VANCOUVER,
BC, Jan. 24, 2022 /CNW/ - Trevali Mining
Corporation ("Trevali" or the "Company") (TSX: TV) (OTCQX:
TREVF) (Frankfurt: 4TI) is pleased
to release preliminary fourth quarter ("Q4") and full year
production results for 2021 and provides 2022 operating, capital
and exploration expenditure guidance. All financial figures are in
U.S. dollars and are unaudited.
Ricus Grimbeek, Trevali's President and CEO
stated, "The company ended 2021 with much to be excited about for
2022 and beyond. We achieved excellent performance from Rosh Pinah
and had improved Q4 2021 performance at Perkoa and the recently
divested Santander mine, though faced challenges at Caribou which
we are working through. We also experienced ongoing issues related
to COVID-19 which had an impact on our ability to operate and
achieve our targets. Our COVID-19 control measures are holding up
well and the experience gained further supports our focus on the
health and safety of our workforce and surrounding communities.
The Trevali team has done an excellent job at
identifying ways to continue to optimize our operations as we look
to minimize the effects of anticipated declining ore grades in
2022. We are focused on safety, operational excellence, disciplined
capital allocation, debt reduction and investing in the
RP2.0 project at Rosh Pinah
("RP2.0").
The current zinc price of approximately
$1.65 per pound is roughly
$0.29 per pound higher than the
average observed price in 2021. The higher zinc price environment
supports the potential for robust organic cash flow generation and
eases the ongoing financing process for RP2.0 as we continue to progress the early works
program that we recently began."
Key 2021 Highlights Include:
- Total Recordable Injury Frequency ("TRIF") in 2021 saw an
increase to 8.7 from 4.5 in in 2020, however the severity of
injuries declined
- Achieved 2021 payable zinc production of 322 million pounds,
slightly below adjusted guidance of 325 to 350 million pounds
of payable zinc when normalizing for the sale of Santander.
- Restarted the Caribou Mine with an initial two-year mine
plan with potential to extend the mine life.
- Commenced Pilot Testing of FLSmidth's Rapid Oxidative Leach
Technology at Caribou with results expected to form the basis
of a preliminary economic assessment and an NI-43-101 technical
report expected to be published in H1 2022.
- Published Trevali's Third Annual Sustainability report
refining targets in order to reduce water consumption and
greenhouse gas emissions.
- Published the Feasibility Study for RP2.0 outlining a planned increase to
throughput by 86% and an expected decrease in operating costs.
- Closed the sale of the Santander Mine in Peru in December
2021, enabling the Company to continue its focus on
disciplined capital allocation and the financing of RP2.0.
Q4 2021 and Full Year 2021 Preliminary
Production Results & 2022 Production Guidance
Total zinc production from operations was 78
million pounds for Q4 2021 for total annual production of 322
million pounds of payable zinc. Trevali's 2021 actual production
finished below the 330 – 355 million pounds of payable zinc revised
guidance range disclosed on August 4,
2021. Accounting for the sale of the 100%-owned Santander
mine, which closed December 3, 2021,
the results fell slightly short of adjusted guidance (normalized
for the sale of Santander) of 325 – 350 million pounds[1] of
payable zinc. The production figures provided herein are
preliminary and subject to final adjustment. The Company will
further expand on 2021 results, including with respect to cost
performance, when it releases 2021 fourth quarter and full year
results.
Consolidated production guidance for 2022 is
estimated between 247 – 280 million pounds of payable zinc, 36 – 41
million pounds of payable lead and 688 – 778 thousand ounces of
payable silver. Zinc production is expected to be moderately higher
in Q2 and Q3 versus the first and last quarter of 2022 due to
scheduling. At each of the three operations, Q1 is anticipated to
have the lowest level of production for the year.
