% |
Ore milled |
t |
705,651 |
|
641,980 |
|
10 |
% |
|
181,408 |
|
181,490 |
|
149,201 |
|
0 |
% |
22 |
% |
Zinc head grade |
|
8.2 |
% |
9.2 |
% |
–11 |
% |
|
7.4 |
% |
7.2 |
% |
10.9 |
% |
3 |
% |
–32 |
% |
Lead head grade |
|
1.3 |
% |
1.0 |
% |
30 |
% |
|
2.0 |
% |
1.2 |
% |
0.8 |
% |
67 |
% |
150 |
% |
Silver head grade |
oz/t |
0.6 |
|
0.5 |
|
20 |
% |
|
1.1 |
|
0.5 |
|
0.4 |
|
120 |
% |
175 |
% |
Zinc recovery |
|
85.9 |
% |
86.8 |
% |
–1 |
% |
|
84.5 |
% |
83.8 |
% |
84.9 |
% |
1 |
% |
0 |
% |
Lead recovery |
|
63.9 |
% |
64.7 |
% |
–1 |
% |
|
72.1 |
% |
74.4 |
% |
65.4 |
% |
–3 |
% |
10 |
% |
Silver recovery |
|
47.1 |
% |
46.8 |
% |
1 |
% |
|
54.3 |
% |
49.8 |
% |
53.2 |
% |
9 |
% |
2 |
% |
Zinc concentrate grade |
|
49.6 |
% |
47.7 |
% |
4 |
% |
|
50.0 |
% |
49.8 |
% |
49.7 |
% |
0 |
% |
1 |
% |
Lead concentrate grade |
|
45.3 |
% |
30.5 |
% |
49 |
% |
|
52.0 |
% |
49.4 |
% |
19.8 |
% |
5 |
% |
163 |
% |
Zinc payable |
Mlbs |
92.0 |
|
94.2 |
|
–2 |
% |
|
20.9 |
|
20.3 |
|
25.4 |
|
3 |
% |
–18 |
% |
Lead payable |
Mlbs |
12.1 |
|
8.5 |
|
42 |
% |
|
5.3 |
|
3.2 |
|
1.5 |
|
66 |
% |
253 |
% |
Silver payable |
Moz |
0.2 |
|
0.1 |
|
100 |
% |
|
0.2 |
|
– |
|
– |
|
100 |
% |
100 |
% |
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zinc payable |
Mlbs |
105.5 |
|
91.4 |
|
15 |
% |
|
26.7 |
|
24.2 |
|
39.1 |
|
10 |
% |
–32 |
% |
Lead payable |
Mlbs |
9.3 |
|
7.7 |
|
21 |
% |
|
6.0 |
|
– |
|
3.3 |
|
100 |
% |
82 |
% |
Silver
payable |
Moz |
0.1 |
|
0.1 |
|
0 |
% |
|
0.1 |
|
– |
|
– |
|
100 |
% |
100 |
% |
Operating Cost1 |
$/t |
54 |
|
59 |
|
–8 |
% |
|
59 |
|
52 |
|
71 |
|
13 |
% |
–17 |
% |
C1 Cash Cost1 |
$/lb |
0.84 |
|
0.70 |
|
20 |
% |
|
0.82 |
|
1.01 |
|
0.91 |
|
–19 |
% |
–10 |
% |
AISC1 |
$/lb |
1.03 |
|
0.90 |
|
14 |
% |
|
1.00 |
|
1.25 |
|
1.11 |
|
–20 |
% |
–10 |
% |
FINANCE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues, net |
$ |
89,440 |
|
102,937 |
|
–13 |
% |
|
24,040 |
|
16,030 |
|
37,284 |
|
50 |
% |
–36 |
% |
Mine operating expenses |
|
53,288 |
|
50,233 |
|
6 |
% |
|
16,036 |
|
11,425 |
|
19,287 |
|
40 |
% |
–17 |
% |
Adjusted EBITDA1 |
|
36,152 |
|
52,704 |
|
–31 |
% |
|
8,004 |
|
4,605 |
|
17,997 |
|
74 |
% |
–56 |
% |
Other expenses
(income) and impairment |
|
2,182 |
|
91,262 |
|
–98 |
% |
|
1,943 |
|
(3,269 |
) |
82,449 |
|
159 |
% |
–98 |
% |
EBITDA1 |
|
33,970 |
|
(38,558 |
) |
188 |
% |
|
6,061 |
|
7,874 |
|
(64,452 |
) |
–23 |
% |
109 |
% |
Depreciation,
depletion & amortization |
|
24,502 |
|
17,991 |
|
36 |
% |
|
6,607 |
|
5,995 |
|
9,432 |
