VANCOUVER, BC, Aug. 17, 2021 /CNW/ - Trevali Mining
Corporation ("Trevali" or the "Company")
(TSX: TV) (BVL: TV) (OTCQX: TREVF) (Frankfurt: 4TI) is pleased to
announce positive results from the Rosh Pinah Expansion
"RP2.0" NI 43-101 Feasibility Study
(the "FS") at its 90%-owned Rosh Pinah mine in Namibia. All figures in this release are
stated in United States dollars on
a 100%-ownership basis.
Highlights of the FS Include:
- Planned 86% increase in mill throughput from 0.7 Mtpa to 1.3
Mtpa.
- Assuming a positive investment decision:
-
- Detailed engineering and procurement of long-lead items
expected to commence in Q4 2021, with construction expected to
commence mid-year 2022; and
- Commercial production expected around mid-year 2024.
- Incorporates previously announced 15-year solar power purchase
agreement with EMESCO for the supply of solar power of
approximately 30% of the required power.
- Addition of a water treatment plant in conjunction with the
paste fill plant anticipated to reduce water intensity of the
operation from 1.54 m3/t
to 0.65 m3/t of ore
processed.
- Production and Operating Costs (post-Commercial
Production):
-
- Average annual zinc payable production: 135 Mlbs.
- Average AISC1: $0.67/lb .
- Average annual lead and silver payable production: 23.7 Mlbs
and 303 Koz, respectively .
- Proven and Probable Mineral Reserves
-
- 12.35 Mt containing 1,744 Mlbs of zinc, 370 Mlbs of lead, and
7,858 Koz's of silver (see Table 5 below).
- Project CAPEX of $111 million:
-
- Modifications to the existing process plant to include a single
stage SAG mill, crushing and ore blending area, increased zinc and
lead flotation circuit capacity;
- Addition of a paste fill plant and reticulation system
including a water treatment plant;
- Dedicated portal and decline to the WF3 deposit with new
material handling system; and
- Mine surface and underground infrastructure.
- Project economics (after-tax) using $1.17/lb zinc, $0.96/lb lead and $24.47/oz silver price assumptions:
-
- NPV8%: $156M.
- Free cash flow: $290M.
- IRR: 58%.
- Payback period: 4.6 years.
_______________
|
|
1 All-In-Sustaining-Cost "AISC" and
C1 cash costs are non-IFRS financial performance measures. See "Use
of Non-IFRS Financial performance Measures" in the Company's
Management's Discussion and Analysis for the three and six months
ended June 30, 2021, dated August 4, 2021 and filed on sedar.com
for further information regarding these measures.
|
Ricus Grimbeek, President and CEO, commented, "Since providing
the results of the Expansion Pre-Feasibility Study in August
2020, the team has optimized and de-risked the project, delivering
a Feasibility Study that reaffirms robust project economics, while
reducing our carbon intensity and water consumption usage on a per
tonne milled basis. The RP2.0
project will modernize and expand the 50-year-old mine, increasing
throughput by 86% and enabling the operation to increase production
at a significantly lower operating cost, all while working more
safely and reducing our environmental footprint.
In parallel with advancing the technical aspects of the project,
we have had productive discussions with our existing lending
syndicate as well as numerous financial institutions on securing
project debt financing to minimize equity dilution."
Rosh Pinah Expansion "RP2.0"
Feasibility Study
Processing Plant: The FS incorporates a planned
upgrade to the comminution circuit to include a new, single-stage
SAG mill and pebble crusher. The expansion also includes primary
crushing upgrades and an ore blending area, along with other
circuit modifications intended to provide increased flotation,
thickening, filtration and pumping capacity to achieve the target
throughput of 1.3 Mtpa. The upgrade will also include several
flowsheet modifications aimed at improving both the concentrate
grade and metal recoveries.
