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Trevali Releases Fourth Quarter and Full Year 2020 Results; Achieves Production and Cost Guidance

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Trevali Mining Corporation (TSX: TV) (BVL: TV) (OTCQX: TREVF) (Frankfurt: 4TI) released financial and operating results for the three and twelve months ended December 31st, 2020. The Company achieved production and cost guidance reporting annual production of 313 million pounds of zinc at an all-in sustaining cost1 of $1.02 per pound. In Q4 revenue increased by 36% relative to Q3 at $68.1 million. At the end of the year net debt reduced to $105 million and further reduced to $95 million as at January 31st, 2021. All financial figures are in U.S. dollars.




  • Improved safety performance with a 35% reduction in Total Recordable Injury Frequency for 2020 compared to 2019.
  • Achieved 2020 production and cost guidance by producing 313 million payable pounds of zinc at a C1 Cash Cost1 of $0.90 per pound and an All-in Sustaining Cost1 of $1.02 per pound.
  • 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.
  • Q4 2020 revenues increased 36% to $68.1 million compared to the prior quarter due to a 12% improvement in the average quarterly zinc price and a 15% increase in payable sales volumes.
  • Operating cash flows before changes in working capital of $20.9 million for Q4 2020, due to the implementation of T90 initiatives and the recovery in commodity prices, with positive contributions from all operating mines.
  • Adjusted EBITDA1 of $20.1 million for Q4 2020 ($19.0 million for 2020 year), a 79% increase over prior quarter and consistent with Q4 2019.
  • A non-cash impairment of $43.6 million was recorded in Q4 2020 relating to Santander as a result of the revised mine plan with mining operations expected to complete at the end of 2021.
  • Amended the existing credit facility and arranged a loan facility with Glencore in August 2020.
  • Completed an equity raise of $26.6 million to pursue growth activities in December 2020.
  • Implemented a hedging program covering 148 million pounds of 2021 payable zinc production (~40% of forecast production) through forward swaps, fixed pricing arrangements and put options.
  • Net Debt1 of $105.0 million as at December 31, 2020 reduced to $95.0 million as at January 31, 2021, a result of the collection of receivables largely related to sales late in Q4 2020.
  • Published Trevali’s second annual Sustainability Report in May 2020 setting targets to reduce water consumption and greenhouse gas emissions.


Ricus Grimbeek, Trevali’s President and CEO, stated, “Our entire team delivered a strong performance in Q4 and throughout 2020, closing the year on solid footing. During 2020, we posted a 35% reduction in recordable injuries as compared to 2019.  We achieved our production guidance of 313 million payable pounds of zinc at a C1 cash cost of $0.90 per pound with an all-in-sustaining-cost of $1.02 per pound. In Q4 revenues increased 36% to US$68.1 million compared to the previous quarter, due to a 12% increase in zinc prices and a 15% increase in sales volumes. These factors also supported the delivery of $20.9 million in operating cash flow for Q4 before changes in working capital. Additionally, we accelerated our T90 program a full year ahead of schedule and published our second annual sustainability report.


With the amendment to our existing credit facility, securing a new facility with Glencore, and through the completion of our $26.6 million equity raise, we have strengthened our balance sheet and reduced our net debt position to $95 million as at January 31st 2021. With the equity proceeds we moved to restart Trevali’s Caribou operations in Eastern Canada, are advancing exploration work across the portfolio, and have paid down debt.


Our accomplishments during 2020 enable us to take full advantage of the significant opportunities the positive momentum the zinc markets are providing in 2021.  We are looking forward to an exciting year ahead.  I congratulate everyone at Trevali for the outstanding work they have done during 2020.”



2020 2019 YoY Q4’20 Q3’20 Q4’19 Q4’20
Zinc payable production Mlbs 313.0 417.4 –25% 74.2 74.1 104.8 0% –29%
Lead payable production Mlbs 29.9 50.3 –41% 8.4 6.1 13.8 38% –39%
Silver payable production Moz 0.8 1.5 –47% 0.3 0.1 0.4 200% –25%
Revenue $ 212,884 386,110 –45% 68,086 50,157 91,466 36% –26%
Adjusted EBITDA1 $ 18,960 106,864 –82% 20,101 11,214 20,364 79% –1%
Net (loss) income $ (245,606) (35,411) 594% (51,742) 1,122 (3,833) –4712% 1250%
Net (loss) income per share $ (0.30) (0.04) 650% (0.06) –100% –100%
C1 Cash Cost1 $/lb 0.90 0.88 2% 0.87 0.81 0.86 7% 1%
AISC1 $/lb 1.02 1.01 1% 0.97 0.91 1.02 7% –5%
Sustaining capital expenditure1 $ 32,887 52,004 –37% 6,561 6,665 15,752 –2% –58%
Exploration expenditure $ 4,278 10,362 –59% 550 143 2,755 285% –80%




Trevali is a global base-metals mining company, headquartered in Vancouver, Canada. The bulk of the Company’s revenue is generated from base-metals mining 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 Santander mine in Peru. In addition, Trevali owns the Caribou mine, Halfmile and Stratmat properties and the Restigouche deposit in New Brunswick, Canada, and the past producing Ruttan mine in northern Manitoba, Canada. The Caribou mine was placed on care and maintenance on March 26, 2020; on January 15, 2021, the Company announced that the operations were being restarted with first payable zinc production expected by the end of March 31, 2021. 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 the Company 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 ( and to Canadian regulatory filings on SEDAR at





In November 2019, Trevali launched the T90 business improvement program which 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 benefits under the program have been accelerated and expanded.


