VANCOUVER, BC, Jan. 20, 2022 /CNW/ - Trevali Mining
Corporation ("Trevali" or the "Company") (TSX: TV) (OTCQX:
TREVF) (Frankfurt: 4TI) is pleased
to provide an update for the financing of the Rosh Pinah Expansion
project ("RP2.0"). The results of the
Feasibility Study were released on August
17, 2021 and are available on Trevali's SEDAR profile at
www.sedar.com. Trevali is currently working toward securing
project financing for the RP2.0
expansion project and refinancing both the existing Corporate
Revolving Credit Facility and Glencore Facility, maturing in
September 2022. In parallel, an early
works program has commenced for RP2.0.
Ricus Grimbeek, President and CEO of Trevali, commented, "I am
pleased with the progress made toward securing financing for the
RP2.0 project and a new corporate
facility. The level of interest we have seen along with Glencore's
continued support affirms our belief in the high-quality nature of
the project. Endeavour Financial is assisting us in the financing
process and we are excited to kick-off the early works program. We
will continue to provide updates on the financing of RP2.0 and project progress as milestones are
achieved."
Financing Update
Trevali appointed Endeavour Financial in September 2021 to advise the Company on the
formation of a lending syndicate, coordinate lender due diligence
and negotiate financing documentation with the objective of
providing a competitive non-equity financing solution for
RP2.0 and refinancing the existing
Corporate Revolving Credit Facility. Trevali is considering several
opportunities for the financing package, including project finance
debt, subordinated debt and a silver stream on Rosh Pinah's silver
production.
The Company has received non-binding expressions of interest
from several capital providers about participating in the financing
process, including commercial banks, streaming and royalty
companies, and mining focused alternative lenders, as well as from
Rosh Pinah's concentrate offtaker, Glencore.
Glencore has indicated its support for the project by proposing
an aggregate $33 million financing
package, which may include an extension to the existing Glencore
Facility of $13 million, subordinated
to traditional project finance debt and contingent on the remainder
of the required financing package being secured as well as
negotiation of satisfactory terms and conditions.
Commencement of RP2.0 Expansion
Project Early Works Program
In parallel with its project financing initiatives, Trevali
continues to advance certain aspects of RP2.0 in order to maintain the project
schedule and mitigate the risks associated with the project as
outlined in the Feasibility Study. The early works program, which
has a capital budget of $20 million
is expected to be financed from internal cash flows and consists of
the following scope:
- Procurement of mobile equipment
- Power supply system upgrade
- Paste backfill plant long lead item procurement
- Portal construction and decline development
- Process plant detailed engineering
Trevali will provide more comprehensive information regarding
planned 2022 capital expenditures as part of its production and
cost guidance which is expected to be issued in January 2022.
About the Rosh Pinah Expansion "RP2.0" Project
The Company released and filed the results of the NI 43-101
Feasibility Study with respect to the RP2.0 project on August
17, 2021.
The Feasibility Study estimated that at $1.17/lb zinc, $0.96/lb lead and $24.47/oz silver, the RP2.0 Net Present Value (at an 8% discount rate)
is approximately $156 million with an
expected payback period of 4.6 years and a forecasted Internal Rate
of Return of 58%. Expansionary capital costs were estimated at
$111 million. Once complete, the
expanded mine is projected to produce an annual average of 135
million pounds of payable zinc, 23.7 million pounds of lead and
303,000 ounces of silver over an expected 9-year post-expansion
mine life at a forecasted All-In-Sustaining-Cost1 of
$0.67 per pound of zinc.
Processing Plant: The FS incorporates a planned
upgrade to the comminution circuit to include a new single-stage
SAG mill and pebble crusher. The upgrade also includes primary
crushing upgrades and 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 expected increase to mine production levels and reduce
operating costs. The planned trucking decline is 3.9 km in length,
excluding level access and stockpiles. The new 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. The paste plant commissioning date is
anticipated in Q2 2023 (approximately 9 months before the upgraded
processing plant's expected commissioning date) as it is critical
to fill existing voids (particularly within WF3) to achieve the
increased production target and preferred mining sequence
considered as part of the expansion project. 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.
____________________________
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1 All-In-Sustaining-Cost "AISC" and
C1 cash costs are non-IFRS financial performance measures.