Underground Development and Infrastructure: A dedicated
portal and decline to the WF3 deposit will be constructed to
support the increase in mine production levels and to reduce
operating costs. The planned trucking decline is 3.9 km in length,
excluding level access and stockpiles. The trucking decline will
act as an additional fresh air intake within the ventilation
network and will enable direct ore haulage from the WF3 zone
to a new surface primary crusher station utilizing large-scale (60
tonne) trucks. Ore sourced from other areas (EOF, SF3, SOF, and
BME) will be transported to the existing underground crushing
system using the existing 30 tonne truck fleet and conveyed to
surface via the existing conveying system.
Paste Fill Plant: A paste fill plant designed to operate
at both the current 0.7 Mtpa and the 1.3 Mtpa targeted throughput
rate has been included. Paste filling the stopes rather than
leaving them void is expected to improve ground stability, increase
ore recovery, and reduce dilution, and also to reduce surface
tailings as a portion of new tailings will be redirected
underground to be used as paste fill. A water treatment plant has
been added to the paste fill plant system which is expected to
significantly reduce water consumption. The system in conjunction
with the paste fill plant system is anticipated to reduce the water
intensity of the Rosh Pinah operation from 1.54 m3/t to 0.65 m3/t of ore.
Mobile Equipment: The existing, small-scale underground
trucks and load-haul dump (LHD) fleet will continue to be used
primarily in the current mining areas. As mining extends deeper and
average haulage distances increase in WF3, new large-scale trucks
and LHDs are planned to be purchased for the more efficient
transportation of material to surface which is expected to reduce
costs over the life-of-mine.
Renewable Solar Energy Power Purchase Agreement: Trevali
has entered into a fifteen-year Power Purchase Agreement
(the "PPA") with Emerging Markets Energy Services Company
("EMESCO"). The PPA with EMESCO is anticipated to deliver 30% of
Rosh Pinah's power requirements during the life of the agreement.
EMESCO will be responsible for the design, permitting, financing
and implementation of a solar energy system on a neighbouring
property at no cost to Trevali. EMESCO will sell the power
generated to Trevali at a fixed rate that is expected to reduce
energy costs by 8% over the fifteen-year term of the agreement.
Onsite Operating Costs: Once the project is
commissioned, onsite operating costs are expected to reduce by
approximately 26% on a per tonne milled basis. Mining costs per
tonne milled are expected to be reduced due to the planned change
in the mining method to include paste fill allowing for increased
ore recovery and reduced mining dilution. Mining costs are also
expected to benefit from the dedicated underground decline to the
WF3 deposit which should allow for more efficient material handling
and reduced cycle times. The processing unit costs are expected to
decrease as a result of treating increased tonnages following the
upgrade. Fixed on site costs on a per tonne milled basis are also
expected to decrease as the mine ramps up from 0.7 Mtpa to the FS
target of 1.3 Mtpa as a function of higher annual throughput.
Table 1: Life of Mine and RP2.0
FS Expansion Economics
|
|
|
|
Project
Metrics
|
Unit
|
LOM (2021 –
2032)
|
Post Expansion
(2024 - 2032)
|
Mine life
|
Years
|
12
|
9
|
Total ore
production
|
Kt
|
12,3512
|
10,432
|
Zinc grade
(average)
|
%
|
6.5
|
6.6
|
Lead grade
(average)
|
%
|
1.4
|
1.4
|
Silver grade
(average)
|
g/t
|
19.8
|
19.3
|
Payable Zinc
metal
|
T
|
592,542
|
517,127
|
Payable Lead
metal
|
T
|
108,138
|
92,612
|
Payable Silver
metal
|
Oz
|
3,079,951
|
2,681,453
|
Capital costs –
project
|
US$M
|
111
|
-
|
Capital costs –
sustaining
|
US$M
|
120
|
66
|
Capital costs –
closure
|
US$M
|
6
|
6
|
C1 cash
costs1
|
US$/lb
|
0.63
|
0.60
|
All-In-Sustaining-Cost "AISC"1
|
US$/lb
|
0.72
|
0.67
|
|
|
|
|
After-tax free
cashflow
|
US$M
|
290
|
373
|
After-tax NPV
(8%)
|
US$M
|
156
|
-
|
After-tax
IRR
|
%
|
58
|
-
|
Payback Period
After-tax
|
Years
|
4.6
|
-
|
Table 2: Expansion Capital Cost Summary in US$M
Item
Description
|
Total
|
Processing
|
|
Processing plant
upgrade
|
50.2
|
Mine
Infrastructure - Surface
|
|
Boxcut / Portal
(WF3)
|
0.7
|
Paste and Backfill
Plant (incl. RO WTP)
|
18.6
|
Replacement of
NamPower OHL
|
2.2
|
Upgrading of 66kV
Yard @ RP Mine
|
2.4
|
Office, Control Room
& Network Upgrades
|
1.7
|
Other
|
0.2
|
Mine
Infrastructure - Underground
|
|
Paste Fill
Reticulation
|
4.0
|
Electrical
|
1.3
|
Dewatering
|
0.6
|
Ventilation
|
2.2
|
Other
|
1.2
|
Sub-Total
|
85.4
|
Indirect
Costs
|
|
EPCM
Contractor
|
14.2
|
Owners
Team
|
2.6
|
Contingency
|
8.8
|
Total
|
111.0
|
_______________
|
|
2 As
of effective date of 31 March 2021, see Table 6.