During Q4 2020, the Company continued its efforts to transform the business through the implementation and acceleration of the T90 program and additional one-time cost reductions. In response to market conditions as a result of the COVID-19 pandemic, the T90 business program was accelerated and is now expected to reach an AISC1 of $0.90 per pound by the beginning of 2021, a full year earlier than originally planned. The program is forecast to deliver $51 million of recurring annualized efficiencies, of which $35 million was delivered in 2020.


Improvements delivered by the T90 program during Q4 2020 reduced AISC1 by approximately $0.09 per pound and increased Adjusted EBITDA1 by approximately $7 million. For the 2020 year, the T90 program reduced AISC1 by approximately $0.08 per pound and increased revenues and Adjusted EBITDA1 by approximately $5 million and $29 million, respectively.





Production 2020 2019 YoY Q4’20 Q3’20 Q4’19 Q4’20
Ore mined t 2,399,931 3,150,423 –24% 567,071 558,044 790,927 2% –28%
Ore milled t 2,376,829 3,234,358 –27% 560,898 532,033 822,278 5% –32%
Zinc head grade 8.1% 8.0% 1% 8.1% 8.5% 7.8% –5% 4%
Lead head grade 1.2% 1.5% –20% 1.4% 1.1% 2.0% 27% –30%
Silver head grade (ozs/t) 1.0 1.4 –29% 0.8 0.9 1.3 –11% –38%
Zinc recovery 88.2% 87.2% 1% 88.9% 88.3% 88.2% 1% 1%
Lead recovery 73.4% 67.2% 9% 75.7% 77.3% 69.5% –2% 9%
Silver recovery 51.4% 46.2% 11% 61.9% 49.9% 47.4% 24% 31%
Zinc payable Mlbs 313.0 417.4 –25% 74.2 74.1 104.8 0% –29%
Lead payable Mlbs 29.9 50.3 –41% 8.4 6.1 13.8 38% –39%
Silver payable Moz 0.8 1.5 –47% 0.3 0.1 0.4 200% –25%
Cost per unit
C1 Cash Cost1 $/lb 0.90 0.88 2% 0.87 0.81 0.86 7% 1%
AISC1 $/lb 1.02 1.01 1% 0.97 0.91 1.02 7% –5%


Consolidated quarterly production remained consistent with the prior quarter at 74.2 million pounds of payable zinc but decreased by 29% as compared to Q4 2019 as Caribou’s operations were on care and maintenance during 2020.


C1 Cash Cost1 and AISC1 for Q4 2020 both increased by 7% as compared to Q3 2020 primarily due to increased costs related to higher sales volumes through the reduction in inventories and increased distances to destination ports, both of which result in higher smelting and refining costs, which were partially offset by one of two annual lead shipments at Rosh Pinah.



2020 2019 YoY Q4’20 Q3’20 Q4’19 Q4’20
Revenues $ 212,884 386,110 –45% 68,086 50,157 91,466 36% –26%
Zinc payable sales Mlbs 303.5 440.1 –31% 74.8 65.3 110.4 15% –32%
Average zinc LME price $/lb 1.03 1.16 –11% 1.19 1.06 1.08 12% 10%
EBITDA1 $ (198,664) 71,787 –377% (34,832) 15,368 19,611 –327% –278%
Adjusted EBITDA1 $ 18,960 106,864 –82% 20,101 11,214 20,364 79% –1%
Net (loss) income $ (245,606) (35,411) 594% (51,742) 1,122 (3,833) –4712% 1250%
Loss per share basic and


$ (0.30) (0.04) 650% (0.06) 0.00 (0.02) –100% 200%
Adjusted (loss) earnings

per share1

$ (0.03) 0.00 –100% 0.00 0.00 0.00 0% 0%


The increase in revenues in Q4 2020 to $68.1 million is attributable to the 12% increase in zinc price as compared to Q3 2020 as well as the 15% increase in payable sales volumes as a direct result of the timing of shipments.


Q4 2020 Adjusted EBITDA1 of $20.1 million improved from $11.2 million in Q3 2020 due primarily to the increase in revenues. The $56.8 million difference between EBITDA1 and Adjusted EBITDA1 during Q4 2020 is primarily due to the $43.6 million impairment of property, plant and equipment at the Santander mine and a $7.3 million mark-to-market loss on financial instruments.