Table 1: Preliminary Consolidated 2021
Production Results and 2022 Production Guidance
Payable Production
by Asset
|
Actuals
|
Guidance
1
|
Q4
2021
|
FY
2021
|
FY
20215
|
FY
2022
|
Zinc Production
(Million lbs)
|
Perkoa (100%)
2
|
37
|
161
|
160 – 170
|
128 – 145
|
Rosh Pinah (100%)
2
|
21
|
76
|
72 – 77
|
58 – 66
|
Caribou
|
|
10
|
41
|
48 – 53
|
60 – 68
|
Santander
3
|
9
|
45
|
50 – 55
|
n/a – n/a
|
Total Zinc
Production4
|
78
|
322
|
330 –
355
|
247 –
280
|
Lead Production
(Million lbs)
|
Rosh Pinah (100%)
2
|
8
|
21
|
20 – 23
|
16 – 18
|
Caribou
|
|
3
|
13
|
16 – 17
|
20 – 23
|
Santander
3
|
1
|
5
|
4 – 4
|
n/a – n/a
|
Total Lead
Production4
|
12
|
39
|
40 –
44
|
36
– 41
|
Silver Production
(Thousand ozs)
|
Rosh Pinah (100%)
2
|
73
|
188
|
180 – 200
|
158 – 178
|
Caribou
|
|
92
|
359
|
428 - 477
|
530 – 600
|
Santander
3
|
52
|
355
|
282 - 297
|
n/a – n/a
|
Total Silver
Production4
|
217
|
902
|
888 –
972
|
688 –
778
|
(1) 2022
guidance constitutes forward-looking information; see "Cautionary
Note Regarding Forward-Looking Statements".(2) Trevali's
ownership interest is 90% of Perkoa and 90% of Rosh Pinah.
(3) Trevali closed the sale of Santander on December 3,
2021. (4) Totals may not add due to
rounding. (5) Guidance revised on August 4, 2021. See
press release of the Company entitled "Trevali Reports Second
Quarter 2021 Results with Adjusted EBITDA of $32 million" for
further details
|
1 Adjusted
guidance subtracts approximately one month of production from the
previous guidance of 50 to 55 million pounds of zinc.
|
2022 Consolidated Cost and Capital Expenditure
Guidance
Consolidated cost guidance for 2022 for C1 Cash
Cost4 is estimated between $0.85 – $0.93 per
pound of zinc and AISC4 is expected to range between
$1.03 – $1.13 per pound of zinc. Capital expenditures for
the group is estimated to range between $61 - $68 million,
consisting of $43 million in
sustaining capital, $2 million in
exploration capital, and $20 million
in expansionary capital at Rosh Pinah and $0.5 million in expansionary capital at
Caribou.
Table 2: 2022 Consolidated Operating Cost and
Capital Expenditure Guidance2
Asset
|
C1 Cash
Cost4
|
AISC4
|
Sustaining Capital
Expenditures ($m)
|
Expansionary
Capital Expenditures ($m)
|
($/lb
Zn)
|
($/lb
Zn)
|
Perkoa (100%)
3
|
0.93 –
1.01
|
0.98 – 1.08
|
7
|
0
|
Rosh Pinah (100%)
3
|
0.71 –
0.78
|
1.07 – 1.17
|
24
|
20
|
Caribou
|
0.85 –
0.93
|
1.10 – 1.20
|
12
|
0.5
|
Exploration
Expenditures
|
|
|
2
|
Total
5
|
0.85 –
0.93
|
1.03 –
1.13
|
61
-68
|
(2) 2022
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.
(4) See "Non-IFRS Financial Performance
Measures". (5) Totals may not add due to
rounding.
|
2022 C1 Cash Costs4 and
AISC4 guidance reflect an estimated annual zinc
treatment charge of $215 per tonne,
an increase from $159 per tonne
realized for 2021. For every $20/tonne change in zinc treatment charges there
is an impact to C1 Cash Cost4 and AISC4 of
approximately $0.02 per pound of
zinc.
Operational Updates and Outlook
Perkoa Mine, Burkina
Faso
Perkoa delivered annual production of 161 million
pounds of zinc in 2021, at the low end of the annual revised
guidance range of 160 – 170 million pounds. In 2022, zinc payable
production is expected to decline to 128 – 145 million pounds,
principally as a result of the decline in zinc grade as per the
2022 mine plan. Cost guidance for 2022 for C1 Cash Cost4
is estimated between $0.93 –
$1.01 per pound of zinc and
AISC4 is expected to range between $0.98 – $1.08 per
pound of zinc. Sustaining capital of $7
million is planned for 2022.
Rosh Pinah Mine, Namibia
Rosh Pinah produced 76 million pounds of payable
zinc in 2021, meeting its annual revised guidance for zinc, and was
also within the guidance range on lead and silver volumes,
producing 21 million pounds of lead and 188,000 ounces of silver.
In 2022, zinc payable production is expected to reduce to 58 – 66
million pounds of zinc due to lower expected head grades. Cost
guidance for 2022 for C1 Cash Cost4 is estimated between
$0.71 – $0.78 per pound of zinc and AISC4 is
expected to range between $1.07 –
$1.17 per pound of zinc.