|
10 |
% |
–30 |
% |
EBIT1 |
$ |
9,468 |
|
(56,549 |
) |
117 |
% |
|
(546 |
) |
1,879 |
|
(73,884 |
) |
–129 |
% |
99 |
% |
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 Q4 2019 was 20.9
million pounds, 18% lower than during the corresponding quarter in
2018 due to a 32% decrease in ore feed grade offset by 22% increase
in milled tonnes. Payable zinc production for Q4 2019 represents a
3% improvement from the previous quarter as grades improved during
the fourth quarter, in line with expectations and guidance. Ore
blending efforts to optimize grade and ore type continue to have
success, improving the process plant stability and increasing ore
processing rates. 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 reduced by $0.09 per
pound and $0.11 per pound, respectively, when compared to the
corresponding quarter in 2018 due primarily to an 82% increase in
by-product sales. As well, the decrease in operating costs and
sustaining capital was partially offset by an 18% decrease in zinc
payable production and by the significant increase to industry
benchmark zinc concentrate smelting and refining charges. C1 Cash
Cost1 and AISC1 decreased quarter-over-quarter primarily due to
increased by-product revenues with the second lead shipment of 2019
as scheduled and a 15% decrease in sustaining capital
expenditures.
2019 production guidance was exceeded and AISC1
guidance achieved. The zinc concentrate filter press was
commissioned two weeks earlier than planned in mid-December and is
expected to reduce zinc concentrate moisture content, re-handling
costs and variability as well as improved metal accounting accuracy
due to lower concentrate levels.
1 See "Use of Non-IFRS Financial Performance
Measures".
CARIBOU MINE, CANADA
|
|
2019 |
2018 |
YoY |
|
Q4’19 |
Q3’19 |
Q4’18 |
Q4'19 vs Q3'19 |
Q4'19 vs Q4'18 |
Production |
|
|
|
|
|
|
|
|
|
|
Ore mined |
t |
909,298 |
|
887,141 |
|
2 |
% |
|
239,113 |
|
244,707 |
|
184,635 |
|
–2 |
% |
30 |
% |
Ore
milled |
t |
913,178 |
|
884,529 |
|
3 |
% |
|
232,055 |
|
248,710 |
|
174,180 |
|
–7 |
% |
33 |
% |
Zinc head grade |
|
5.7 |
% |
5.9 |
% |
–3 |
% |
|
5.6 |
% |
5.6 |
% |
6.0 |
% |
0 |
% |
–7 |
% |
Lead head grade |
|
2.3 |
% |
2.3 |
% |
0 |
% |
|
2.0 |
% |
2.3 |
% |
2.3 |
% |
–13 |
% |
–13 |
% |
Silver head grade |
oz/t |
2.1 |
|
2.0 |
|
5 |
% |
|
1.7 |
|
2.1 |
|
1.9 |
|
–19 |
% |
–11 |
% |
Zinc recovery |
|
79.1 |
% |
75.6 |
% |
5 |
% |
|
80.1 |
% |
79.5 |
% |
72.9 |
% |
1 |
% |
10 |
% |
Lead recovery |
|
63.6 |
% |
61.8 |
% |
3 |
% |
|
62.7 |
