VANCOUVER, BC, Jan. 18, 2021 /CNW/ - Trevali Mining
Corporation ("Trevali" or the "Company") (TSX: TV) (BVL: TV)
(OTCQX: TREVF) (Frankfurt:
4TI) is pleased to release preliminary fourth quarter
("Q4") and full year production results for 2020 and provide 2021
operating, capital and exploration expenditure guidance. All
financial figures are in U.S. dollars.
Ricus Grimbeek, Trevali's President and CEO stated, "The company
ended 2020 on solid footing and is well-positioned to take full
advantage of the significant opportunities provided by the positive
momentum in the zinc market. Despite the multitude of challenges
throughout the year, we successfully modified plans and accelerated
the T90 program to reduce our all-in-sustaining cost per pound of
zinc by a full year ahead of the initial schedule. We are on the
precipice of accomplishing our goal and are very pleased with our
operational results having safely achieved our production guidance
by producing 313 million payable pounds of zinc in 2020. We also
completed an equity raise which was upsized and over-allotted for
$26.6 million that strengthened our
balance sheet. We've earmarked some of the proceeds from the raise
to restart the Caribou operation, progress exploration, and
development opportunities, and pay down debt.
We are excited about the year ahead. Production is forecast at
330 – 360 million pounds of zinc from our four operations that will
generate meaningful cash flow at current zinc prices. This expected
organic cash flow will considerably strengthen our balance sheet,
giving us the opportunity to further pay down debt, and creates
additional flexibility for the funding of future opportunities
including the RP2.0 Expansion Project
at Rosh Pinah. We continue to be on track to deliver the
Feasibility study in the second half of the year."
Key 2020 Highlights Include:
- Improved safety performance with a 30% reduction to the
Total Recordable Injury Frequency for 2020 when compared to
2019.
- Achieved 2020 production guidance by producing 313
million payable pounds of zinc.
- Lead production exceeded 2020 guidance and silver production
achieved guidance with 30 million payable pounds of lead and
752 thousand payable ounces of silver produced in 2020.
- Accelerated the T90 Business Improvement Program by a full
year aimed at realizing $50
million in annual sustainable efficiencies and reducing
All-In Sustaining Cost1 ("AISC") to $0.90 per pound of zinc by the beginning of
2021.
- Published Trevali's second annual Sustainability Report
setting targets to reduce water consumption and greenhouse gas
emissions.
- Amended the existing credit facility and put
in place a secure loan facility with
Glencore.
- Published the Pre-Feasibility Study for the RP2.0 Expansion Project with the Feasibility
Study expected in the second half of 2021.
- Completed an equity raise of $26.6
million (C$34.5 million) to
pursue growth activities including advancing the RP2.0 expansion project, the restart of the
Caribou operation, additional exploration work as well as repaying
debt.
- Implemented a hedging program covering approximately
40% of forecasted payable zinc production in 2021 or 148Mlbs
through a combination of forward swaps, fixed pricing arrangements
and put options. The price of an additional 63.5Mlbs of payable
zinc has also been hedged in 2022 through fixed pricing
arrangements.
Q4 2020 and Full Year 2020 Preliminary Production Results
& 2021 Production Guidance
Total zinc production from operations was 74 million pounds for
Q4 2020 for total annual production of 313 million pounds,
achieving the Company's annual guidance of between 312 to 327
million pounds of zinc production. Lead production exceeded the top
end of production guidance at 30 million pounds and silver
production achieved guidance at 752 thousand ounces.
Consolidated production guidance for 2021 is estimated between
330 – 360 million pounds of payable zinc, 45 – 50 million pounds of
payable lead and 925 – 1,025 thousand ounces of payable silver.
Zinc production is expected to be moderately higher in the second
half of the year. The operational restart of Caribou is planned to
begin in the first quarter with first production expected in March,
and shortly thereafter, to ramp up to a steady state, while Rosh
Pinah is expected to have moderately higher production rates in the
second half of the year due to mine scheduling. This additional
production in the second half of 2021 will be partially offset by
production at Santander which is expected to have lower production
levels by year end.
Perkoa Mine, Burkina
Faso
Perkoa delivered annual production of 150 million pounds of
zinc, slightly below the annual guidance of 152 – 157 million
pounds. In 2021 zinc payable production is expected to be between
150 – 165 million pounds as higher mill throughput rates are
expected to be achieved while the zinc grade is anticipated to
remain consistent with 2020.
Rosh Pinah Mine, Namibia
Rosh Pinah produced 86 million pounds of payable zinc, meeting
its annual guidance for zinc while also achieving the higher end of
guidance for lead at 18 million pounds and exceeding the range for
silver having produced 225 thousand ounces. In 2021, zinc payable
production is expected to reduce to 70 – 75 million pounds of zinc
as a result of expected lower head grades, however, lead production
is expected to increase as the planned mine sequencing moves to
higher lead grade areas.