In addition to planned sustaining capital
expenditures of $24 million at Rosh
Pinah, expansionary capital of $20
million for early works RP2.0
is planned. As noted in the January 20,
2022 press release entitled "Trevali Provides Financing
Update for the Rosh Pinah Expansion "RP2.0" Project and Commences Early Works
Program", the early works program is designed to advance certain
aspects of the RP2.0 project until
full financing and Board approval is obtained. A modest amount of
capital has also been budgeted for planned study work related to
the Gergarub Joint Venture.
Caribou Mine, Canada
Caribou produced 41 million pounds of payable
zinc in 2021, below the annual revised guidance of 48 – 53 million
pounds. The mine was placed on care and maintenance in March 2020 and was restarted in Q1 2021 with a
two-year production plan. Underground productivity was challenged
in the ramp-up and production was further impacted in Q3 2021 due
to the temporary suspension of mining in a localized area caused by
ground conditions. Mine resequencing and productivity challenges
persisted into Q4 2021. Limited ore availability in 2021 due to low
development productivity, equipment availability and ground control
management has been factored in to the schedule for 2022. The
production profile sees higher levels in the second half of the
year relative to the first half. In 2022, zinc payable production
is expected to increase to 60 – 68 million pounds of zinc. Cost
guidance for 2022 for C1 Cash Cost4 is estimated between
$0.85 – $0.93 per pound of zinc and AISC4 is
expected to range between $1.10 –
$1.20 per pound of zinc.
Caribou sustaining capital is forecast at
$12 million and is focused on planned
underground development to support a flexible production schedule
in 2022 and the expected expansion of the tailings dam. The reason
for the higher forecasted capital relative to the original re-start
plan is two-fold: although the original plan had flexibility built
into it, the production challenges experienced in H2 2021 prompted
a need for a further increase in sustaining capital to allow for
the achievement of production objectives; and second, we believe
that there is an opportunity to bring forward some work on the
tailings storage facility which we expect will reduce our closure
liability. Additionally, $0.5 million
has been budgeted as expansionary capital for the planned Caribou
Rapid Oxidative Leach Preliminary Economic Assessment (refer to the
August 3, 2021 press release entitled
"Trevali Begins Pilot Testing of FLSmidth's Rapid Oxidative Leach
Technology at Caribou" for background). Assuming a positive
assessment, additional capital may be allocated to advance the
project in 2022.
It is anticipated that by the end of H1 2022, a
decision will be made on whether to proceed on pursuing additional
underground development, which is expected to extend the mine life
beyond the current two-year mine plan. The outcome of the Caribou
Rapid Oxidative Leach study will also inform this decision.
Santander, Peru
Santander delivered annual production of 45
million pounds of zinc in 2021, at the low end of the adjusted
annual guidance range of 45 – 50 million pounds[2]. The Company
announced the divestiture of the Santander mine on November 8, 2021 and the transaction closed on
December 3, 2021.
Exploration
Exploration activities in 2022 are designed to focus on
extending the mine lives of Perkoa and Rosh Pinah. At Perkoa, we
plan to drill T3 deposit in Q2 2022 with results anticipated in
late 2022. The 2022 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.
2 Adjusted
guidance subtracts approximately one month of production from the
previous guidance of 50 to 55 million pounds of zinc.
|
Q4 2021 and Full Year Results Conference Call and Webcast
Details
Trevali will release Q4 2021 and full year
financial and operating results before the market opens on
Friday, February 25, 2022. The
Company will hold a conference call on Friday, February 25,2022 for management to
discuss the Q4 2021 financial and operating results.