|
Table 3: Zinc Price Sensitivity Estimates
Financial
Metric
|
Unit
|
$0.90/lb
|
$1.00/lb
|
$1.10/lb
|
$1.17/lb
|
$1.20/lb
|
$1.30/lb
|
$1.40/lb
|
Post-tax free
cashflow
|
US$M
|
83
|
161
|
238
|
290
156
|
316
|
393
|
471
|
Post-tax NPV
(8%)
|
US$M
|
13
|
67
|
118
|
169
|
220
|
270
|
Mineral Resources and Reserves
The Mineral Resource estimate for the Rosh Pinah deposit covers
numerous lenses. A total of seven mineral lenses are included in
the updated Mineral Resource estimate as of March 31, 2021.
To convert Mineral Resources to Mineral Reserves, mining cut-off
grades were applied, mining dilution was added, and mining recovery
factors were assessed. Only Measured and Indicated Mineral
Resources were used for Mineral Reserve estimation.
A cut-off value of US$50.0/t was
used to report the Mineral Reserves. The selected cut-off value is
above the projected full breakeven cut-off value.
Updated Mineral Resource and Mineral Reserve estimates are
planned as part of the Company's annual year end process. The
conversion of additional resources and further optimizations may be
included in this process, which, if included, will further enhance
the project's economics. For further information regarding the
Mineral Resource and Mineral Reserve estimate, please see the FS
dated August [16], 2021 and filed on the Company's SEDAR
profile at www.sedar.com.
Table 4: Mineral Resources
Classification
|
Tonnes
|
Grade
|
Contained
Metal
|
|
(Mt)
|
Zn
(%)
|
Pb
(%)
|
Ag
(g/t)
|
ZnEq
(%)
|
Zn (M
lbs)
|
Pb (M
lbs)
|
Ag (k
oz)
|
Measured
|
10.54
|
7.41
|
2.04
|
27.4
|
10.22
|
1,722
|
474
|
8,983
|
Indicated
|
7.92
|
7.48
|
1.46
|
23.8
|
9.60
|
1,306
|
255
|
5,863
|
M&I
|
18.46
|
7.44
|
1.79
|
25.8
|
9.96
|
3,028
|
729
|
14,845
|
Inferred
|
1.58
|
8.31
|
2.19
|
54.9
|
12.04
|
289
|
76
|
2,698
|
Notes:
|
•
|
CIM Definition
Standards for Mineral Resources and Mineral Reserves (2014) were
used for reporting of Mineral Resources.
|
•
|
The Mineral Resources
are stated inclusive of Mineral Reserves.
|
•
|
Mineral Resources are
reported at a 4% ZnEq cut-off grade which approximates a Net
Smelter Return value of US$40/t.
|
•
|
Zinc equivalency was
estimated as ZnEq = Zn (%) + Pb (%) + [Ag (g/t) *
0.028)].
|
•
|
Effective date of
Mineral Resources is March 31, 2021.
