Trevali Announces Temporary Suspension of Caribou Mine Operations
March 26 2020 - 5:00AM
Trevali Mining Corporation (“Trevali” or the “Company”)
(TSX: TV, BVL: TV; OTCQX: TREVF, Frankfurt: 4TI) today
announced the temporary suspension of operating activities at its
Caribou mine near Bathurst, New Brunswick.
The global zinc market has deteriorated,
and this has been exacerbated by the continued challenges presented
by COVID-19. These market conditions, combined with high
concentrate treatment charges, make mine operations at Caribou
uneconomic at this time. The mine will be put on a care and
maintenance program immediately to preserve the value of the
mineral resource and mine assets. No timeline for a potential
restart of operations has been defined. Trevali’s operations centre
in Bathurst, which serves the Company’s global mine portfolio, will
continue to operate.
Ricus Grimbeek, Trevali’s President and CEO
stated, “This is a difficult but necessary decision given the
market and operating circumstances. We have a capable and engaged
team at Caribou, and in the last 12 months we have made incremental
improvements to increase production and reduce the cost structure.
During the past year we demonstrated that the Caribou mill can
achieve higher throughput than nameplate capacity while at the same
time increasing metallurgical recoveries leading to higher
production, however the significant recent drop in the zinc price
limits our ability to generate positive cash flow. This
decision is no reflection on the quality of our team or the
operating conditions in New Brunswick, and while the operation is
paused, we will study a multitude of options in the Bathurst region
to maximize value and reduce the overall cost structure of Caribou.
This includes the potential to supplement the Caribou mine ore feed
from ore deposits within trucking distance of the Caribou mill,
metallurgical opportunities which may lead to commercial benefits
around copper and gold, and potential for joint ventures with third
parties.”
Added Mr. Grimbeek: “This was not a decision
made lightly and we are sensitive to the impact this will have on
the community and on our team. We will be providing transition
assistance to our workforce in addition to severance. I thank the
entire Caribou team for their efforts to enhance the competitive
position of the mine.”
One-time costs to place the mine on care and
maintenance over the course of April and May are estimated to total
approximately US$5 million with the ongoing costs expected to be
approximately US$0.5 million per month on a cash basis to ensure
that the mine, mill, and associated infrastructure are safe and
secure, and positioned to restart efficiently when conditions might
allow. The Company will be examining the carrying value of Caribou
and will provide an update as part of its Q1 2020 financial and
operating results.
OUTLOOK UPDATE
Trevali is withdrawing its current 2020 guidance
due to the suspension of operations at Caribou as well as the
resulting uncertainty caused by COVID-19. Trevali is currently
implementing proactive and reactive mitigation measures to minimize
any potential impacts COVID-19 may have on our people, communities,
operations, supply chain, and finances. This also includes
preserving capital and deferring capital programs where
appropriate. The Company expects to provide an update on its future
outlook in due course.
Aligned with the strategy of preserving capital,
Trevali also announced that it has cancelled the Normal Course
Issuer Bid ("NCIB") commenced December 2, 2019, as the Company no
longer intends to repurchase its common shares. No common shares
were purchased by the company under the renewed NCIB, though under
the original NCIB in place from November 19, 2018 to November 18,
2019, a total of 28.6 million common shares were repurchased for
cancellation.
ABOUT TREVALI
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.
Investor and Media Relations Contact:
Brendan Creaney – Vice President, Investor RelationsEmail:
bcreaney@trevali.comPhone: +1 (778) 655-6070
Cautionary Note Regarding
Forward-Looking Information and Statements
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 operations, including the suspension
of operations at Caribou and the anticipated costs associated
therewith, the impact on the Company’s operations of current and
future actions taken by governmental authorities, counterparties
and others to the COVID-19 pandemic, the Company’s growth
strategies and planned development activities. 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 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
decrees and regulations, including any new or ongoing decrees and
regulations issued by a governmental authority in response to the
COVID-19 pandemic; 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 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.
Source: Trevali Mining Corporation
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