% |
63.9 |
% |
67.6 |
% |
–2 |
% |
–7 |
% |
Silver recovery |
|
37.6 |
% |
36.4 |
% |
3 |
% |
|
35.1 |
% |
37.8 |
% |
38.2 |
% |
–7 |
% |
–8 |
% |
Zinc concentrate grade |
|
47.0 |
% |
46.9 |
% |
0 |
% |
|
46.7 |
% |
47.7 |
% |
44.9 |
% |
–2 |
% |
4 |
% |
Lead concentrate grade |
|
38.7 |
% |
38.8 |
% |
0 |
% |
|
38.1 |
% |
38.6 |
% |
39.3 |
% |
–1 |
% |
–3 |
% |
Zinc payable |
Mlbs |
75.0 |
|
72.0 |
|
4 |
% |
|
18.9 |
|
20.3 |
|
13.7 |
|
–7 |
% |
38 |
% |
Lead payable |
Mlbs |
26.7 |
|
25.3 |
|
6 |
% |
|
5.9 |
|
7.5 |
|
5.5 |
|
–21 |
% |
7 |
% |
Silver payable |
Moz |
0.7 |
|
0.7 |
|
0 |
% |
|
– |
|
0.2 |
|
0.1 |
|
–100 |
% |
–100 |
% |
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zinc payable |
Mlbs |
73.9 |
|
72.9 |
|
1 |
% |
|
18.1 |
|
20.5 |
|
15.0 |
|
–12 |
% |
21 |
% |
Lead payable |
Mlbs |
26.7 |
|
24.4 |
|
9 |
% |
|
6.1 |
|
7.8 |
|
4.6 |
|
–22 |
% |
33 |
% |
Silver
payable |
Moz |
0.7 |
|
0.7 |
|
0 |
% |
|
– |
|
0.2 |
|
0.1 |
|
–100 |
% |
–100 |
% |
Operating Cost1 |
$/t |
73 |
|
68 |
|
7 |
% |
|
71 |
|
66 |
|
90 |
|
8 |
% |
–21 |
% |
C1 Cash Cost1 |
$/lb |
1.03 |
|
0.85 |
|
21 |
% |
|
1.05 |
|
0.93 |
|
1.28 |
|
13 |
% |
–18 |
% |
AISC1 |
$/lb |
1.17 |
|
1.14 |
|
3 |
% |
|
1.24 |
|
1.05 |
|
1.93 |
|
18 |
% |
–36 |
% |
FINANCE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues, net |
$ |
75,219 |
|
97,384 |
|
–23 |
% |
|
17,084 |
|
19,235 |
|
16,527 |
|
–11 |
% |
3 |
% |
Mine operating expenses |
|
68,520 |
|
60,802 |
|
13 |
% |
|
16,541 |
|
17,917 |
|
15,084 |
|
–8 |
% |
10 |
% |
Adjusted EBITDA1 |
|
6,699 |
|
36,582 |
|
–82 |
% |
|
543 |
|
1,318 |
|
1,443 |
|
–59 |
% |
–62 |
% |
Other
expenses and impairment |
|
5,325 |
|
80,906 |
|
–93 |
% |
|
1,308 |
|
2,113 |
|
66,808 |
|
–38 |
% |
–98 |
% |
EBITDA1 |
|
1,374 |
|
(44,324 |
) |
103 |
% |
|
(765 |
) |
(795 |
) |
(65,365 |
) |
4 |
% |
99 |
% |
Depreciation,
depletion & amortization |
|
12,940 |
|
10,751 |
|
20 |
% |
|
478 |
|
4,683 |
|
2,319 |
|
–90 |
% |
–79 |
% |
EBIT1 |
$ |
(11,566 |
) |
(55,075 |
) |
79 |
% |
|
(1,243 |
) |
(5,478 |
) |
(67,684 |
) |
77 |
% |
98 |
% |
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 Q4 2019 was 18.9
million pounds, 38% higher than the corresponding quarter in 2018
due to increased ore mined from production stopes, and 7% lower
than Q3 after milling fewer tonnes. Milled tonnes were higher
compared to Q4 2018 as a result of increased ore mined for the same
period. Mill performance continues to exceed expectations with
strong metallurgical recoveries and throughput rates.