All-In-Sustaining Cost adds mine operating costs, smelting and
refining costs, distribution costs, royalty costs, sustaining
capital expenditures and lease payments and expresses them on a per
pound of payable zinc produced basis. All-In-Sustaining Cost is not
a standardized measure under IFRS and might not be comparable to
similar financial measures disclosed by other issuers. This measure
is intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. See "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, 2021, dated November 11, 2021 and filed on sedar.com,
which section is incorporated herein by reference, for further
information regarding these measures, including an explanation of
this measure and a reconciliation to the Company's reported
financial results in accordance with IFRS.
|
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.
Figure 1: Rosh Pinah Expansion "RP2.0" Project Overview
For more information, please review the detailed Feasibility
Study filed August 17, 2021 with an
effective date of March 31, 2021,
filed under the Company's profile at SEDAR.com.
About Endeavour Financial Limited (Cayman)
Endeavour Financial, with offices in London, UK, George
Town, Cayman Islands and Vancouver, British Columbia, is one of the top
mining financial advisory firms, with a record of success in the
mining industry, specializing in arranging multi-sourced funding
solutions for development-stage companies. Founded in 1988,
Endeavour Financial has a well-established reputation of achieving
success with over US$500 million in
royalty and stream finance, US$4
billion in debt finance and US$28
billion in mergers and acquisitions. The Endeavour Financial
team has diverse experience in both natural resources and finance,
including investment bankers, geologists, mining engineers, cash
flow modelers and financiers.
ABOUT TREVALI
Trevali is a global base-metals mining Company headquartered in
Vancouver, Canada. The bulk of
Trevali's revenue is generated from zinc and lead concentrate
production at its three operational assets: the 90%-owned Perkoa
Mine in Burkina Faso, the
90%-owned Rosh Pinah Mine in Namibia, and the wholly-owned Caribou Mine in
northern New Brunswick, Canada. In
addition, Trevali owns the Halfmile and Stratmat Properties and the
Restigouche Deposit in New Brunswick,
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 company's growth strategy is focused on the
exploration, development, operation and optimization of properties
within its portfolio, as well as other mineral assets it may
acquire that fit its strategic criteria. Trevali's vision is to be
a responsible, top-tier operator of long-life, low-cost mines in
stable pro-mining jurisdictions. Trevali is committed to socially
responsible mining, working safely, ethically, and with integrity.
Integrating responsible practices into its management systems,
standards, and decision-making processes is essential to ensuring
everyone and every community's long-term sustainability.
The shares of Trevali are listed on the TSX (symbol TV), the
OTCQX (symbol TREVF), 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 in this news
release include, but are not limited to, statements with respect to
the financing of the RP2.0 Project,
including with respect to the timing and receipt of project
financing for the expansion, the indicative non-binding expressions
of interest received to date, the contingent financing commitment
from Glencore, the completion of satisfactory lender due diligence,
and the negotiation of definitive documentation with respect to new
financing facilities; statements with respect to the RP2.0 Project preparatory activities and early
works, including the proposed project schedule and the potential
for same to mitigate the risk the project execution as outlined in
the feasibility study, the Company's ability to finance these
activities from internal cash flows, the stand-alone investment
case underpinning the early works program, the activities
comprising the early works program, the timing of proposed capital
expenditures in respect of the project, and that the early works
program will enhance the existing operations at Rosh Pinah and
advance the Company's ESG goals; statements with respect to the
results of the Feasibility Study, including the expected
expansion of throughput and the existing production capacity, 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, the design of the project to minimize production risks and
capture expected elevated zinc prices to support the funding of the
project while also positioning the operation for long-term resource
expansion, estimates of project capital costs, future production
forecasts, , estimates of All-in Sustaining Cost, and economic
estimates, including estimates of internal rate of return, payback
period and net present value.
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 Company will be
able to secure adequate financing for the RP2.0 expansion project and the refinancing of
the Company's existing credit facilities, and that the board of
director of the Company will make a positive investment decision
regarding the expansion project; that the Company will proceed with
the development and construction of the expansion project as set
forth in the Feasibility Study; that the expansion project will
proceed on the timeline currently anticipated, including with
respect to the preparatory activities and early works program
described above; 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, the risk that the
Company will be unable to security financing for the RP2.0 project on acceptable terms or at all,
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