|
•
|
The Qualified Person
for the Mineral Resource estimate is Mr Rodney Webster, MAIG, of
AMC.
|
•
|
Totals may not
compute exactly due to rounding.
|
•
|
Mineral Resources are
stated on a 100% ownership basis.
|
Table 5: Mineral Reserves
Classification
|
Tonnes
|
Grade
|
Contained
Metal
|
|
(Mt)
|
Zn
(%)
|
Pb
(%)
|
Ag
(g/t)
|
Zn (M
lbs)
|
Pb (M
lbs)
|
Ag (k
oz)
|
Proven
|
6.14
|
6.26
|
1.5
|
18.8
|
847
|
203
|
3,713
|
Probable
|
6.21
|
6.55
|
1.22
|
20.8
|
897
|
167
|
4,145
|
Total
|
12.35
|
6.41
|
1.36
|
19.8
|
1,744
|
370
|
7,858
|
Notes:
|
•
|
CIM Definition
Standards for Mineral Resources and Mineral Reserves (2014) were
used for reporting of Mineral Reserves.
|
•
|
Mineral Reserves were
estimated at a full breakeven NSR cut-off value of US$50 per
tonne.
|
•
|
NSR values were
calculated based on average metal prices of US$1.17/lb Zn,
US$0.96/lb Pb, and US$24.47/oz Ag.
|
•
|
The average
processing recoveries used were 88.8% for zinc, 68.5% for lead, and
45.0% for silver.
|
•
|
Average payable
values used were 85% for zinc, 95% for lead, and 95% for
silver.
|
•
|
Dilution (Inferred
and unclassified material set to zero grade) assumed as a minimum
of 1.0 m on each hangingwall and 0.5 m on each footwall.
|
•
|
Mining recovery
factors assumed as a minimum of 60%, ranging to 95%, with a
weighted average of 93%.
|
•
|
Mineral Reserves are
reported based on mined ore delivered to the plant as mill
feed.
|
•
|
The average exchange
rate used was N$14.90 = US$1.00.
|
•
|
Effective date of
Mineral Reserves is March 31, 2021.
|
•
|
The Qualified Person
for the Mineral Reserve estimate is Mr Andrew Hall, MAusIMM (CP),
of AMC.
|
•
|
Totals may not
compute exactly due to rounding.
|
•
|
Mineral Reserves are
stated on a 100% ownership basis.
|
Qualified Persons and Technical Information
The written technical disclosure and data in this news release
was approved by Yan Bourassa, P.Geo,
Vice-President of Technical Services of the Company. Mr. Bourassa
is a non-independent Qualified Person within the meaning of
Canadian National Instrument 43-101 – Standards of Disclosure for
Mineral Projects ("NI 43-101"). Qualified persons contributing to
the study, who have also read this release are as follows:
- Andrew Hall, MAusIMM (CPP), AMC
Consultants Pty Ltd., responsible for mining and Mineral Reserve
estimation.
- Rodney Webster, MAIG, AMC
Consultants Pty Ltd., responsible for geology and Mineral Resource
estimation.
- Louise Lintvelt, PrEng, DRA Projects (Pty) Ltd a wholly owned
subsidiary of DRA Global Ltd, responsible for metallurgical and ore
processing aspects.
- Rob Welsh, PrEng, DRA Projects
(Pty) Ltd a wholly owned subsidiary of DRA Global Ltd, responsible
for ore processing and surface infrastructure aspects.
- Mo Molavi, P. Eng, AMC Mining
Consultants (Canada) Ltd.,
responsible for underground infrastructure aspects.
The Mineral Resource and Mineral Reserve estimates have been
reported in accordance with definitions and guidelines set out in
the Definition Standards for Mineral Resources and Mineral Reserves
adopted by the Canadian Institute of Mining, Metallurgy, and
Petroleum and as required by NI 43-101. Mineral Reserve estimates
reflect the Company's reasonable expectation that all necessary
permits and approvals will be obtained and maintained, mining
dilution and mining recovery have been applied in estimating the
Mineral Reserves.