C1 Cash Cost1 and AISC1 were higher
quarter-over-quarter due to lower zinc payable production and
higher sustaining capital expenditures due to an increase in
development meters. C1 Cash Cost1 and AISC1 have decreased when
compared to the corresponding quarter in 2018, reflecting increases
in zinc payable production and cost reduction initiatives such as
mining contractor services being insourced and decreased sustaining
capital expenditures. These reductions were partially offset by
significant increases to industry benchmark zinc concentrate
smelting and refining charges.
2019 production and cost guidance were achieved.
Mill throughput rates and recoveries remained strong. The improved
ore production compared to Q4 2018 is based on the improved ground
control and mining sequence. The first ore tonnes were extracted
from Zone 6 in late Q4 as an additional ore source. Record mine
rehabilitation for secondary support was achieved in Q4 2019 along
with higher than normal development meters.
1 See "Use of Non-IFRS Financial Performance
Measures".
SANTANDER MINE, PERU
|
|
2019 |
2018 |
YoY |
|
Q4’19 |
Q3’19 |
Q4’18 |
Q4'19 vs Q3'19 |
Q4'19 vs Q4'18 |
Production |
|
|
|
|
|
|
|
|
|
|
Ore mined |
t |
775,088 |
|
750,970 |
|
3 |
% |
|
173,926 |
|
205,881 |
|
218,580 |
|
–16 |
% |
–20 |
% |
Ore
milled |
t |
875,680 |
|
803,265 |
|
9 |
% |
|
219,075 |
|
218,898 |
|
228,454 |
|
0 |
% |
–4 |
% |
Zinc head grade |
|
5.0 |
% |
4.3 |
% |
16 |
% |
|
5.3 |
% |
5.1 |
% |
4.3 |
% |
4 |
% |
19 |
% |
Lead head grade |
|
0.8 |
% |
0.6 |
% |
33 |
% |
|
0.7 |
% |
0.8 |
% |
0.7 |
% |
–13 |
% |
0 |
% |
Silver
head grade |
oz/t |
1.2 |
|
0.9 |
|
33 |
% |
|
1.1 |
|
1.1 |
|
1.1 |
|
0 |
% |
0 |
% |
Zinc recovery |
|
87.7 |
% |
89.3 |
% |
–2 |
% |
|
88.3 |
% |
87.5 |
% |
89.2 |
% |
1 |
% |
–1 |
% |
Lead recovery |
|
83.0 |
% |
80.0 |
% |
4 |
% |
|
83.7 |
% |
83.6 |
% |
80.4 |
% |
0 |
% |
4 |
% |
Silver
recovery |
|
62.1 |
% |
61.3 |
% |
1 |
% |
|
62.0 |
% |
60.9 |
% |
61.9 |
% |
2 |
% |
0 |
% |
Zinc concentrate grade |
|
46.8 |
% |
47.7 |
% |
–2 |
% |
|
46.5 |
% |
46.1 |
% |
47.9 |
% |
1 |
% |
–3 |
% |
Lead concentrate grade |
|
49.9 |
% |
50.0 |
% |
0 |
% |
|
49.0 |
% |
49.2 |
% |
51.4 |
% |
0 |
% |
–5 |
% |
Zinc payable |
Mlbs |
70.6 |
|
56.8 |
|
24 |
% |
|
18.8 |
|
17.9 |
|
16.0 |
|
5 |
% |
18 |
% |
Lead payable |
Mlbs |
11.5 |
|
7.9 |
|
46 |
% |
|
2.6 |
|
2.8 |
|
2.7 |
|
–7 |
% |
–4 |
% |
Silver
payable |
Moz |
0.6 |
|
0.5 |
|
20 |
% |
|
0.2 |
|
0.1 |
|
0.2 |
|
100 |
% |
0 |
% |
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zinc payable |
Mlbs |
69.2 |
|
56.5 |
|
22 |
% |
|
18.3 |
|
17.9 |
|
17.3 |
|
2 |
% |
6 |
% |
Lead payable |
Mlbs |
11.5 |
|
7.8 |
|
47 |
% |
|
2.7 |
|
2.9 |
|
2.8 |
|
–7 |
% |
–4 |
% |
Silver
payable |
Moz |
0.6 |
|
0.5 |
|
20 |
% |
|
0.2 |
|
0.1 |
|
0.2 |
|
100 |
% |
0 |
% |
Operating Cost1 |
$/t |
45 |
|
43 |
|
5 |
% |
|
50 |
|
45 |
|
33 |
|
11 |
% |
52 |
% |
C1 Cash Cost1 |
$/lb |
0.76 |
|
0.72 |
|
6 |
% |
|
0.79 |
|
0.71 |
|
0.59 |
|
11 |
% |
34 |
% |
AISC1 |
$/lb |
0.99 |
|
0.99 |
|
0 |
% |
|
1.10 |
|
0.92 |
|
0.63 |
|
20 |
% |
75 |
% |
FINANCE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues, net |
$ |
69,471 |
|
70,687 |
|
–2 |
% |
|
16,977 |
|
17,009 |
|
19,666 |
|
0 |
% |
–14 |
% |
Mine operating expenses |
|
43,766 |
|
37,863 |
|
16 |
% |
|
12,581 |
|
11,265 |