Conference call dial-in details:
Date: Friday, February 25, 2022 at
01:00PM Eastern Time
Toll-free (North America): 1 (877)
291-4570
International: +1 (647) 788-4919
Webcast: http://www.gowebcasting.com/11718
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), 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 statements 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 Company's operations; financial and operational
guidance for the fiscal year 2022, including the Company's
forecasted AISC, C1 Cash Cost, capital expenditures and production;
expectations with respect to the Company's financial results for
fiscal year 2022, including its expectations with respect to cash
flows generated from its operations; estimates of ore grades and
the Company's ability to minimize the effects of anticipated
declining ore grades in 2022; future zinc prices; estimates of zinc
treatment charges; the RP2.0 Project
preparatory activities and early works, the Company's ability to
finance these activities from internal cash flows, and the timing
of proposed capital expenditures in respect of the project; the
feasibility study for the RP2.0
Project, including the expectations and forecasts contained
therein; the financing of the RP 2.0
Project; operations at Caribou, including with respect to the mine
schedule for 2022 and the ability of same to enhance ore
availability by improving development productivity, equipment
availability and ground control management; the Rapid Oxidative
Leaching pilot testing program at Caribou, including the ability
for the results of this testing program to form the basis for a
preliminary economic assessment, the timing for completion of such
preliminary economic assessment and publication of a NI 43-101
technical report with respect to same and the potential for
increased capital expenditures in respect of the project;
extensions to the mine life of Caribou; the planned underground
development and expansion of the tailings dam at Caribou, the
timing of these activities and the ability of these activities to
allow for the achievement of the Company's production objectives
and reduce closure liabilities; the Company's growth strategies and
planned exploration and development activities, including the
Company's planned development and exploration activities at Rosh
Pinah and Perkoa, the timing and nature of these activities and
expected benefits to the Company resulting therefrom; the timing
for the release of the Company's full 2021 financial and operating
results; and the measures that the Company has put in place at its
operations with respect to COVID-19 and the ability of such
measures to supports the health and safety of our workforce and
surrounding communities.
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 assumptions
underlying the Company's forecasts with respect to AISC, C1 Cash
Cost, capital expenditures and production, are reasonable and that
such forecasts are achievable by the Company; the Company will be
successful in minimizing the effects of anticipated declining ore
grades in 2022; future commodity prices; the Company will be able
to secure adequate financing for the RP2.0 expansion project and that the board of
directors 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 RP2.0 feasibility study;
that the expansion project will proceed on the timeline currently
anticipated, including with respect to the preparatory activities
and early works program; that the expansion project will yield the
benefits expected by the Company; that the mine schedule for 2022
at Caribou will enhance ore availability by improving development
productivity, equipment availability and ground control management;
that the Rapid Oxidative Leaching pilot testing program at Caribou
will be successful and the results of which will support a
preliminary economic assessment; that the Company will publish the
expected preliminary economic assessment on Caribou on the timeline
currently anticipated; that the Company will be able to
successfully extend the mine life at Caribou; the Company will
complete the planned development activities at Caribou on the
timelines currently expected and that these activities will have
the benefits anticipated by the Company; 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; mineral
resource and reserve estimates are indicative of actual
mineralization; the Company will carry out its planned development
and exploration activities on the timeline currently anticipated;
and the Company's measures with respect to the COVID-19 pandemic
will enable it to maintain operations and ensure the health and
safety of its workforce and surrounding communities.
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 assumptions underlying the Company's forecasts with
respect to AISC, C1 Cash Cost, capital expenditures and production
will prove to be inaccurate or not achievable and, as a result, the
Company's actual results will differ materially from such
forecasts; the risk that the Company's efforts to minimize the
effects of anticipated declining ore grades in 2022 will not be
successful; the risk that the Company will be unable to security
financing for the RP2.0 project on
acceptable terms or at all; the risk that the board of directors
may not ultimately approve the RP2.0
expansion project; risks with respect to the development of the
RP2.0 expansion project, including
that, if developed, the RP2.0
expansion project will not be developed as currently anticipated or
as set for the in the feasibility study with respect thereto, or
yield the anticipated benefits to the Company; the risk that the
actions taken by the Company at Caribou to improve flexibility in
the mine plan and increase production in 2022 will not be
successful; the risk that the Company may not prepare a preliminary
economic assessment on Caribou on the timeline currently
anticipated or at all, including as a result of the Rapid Oxidative
Leaching pilot testing program at Caribou having not been
successful or having not yielded the results necessary to enable
the Company to prepare a preliminary economic assessment on
Caribou; the risk that the Company may not be able to extend the
mine life at Caribou; the risk that the Company may not complete
the planned development activities at Caribou on the timelines
currently expected, or at all, and that such activities may not
yield the expected benefits to the Company; 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.
Non-IFRS Financial Performance Measures
C1 Cash Costs and All-In Sustaining Cost are
non-IFRS measures. C1 Cash Costs add mine operating costs, smelting
and refining costs, distribution costs and royalty costs, excluding
by-product revenues, and divides these costs by the pounds of
payable zinc produced. All-In Sustaining Cost. These non-IFRS
measures are not standardized measures under IFRS and might not be
comparable to similar financial measures disclosed by other
issuers. These measures are 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. Readers should refer to "Use of Non-IFRS Financial
Performance Measures" section 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
www.sedar.com, which section is incorporated herein by reference,
for an explanation of these measures and reconciliations of these
measures to the Company's reported financial results in accordance
with IFRS.
SOURCE Trevali Mining Corporation