VANCOUVER,
BC, Jan. 15, 2021 /CNW/
- Trevali Mining Corporation ("Trevali" or the
"Company") (TSX: TV) (BVL: TV) (OTCQX: TREVF) (Frankfurt: 4TI) today announced
the planned restart of operations at its Caribou mine near
Bathurst, New Brunswick. The mine
has been on a care and maintenance program since March 2020.
With the implementation of several operational
and commercial enhancements, as well as improved zinc market
conditions, the Company expects to return to mining in early
February 2021, with first payable
zinc production expected by the end of March
2021.
Ricus Grimbeek, Trevali's President and CEO
stated, "Our team has worked diligently to reduce the overall cost
structure of the Caribou mine, and I am pleased that we are in a
position to restart mine operations in a manner that we expect will
generate positive cash flow. Our initial two-year plan includes
several enhancements which are designed to improve the mine's
economics, including the involvement of a contracted mining
operator and the entry into fixed-pricing arrangements for a
significant portion of the mine's forecasted production. We have
benefited from the engagement of the provincial government, and
with the recall of employees and the restart of production we look
forward to being a more significant part of the New Brunswick economy. Looking ahead, we will
continue to study the potential to extend our initial mine plan, as
well as explore further potential in the Bathurst mining camp."
Enhanced Caribou Mine Economics
Trevali's production plan at Caribou is anchored
on operational and commercial enhancements that improve the mine's
fundamental economics and support enhanced value for Trevali
shareholders:
- Improved cost performance and mining efficiency –
Following ramp-up in 2021, the All-in Sustaining Cost
("AISC")1 for Caribou is forecast to be between
$0.84 – $0.90 per pound of zinc in 2022, well under the
overall $0.90 per pound of zinc
target in Trevali's T90 business improvement program. This cost
performance will be supported by a partnership with Redpath Mining
Inc. as underground mining contractor at Caribou. Redpath is a
leading global mining service provider with the operational
experience to safely and efficiently mine Caribou's narrow
mineralization. Redpath is able to mobilize people and equipment
quickly, and combined with Trevali's management team, will support
a timely ramp-up of efficient mining activities.
- Enhanced revenue certainty from hedged production –
Trevali has reduced its exposure to commodity price fluctuations by
entering into 21-month fixed pricing arrangements for a significant
portion of the forecasted zinc production from the mine. Pursuant
to existing offtake agreements, an affiliate of Glencore plc has
agreed to purchase 115 million pounds of payable zinc, which
represents approximately 80% of the forecasted zinc production from
Caribou, at an average price of $1.25
per pound. These agreements are for the period from March 2021 to December
2022 and are in addition to Trevali's existing hedging
program which covers the period from October
2020 to December 2021. The
Company is also looking to enter into fixed-pricing arrangements
for both lead and silver at meaningful levels of forecasted
production from Caribou.
- Future value potential – During the initial 21-month
operating period, Trevali will continue to study metallurgical and
operational opportunities to extend the current two-year mine plan,
as well as other longer-term value enhancing initiatives in the
Bathurst mining camp.
Caribou Production and Cost Guidance
Production guidance for 2021 is estimated at
between 60 – 65 million pounds of payable zinc, 21 – 23 million
pounds of payable lead and 585 – 650 thousand ounces of payable
silver. First payable zinc production is expected by the end of
March 2021. Zinc payable production
is expected to increase to 72 – 77 million pounds of payable zinc
in 2022 as the mine receives the benefit of a full year of
production.
Cost guidance for 2021 for C1 Cash
Cost1 is estimated between $0.79 – $0.84 per
pound of zinc and AISC1 is expected to range
between $0.91 – $0.97 per pound of zinc. Capital expenditures are
forecast at $9 million for 2021 and
$2 million for 2022. In the event the mine plan is extended
beyond the initial two-year period, further sustaining capital
investment will be required.
Table 1: Caribou Production and Costs
Guidance
|
Units
|
FY
2021
|
FY
2022
|
Payable
Production
|
Zinc
|
Mlbs
|
60 – 65
|
72 – 77
|
Lead
|
Mlbs
|
21 – 23
|
23 – 25
|
Silver
|
Koz's
|
585 – 650
|
575 – 635
|
Cost
|
C1 Cash
Cost1
|
$/lb
|
0.79 –
0.84
|
0.83 –
0.89
|
AISC1
|
$/lb
|
0.91 –
0.97
|
0.84 –
0.90
|
Restart
costs
|
$m
|
7
|
–
|
Sustaining
Capital
|
$m
|
9
|
2
|
|
(1) See
"Non-IFRS Financial Performance Measures".
|
The investment to restart the operation for the
period January to February 2021 is
estimated to be approximately $7
million and consists of both capital and operating costs
which are excluded from our C1 cash cost1 and
AISC1.
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.
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. 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. 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 resumption of operations at Caribou, including the anticipated
costs associated therewith and the dates upon which the Company
begins to expect resuming mining and production at Caribou, the
Company's expectations with respect to the economics of Caribou
after the re-start, including the Company's forecasted AISC, C1
Cash Cost, sustaining cost and production for fiscal year 2021 and
2022, the Company's ability to generate positive cash flow from the
operation of Caribou, the benefits the Company expects from its
fixed price offtake agreements and hedging program and the
efficiencies the Company expects from its partnership with Redpath
Mining Inc.,the Company's operations, , the Company's growth
strategies and planned development activities, anticipated effects
of commodity prices on revenues, the timing and amount of estimated
future production, hedging activities, success of mining
operations, environmental risks, and the impact on the Company's
operations of current and future actions taken by governmental
authorities, counterparties and others to the COVID-19 pandemic,.
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
the resumption of operations at Caribou, including that the Company
may not be able to restart Caribou on the expected timeline and at
the expected costs, or at all; that the economics of Caribou after
restart may not accord with the Company's forecasts, including that
the Company's cost and production guidance may not accurately
estimate actual post-restart costs and production at Caribou; that
the Company's fixed price offtake agreements may not be economic;
that the Company may not realize the benefits that it expects from
its partnership with Redpath Mining Inc.; 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.
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, 2020.
SOURCE Trevali Mining Corp.