|
9,070 |
|
12 |
% |
39 |
% |
Adjusted EBITDA1 |
|
25,705 |
|
32,824 |
|
–22 |
% |
|
4,396 |
|
5,744 |
|
10,596 |
|
–23 |
% |
–59 |
% |
Other
expense (income) and impairment |
|
1,301 |
|
94,277 |
|
–99 |
% |
|
626 |
|
1,021 |
|
87,588 |
|
–39 |
% |
–99 |
% |
EBITDA1 |
|
24,404 |
|
(61,453 |
) |
140 |
% |
|
3,770 |
|
4,723 |
|
(76,992 |
) |
–20 |
% |
105 |
% |
Depreciation, depletion & amortization |
|
10,738 |
|
10,916 |
|
–2 |
% |
|
2,844 |
|
1,674 |
|
1,224 |
|
70 |
% |
132 |
% |
EBIT1 |
$ |
13,666 |
|
(72,369 |
) |
119 |
% |
|
926 |
|
3,049 |
|
(78,216 |
) |
–70 |
% |
101 |
% |
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 Q4 2019 was 18.8
million pounds, an 18% improvement over the corresponding quarter
in 2018 as higher grades were processed and consistent with the
previous quarter. During Q4 2019, Santander achieved better zinc
recoveries than the previous quarter as a direct result of
improvements implemented in the cyclones and zinc flotation circuit
combined with improved blending of the plant feed which in turn led
to improved zinc concentrate grades. Further, plant reliability has
been improved with the implementation of a more disciplined
maintenance program. A new tertiary crusher was commissioned during
the quarter contributing to more than 0.5% increased recoveries.
The primary crusher was also replaced during the January 2020
maintenance shutdown. These improvements to the crushing circuit
will improve comminution and ensure metallurgical recoveries and
concentrate grades are aligned to the 2020 targets.
C1 Cash Cost1 and AISC1 increased compared to
the corresponding quarter in 2018 primarily due to the higher
benchmark zinc concentrate smelting and refining charges, offset by
increased by-product revenues resulting from higher silver prices.
The quarter-over-quarter increase in C1 Cash Cost1 reflects
scheduled maintenance costs for the mill, implementation of
improvements in the grinding and flotation circuits to improve
recoveries and concentrate grades discussed above. AISC1 costs for
Q4 increased due to higher sustaining capital expenditures.
2019 production guidance was exceeded while C1
Cash Cost1 guidance was achieved and AISC1 guidance was below the
low end of guidance despite higher than expected smelting and
refining charges. Head grades improved as well due to higher mill
reliability with the trend of improved concentrate grades and
recoveries continuing during Q4.
1 See "Use of Non-IFRS Financial Performance
Measures".
GROWTH PROJECTS AND STUDIES
The current anticipated milestones for 2020
through 2021 for some of the Company's numerous projects are
outlined below:
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/48916414-3291-4417-b652-69f76a0662d1
Growth projects and anticipated
milestones for 2019 through 2021
Caribou: Sublevel Stoping and Sill
Pillar Mining
During Q4 2019, trial mining of a historical
mining zone was successful, allowing for inclusion of additional
ore tonnes not previously in the mine plan. Trial mining of
sublevel stoping in the East has also been identified as the
location where the new top-down method will be trialed in H1 2020,
informed by flowability of ore in the historical zone. Mining of
sill pillars is currently still being evaluated through numerical
modeling which is expected to be completed in Q1 2020.