Caribou Mine, Canada
The Company recently announced the restart of the Caribou mine
from its current care and maintenance status with an initial
two-year mine plan. Several operational and commercial enhancements
are expected to be implemented throughout 2021. Mining and milling
activities are planned to resume in Q1 2021 with first payable zinc
production expected in the same quarter and full year production
forecast to be between 50 – 55 million pounds while producing
meaningful levels of lead and silver by-products. 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.
Santander Mine, Peru
Santander produced 62 million pounds of zinc despite being
negatively impacted by the suspension of operations due to
COVID-19. After the halting of underground development in the
second half of 2020 to focus on production, development is planned
to restart in the first half of 2021 in order to support a full
year of production from the Magistral deposit estimated to produce
50 – 55 million pounds of zinc. By the end of 2021, mining
operations at the Magistral deposit are expected to complete and
the Santander operation is planned to move into an exploration
phase to focus on the discovery and definition of new
mineralization to compliment the existing Santander Pipe mineral resource.
Table 1: Preliminary Consolidated 2020 Production Results and
2021 Production Guidance
Payable Production
by
Asset
|
Actuals
|
Guidance 2
|
Q1 – Q3
2020
|
Q4
2020
|
FY
2020
|
FY
2020
|
FY
2021
|
Zinc Production
(Million lbs)
|
|
|
|
|
|
Perkoa (100%)
3
|
113
|
37
|
150
|
152 – 157
|
150 – 165
|
Rosh Pinah (100%)
3
|
67
|
19
|
86
|
86 – 91
|
70 – 75
|
Caribou
|
|
15
|
–
|
15
|
15
|
60 – 65
|
Santander
|
44
|
18
|
62
|
59 – 64
|
50 – 55
|
Total Zinc
Production
|
239
|
74
|
313
|
312 –
327
|
330 –
360
|
Lead Production
(Million lbs)
|
|
|
|
|
|
Rosh Pinah (100%)
3
|
11
|
7
|
18
|
12 – 13
|
20 – 23
|
Caribou
|
|
5
|
–
|
5
|
5
|
21 – 23
|
Santander
|
5
|
2
|
7
|
6 – 7
|
4 – 4
|
Total Lead
Production
|
21
|
9
|
30
|
23 –
25
|
45
– 50
|
Silver Production
(Thousand ozs)
|
|
|
|
|
|
Rosh Pinah (100%)
3
|
147
|
78
|
225
|
253 – 263
|
180 – 200
|
Caribou
|
|
116
|
–
|
116
|
116
|
585 – 650
|
Santander
|
316
|
95
|
411
|
373 - 383
|
160 – 175
|
Total Silver
Production
|
579
|
173
|
752
|
742 –
762
|
925 –
1,025
|
|
|
(2)
|
2021 guidance
constitutes forward-looking information; see "Cautionary Note
Regarding Forward-Looking Statements".
|
(3)
|
Trevali's
ownership interest is 90% of Perkoa and 90% of Rosh
Pinah.
|
2021 Consolidated Cost Guidance
Consolidated cost guidance for 2021 for C1 Cash
Cost1 is estimated between $0.80 – $0.84 per
pound of zinc and AISC1 is expected to range
between $0.90 – $0.97 per pound of zinc (see Table 2). Capital
expenditures for the group is forecast at $50 million, consisting of $39 million in sustaining capital,
$6 million in exploration capital, and $5 million in
expansionary capital.
The Company expects costs in the first half of the year to be
higher than the second half partly due to the decision to restart
the Caribou operation as well as the decision to resume, with the
expectation of completing, underground development activities at
Santander in the first half of 2021.
Capital costs are expected to be higher in the first half of the
year due to anticipated one-time costs related to the restart of
Caribou and underground development costs at Santander. 2021
expansionary capital guidance currently excludes the RP2.0 Expansion Project as the timing and costs
related to the RP2.0 Expansion
Project will be determined and guided as part of the Feasibility
Study and a positive investment decision by the Company.
Exploration activities will focus on extending the mine lives of
Perkoa, Rosh Pinah, and Santander after being largely suspended in
2020. At Perkoa drilling recommenced on the T3 deposit in Q4 2020
and will be a focus for 2021. The 2021 exploration objectives at
Rosh Pinah are two fold, to discover another Zn-Pb replacement
style orebody within hauling distance of the mill along the
Northern extensions on the WF3-Gergarub corridor and to extend the
current deposits down plunge at depth at WF3 and AAB, while also
advancing regional targets. The timing and extent of the
expenditures for this exploration are contingent on positive
exploration results and additional funds beyond guidance may be
allocated.