For information regarding the data verification measures applied
to the scientific and technical information contained in this news
release, please see the FS dated August 17,
2021 and filed on the Company's SEDAR profile at
www.sedar.com
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 the management of the
Company as of the date the statement is 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 results of the FS, including the expected
expansion of throughput and the existing production capacity to up
to 1.32Mtpa, the expected reduction of operating costs as a result
of the expansion project, the Company's planned development and
construction activities in respect of the expansion project and the
anticipated results of these development and construction
activities, the environmental and safety benefits expected from the
expansion process and the expected timing of commencement of
construction of the expansion project and achievement of commercial
production; estimates of project capital costs; the
anticipated power requirements of the Rosh Pinah mine and EMESCO's
ability to supply the contracted amount of power at a fixed rate
over the term of the PPA; future production forecasts, including
estimates of the amount of ore production, production grades,
throughput and average annual production of payable zinc, lead and
silver; estimates of cash costs including C1 cash costs and All-in
Sustaining Cost; estimates of mineral reserves and mineral
resources; estimates of average zinc, lead and silver grades and
mineral recoveries over the mine life and post-completion of the
expansion project; economic estimates, including estimates of
internal rate of return, payback period, free cash flow and net
present value; mine life estimates; commodity price estimates;
management's expectations regarding a positive investment decision
by the Company's board of directors; the ability of the Company to
realize environmental efficiencies as a result of the expansion
project; and the Company's expectations with respect to the timing
and receipt of project financing for the expansion.
Forward-looking statements are necessarily based upon estimates
and assumptions, which are inherently subject to significant
business, economic and competitive uncertainties and contingencies,
many of which are beyond the Company's control and many of which,
regarding future business decisions, are subject to change.
Assumptions underlying the Company's expectations regarding
forward-looking statements or information contained in this press
release include, but are not limited to, that the board of director
of the Company will make a positive investment decision regarding
the expansion project and that the expansion project will receive
construction financing; that the Company will proceed with the
development and construction of the expansion project as set forth
in the FS; that the expansion project will proceed on the timeline
currently anticipated; that the expansion project will yield the
benefits expected by the Company; that the assumptions and
estimates underlying production, cost and economic forecasts,
including commodity price and exchange rate assumptions, are
reasonable and are representative of these actual inputs; that the
assumptions and estimates underlying mineral resource and reserve
estimates, including commodity price and exchange rate assumptions,
cut-off grade assumptions and recovery and dilution estimates, are
reasonable and are representative of these actual inputs; that the
Company will achieve actual production and cost and economic
performance in-line with its assumptions; that mineral resource and
reserve estimates are indicative of actual mineralization; and that
the life of mine of Rosh Pinah after the expansion will accord with
expectations.
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;
the adequacy of underground development infrastructure; unforeseen
changes in geological characteristics; changes in the metallurgical
characteristics of the mineralization; the availability to develop
adequate processing capacity; the availability of equipment
necessary to complete development; the size of future processing
plants and future mining rates; increased operating and capital
costs, including with respect to consumables and mining and
processing equipment; risks related to the PPA with EMESCO,
including that EMESCO may not be able to successfully design,
permit, finance and implement the solar energy system in the manner
contemplated by the PPA, or at all, and that the PPA may not
deliver the expected cost savings and GHG emissions reduction;
unforeseen technological and engineering problems; dependence on
key personnel; potential conflicts of interest involving our
directors and officers; labour pool constraints; labour disputes;
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; foreign
currency exchange rate fluctuations; operating in foreign
jurisdictions with risk of changes to governmental regulation;
risks relating to widespread epidemics or pandemic outbreak; 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; cybersecurity threats;
litigation and other risks and uncertainties that are more fully
described in the Company's most recent annual information form,
interim and annual 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. Should one or more of these
risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in forward-looking statements. In addition,
there can be no assurance regarding the achievement or timing of
the Company's exploration, development, construction or commercial
production objectives. The information in the FS Technical Report
is presented with an effective date of March
31, 2021, unless otherwise indicated in the FS Technical
Report.
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