Caribou: Bathurst Life of Mine
Review
In Q3 2019, a study began on Restigouche
considering it as a supplemental ore source for the Caribou mill.
Initial results show that other satellite deposits owned by Trevali
with higher grade and more tonnes may be better suited to feed the
Caribou mill in the near term. The study was expanded to include
Halfmile as potential ore feed to the Caribou mill. The study is
estimated to be completed in Q4 2020.
Rosh Pinah: Filtration and Grinding
Project
The filtration and grinding upgrade project was
completed during Q4 2019 on schedule and on budget. Ramp-up is
advancing and the benefits of the project are 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 Q4 2019 and Trevali plans on publishing a pre-feasibility
study during Q2 2020 to support the initial long lead procurement
investment decision. This will be followed by the feasibility study
in Q4 2020. The feasibility study will be used to support the full
execution funding decision.
Santander: Santander Pipe
Drilling continued during Q4 2019 targeting an
increase in inferred mineral resources and converting additional
inferred mineral resources to an indicated mineral resource level.
Three drills were actively drilling the pipe as of the end of Q4
2019. An internal preliminary economic assessment is expected to be
completed by the end of Q4 2020 which will evaluate the economic
viability of incorporating the Santander Pipe ore into the existing
operation.
EXPLORATION AND DEVELOPMENT
The primary goal of Trevali’s 2019 exploration
program was 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 in 2019 which included 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 positive results to date, the
budget was increased in Q4 to cover further drilling programs at
all operations which included 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 Mineral Inferred resources at
the Santander Pipe at depth.
Exploration expenditures for 2019 amounted to
$10.4 million. A total of approximately 41,000 meters of
exploration drilling was completed during the year. Given the
recent exploration successes, the 2020 exploration budget has been
increased to $12.0 million and 53,000 drill meters which represents
a 43% growth over the 2019 original budget of $8.4 million and an
increase of 15% over the 2019 final exploration expenditures of
$10.4 million. Additional funds could be allocated to exploration
in 2020 contingent on positive exploration results.
The 2020 exploration program will continue to
focus on advancing near-mine exploration targets towards the
development of new mineral resources located within trucking
distance of existing mines, while also maintaining a necessary
level of expenditures on regional programs to make new discoveries.
Updated Mineral Resource statements are expected to be released at
the end of Q1 2020.
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 further test the
newly discovered T3 horizon during the second half of 2019. 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 A. 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.
A news release was published on December 2, 2019
presenting the latest drill results of the T3 and hanging wall
underground drilling program.
During Q4, an additional 3 underground holes
were drilled to follow up on the T3 discovery, holes PUX022 to
PUX024. Hole PUX024 intersected the T3 horizon approximately 50
metres along strike from hole PUX021, a zone of semi-massive to
massive mineralization was intersected between 453.0 to 455.9
metres. The hole was continued and intersected another zone of
mineralization approximately 120 metres deeper, between 549.5 to
563.3 metres. The zone is characterized by sphalerite rich massive
sulphide mineralization and although at an early stage, this second
mineralized horizon has been intersected by two holes as
illustrated in Figure A.
Exploration of the T3 area was slow in the last
months of 2019 due to increasingly difficult access from
underground developments and poor drilling angles. To improve
drilling performances, a decision was made to develop a new
exploration drive which will improve drilling position as
illustrated in Figure B. Initial planning of 4 holes has been
designed from the new exploration drive to test the northern
extension of the T3 horizon.
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/dc3c936a-9b0b-490b-9861-da12fa8ee598
https://www.globenewswire.com/NewsRoom/AttachmentNg/dcb8c265-6549-4b2e-b881-affaa19f5747
Regional exploration programs were scheduled to
resume in Q4 following the cessation of the rainy season, but due
to the current security situation in Burkina Faso, only limited
exploration resumed, mostly mapping, soil geochemistry and ground
Fluxgate EM surveys.