Table 2: 2021 Consolidated Operating Cost and Capital
Expenditure Guidance2
Asset
|
C1 Cash
Cost1
($/lb
Zn)
|
AISC1
($/lb
Zn)
|
Sustaining
Capital
Expenditures ($m)
|
Perkoa (100%)
3
|
0.81 –
0.86
|
0.89 –
0.94
|
9
|
Rosh Pinah (100%)
3
|
0.61 –
0.65
|
0.85 –
0.90
|
18
|
Caribou
|
0.79 –
0.84
|
0.91 –
0.97
|
9
|
Santander
|
1.01 –
1.07
|
1.06 –
1.12
|
3
|
Total
|
0.80 –
0.84
|
0.90 –
0.97
|
39
|
|
|
(1)
|
See "Non-IFRS
Financial Performance Measures".
|
(2)
|
Constitutes
forward-looking information; see "Cautionary Note Regarding
Forward-Looking Statements".
|
(3)
|
Trevali's
ownership interest is 90% of Perkoa and 90% of Rosh
Pinah.
|
2021 C1 Cash Cost1 and
AISC1 guidance reflect an estimated annual
treatment charge of $225 per tonne, a
significant decrease from the historic high of $300 per tonne realized for 2020. Trevali
estimates that for every $10 per
tonne change (+/–10%) to the treatment charge, C1 Cash
Cost1 and AISC1 is impacted by
approximately $0.01 per pound of
zinc.
T90 Program
In November 2019, Trevali launched
the T90 business improvement program which originally targeted a
reduction in AISC1 to $0.90 per payable pound of zinc by the beginning
of 2022 through achieving annual sustainable efficiencies of
$50 million. In response to market
conditions as a result of the COVID-19 pandemic, the implementation
of cost benefits under the T90 business improvement program was
accelerated by a full year to the beginning of 2021.
Given improvements to the zinc market, the decision to restart
Caribou was made with the expectation that the operation will
generate significant free cash flow over its planned two year mine
life. However, restarting mining operations at Caribou is expected
to result in a higher AISC1 at Caribou
than the T90 target for 2021 and, as a result, Caribou is expected
to contribute negatively against this metric, on an aggregate
basis, during 2021. Following the planned ramp-up of Caribou in
2021, the AISC1 for Caribou is forecast to be
between $0.84 and $0.90 per pound of zinc in 2022, well under the
consolidated $0.90 per pound of zinc
target in Trevali's T90 business improvement program.
Furthermore, in response to the improved zinc market, the
decision was made to restart underground development at Santander
after having suspended activities during the second half of 2020.
AISC1 for Santander is therefore now being guided to be
between $1.06 and $1.12 per pound of zinc in 2021; while this is
expected to contribute negatively to the T90 target for the year,
the forecasted AISC1 is well below the current zinc
price and the average hedged price for the Company's zinc, and as
such is expected to contribute positively to free cash flow during
the year while providing the Company with optionality to evaluate
the long-term future of the asset.
Q4 2020 and Full Year Results Conference Call and Webcast
Details
Trevali will release the Q4 2020 and full year financial and
operating results before the market opens on Thursday, February 25, 2020 and a conference call
will be held the same day for management to discuss the Q4 2020
financial and operating results.
Conference call dial-in details:
Date: Thursday, February 25, 2020 at
01:00PM Eastern Time
Toll-free (North America): 1 (877)
291-4570
International: +1 (647) 788-4919
Webcast: http://www.gowebcasting.com/11056
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 . Forward-looking
statements also include statements with respect to the Company's
operations, including the resumption of operations at Caribou, the
anticipated costs associated therewith, the dates upon which the
Company expects to resume mining and production at Caribou and the
operational and commercial enhancements expected to be implemented
at Caribou, the Company's expectations with respect to the
economics of Caribou after the re-start, including the Company's
ability to generate positive cash flow from the operation of
Caribou, financial and operational guidance for the fiscal
year 2021, including the Company's forecasted AISC, C1 Cash Cost,
capital cost and production, expectations with respect to the
Company's financial results for fiscal year 2021, including its
expectations with respect to cash flows generated from its
operations, the Company's ability to finance the RP2.0 Expansion Project at Rosh Pinah from cash
flows, the timing and delivery of the feasibility study for the
RP2.0 Expansion Project at Rosh
Pinah, expectations with respect to the use of proceeds from the
Company's equity financing, expectations and timing regarding
the T90 business improvement program, hedging activities, the
Company's growth strategies and planned development activities,
including the Company's planned development and exploration
activities at Santander, the timing and nature of these activities
and the expected benefits to the Company resulting therefrom,
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 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 Company's cost and
production guidance may not accurately estimate the Company's
actual costs or the actual production at the Company's projects;
the Company's operations may not generate cash flow in the amount
anticipated, or at all; that the Company may not complete the
RP2.0 Expansion Project at Rosh Pinah
on the anticipated timeline, or at all; that the Company may not
use the proceeds generated from the Company's equity financing in
the manner currently contemplated; that the Company may fail to
meet its T90 business improvement program objectives or may abandon
these objectives prior to the completion of the T90 business
improvement program; that the Company may not undertake its planned
development and exploration activities on the timelines currently
contemplated, or at all; 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 Corp.