A total of 12,750 metres of exploration drilling
was accomplished at Perkoa from both underground and surface
drilling in 2019 targeting regional anomalies and the T3 area.
Rosh Pinah Exploration,
Namibia
Late in Q3 2019, surface exploration drilling
began targeting the Northern extension of the Western Orefield,
with an initial program of 1,600 metres completed in that quarter.
Following the success in extending the WF3 mineralization towards
the North, an additional 2,910 metres of drilling was completed on
this underexplored area of Rosh Pinah in Q4, targeting new inferred
mineral resources by extending the known mineralization to the
North. A total of 9 holes were drilled on the Northern Western
Orefield area.
Drilling from underground continued during Q4
2019 at the Western Orefield and the AAB orebody targeting areas at
depth for mineral resource conversion. This mineral resource
conversion program will also be included in the updated year-end
Mineral Resource disclosure.
Surface EM surveys which started in the second
quarter continued in the fourth quarter 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 drill tested in 2020.
A total of 10,760m of exploration drilling was
accomplished at Rosh Pinah from both underground and surface
drilling in 2019, targeting the Western Orefield at depth and the
northern extension along strike as well as the AAB orebody at
depth.
Santander Exploration, Peru
Exploration continued at Santander during the
fourth quarter with surface EM surveys, Magneto-Telluric (“MT”)
surveys and drilling at Magistral, the Santander Pipe and Blanquita
with both surface and underground drill rigs.
At the Santander Pipe, where an indicated
mineral resource is defined, mineral resource expansion drilling
which began in Q3 continued in Q4. The program is designed to 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 Mineral Inferred Resources and converting
additional Mineral Resources to an Indicated Mineral Resource level
in support of the ongoing evaluation of the deposit’s potential to
contribute to production in future years.
At Magistral, an underground exploration drill
program was initiated in September to test the southern extension
of the Magistral South deposit continued in the fourth quarter. A
total of 6 holes were drilled on the Magistral South area in 2019
and the program was successful in extending the mineralization at
depth and along strike as illustrated in Figure C.
One hole was also drilled at depth at Blanquita
which is located South along strike from Magistral and was also
successful in intersecting narrow mineralization. As illustrated in
Figure C, the Blanquita area is under explored at depth and is
highly prospective being located in between the Magistral and
Santander Pipe deposits.
A magneto-telluric survey was initiated in early
September with the goal of probing the deeper exploration potential
(approximately 500 metres – 2 kilometres) of the property for
possible porphyry and skarn type mineralization. The survey was
completed in Q4 2019 with data processing beginning in Q1 2020. A
helicopter supported magnetic survey scheduled to begin in October,
but the survey has been postponed to the first half of 2020. Data
from both the MT and magnetic surveys will be used for target
generation.
A total of 13,650 metres of drilling was
accomplished at Santander from both underground and surface
drilling in 2019.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/49300534-7b38-4afd-a192-f5d012a6b523
Caribou Mine Exploration,
Canada
The surface Mineral Resource conversion drilling
program which began in Q3 at Caribou to test the Northern Extension
of the Caribou North Limb below the current development was
completed in Q4. A total of 6 holes amounting to 3,815 metres were
drilled for the program with assays disclosed in a January 6, 2020
news release.
The aim of the program along the Northern limb
was to target a Mineral Resource upgrade from Inferred to Indicated
further North and at depth below 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.
At Murray Brook South, a Time-Domain
Electro-Magnetic (“TDEM”) survey was completed over portions of the
Murray Brook South claim in order to refine targets for drill
testing scheduled to begin in Q1 2020. Trenching performed in 2018
as part of a joint venture agreement between Puma Exploration and
Trevali discovered a narrow gossan within the Mount Brittain
formation, which hosts the Murray Brook deposit located 1.5
kilometres to the north-east. A drilling program is currently
underway to test the Murray Brook South anomalies.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/724f819e-8811-4d00-94a6-2be6e5ecd6b1
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
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