Market Outlook


Management of the Company believes that the outlook for the zinc market has improved after ending a volatile year with the zinc price up over 50% from the lows the commodity experienced in the spring. Looking back, the rapid outbreak of the COVID-19 pandemic caused a contraction to concentrate supply as mining operations curtailed production in response to the virus. It was not until the end of June that the majority of mining operations that were suspended to control the spread of COVID-19 were in the process of restarting, however, flare-ups of COVID-19 at individual mines and an ever-changing response by various national governments continue to put strain on the concentrate supply chain.


Global smelting production was also materially impacted in the year however this was mainly limited to the first quarter of 2020 as production capacity in Asia largely recovered to pre-COVID-19 levels early in the second quarter. This imbalance between the supply of concentrate from miners and the demand from smelters led to a deficit in concentrate for the full year of 2020.


This concentrate deficit throughout the year led to a significant reduction in spot zinc concentrate treatment charges which trended significantly below the annual benchmark reported in March at $300 per tonne. Trevali’s concentrate off-take agreements reference the annual benchmark treatment charges. In January 2021, the average imported zinc spot treatment charge for the month was reported to be $70 per tonne, which is an important indicator in setting the annual benchmark which is expected to be set lower for the year 2021.


Demand for refined zinc was also impacted by COVID-19 as early into the pandemic global manufacturing was disrupted as factories were temporarily shutdown to contain the spread of the virus. However, this demand disruption was short lived as factories reopened to normal operating levels and economic activities were stoked by government infrastructure stimulus spending which began in Asia and is expanding to the rest of the world as governments implement similar infrastructure stimulus programs.


During Q4 2020, the London Metals Exchange zinc price averaged $1.19 per pound, continuing its improvement from its year low of $0.82 per pound reached back in March. We expect that the continued disruption to mine production will continue to provide fundamental support for zinc prices in the midterm as management believes demand will outweigh supply as global economic activity accelerates.


At the end of January 2021, total global exchange inventories decreased by 30,000 tonnes to 231,000 tonnes or an estimated 6 days of global consumption, compared to the end of Q3 2020. This inventory level is well below historical averages of 18 days of global consumption and is also supportive of higher zinc prices.




Between March and August 2020, the Company obtained waivers of the financial covenants under the terms of its revolving credit facility to August 31, 2020. On August 6, 2020, further amendments to the Facility and a new credit facility with Glencore Canada Corporation, an affiliate of the Company’s largest shareholder, Glencore plc were announced.


On August 25, 2020, the Company announced a positive pre-feasibility study for Rosh Pinah Mine Expansion which presented a mine plan to increase production capacity at Rosh Pinah by 86% and significantly reduce operating costs.


On August 28, 2020, the Company announced that Matthew Quinlan was departing as Trevali’s Interim Chief Financial Officer and Brendan Creaney, the then Vice President of Investor Relations, had been appointed Interim CFO.


On September 4, 2020, the Company announced the appointments of Nick Popovic and Aline Cote to its Board of Directors of the Company, replacing Chris Eskdale and Dan Myerson as Glencore nominees.


In October 2020, the Company entered into zinc price forward swaps for approximately 25% of forecast zinc production for six months from October 1, 2020 to March 31, 2021 at an average price of $1.11 per pound. In addition, in order to provide downside zinc price protection, zinc price put options for approximately 25% of forecast zinc production across the group were entered into for the same six-month period at $1.04 per pound.


On October 9, 2020, the Company filed a preliminary short form base shelf prospectus related to the sale of up to C$100.0 million in aggregate, in one or more series or issuances of: common shares, debt securities, subscription receipts, share purchase contracts, warrants or units. The Company intends to use the net proceeds for general corporate and working capital purposes, including advancing work on the Rosh Pinah RP 2.0 expansion project and its associated feasibility study, undertaking additional exploration work, continuing the study and potential restart of the Caribou operation, and repaying amounts of the Company’s indebtedness.


On November 24, 2020, the Company entered into a fixed pricing arrangement pursuant to its existing offtake agreement with Glencore for 59.5 million pounds of zinc allocable to production at Perkoa and Rosh Pinah. The tenure of the arrangement is for a nine-month period covering April 2021 to December 2021 at a price of $1.23 per pound and extends the existing hedging program which covers the period October 2020 to March 2021.


On December 2, 2020, the Company closed its marketed offering of 186,530,000 units at a price of C$0.185 per unit for aggregate gross proceeds of $26.6 million (C$34.5 million), which included the exercise of the full amount of the over-allotment option of 24,330,000 units. Each unit is comprised of one common share and one-half of one common share purchase warrant entitling the holder thereof to acquire one common share at a price of C$0.23 until June 2, 2022. Glencore plc exercised its pre-emptive participation rights in the offering to purchase 49,000,000 units.


On December 10, 2020, the Company announced the appointment of Brendan Creaney as the permanent CFO.


On January 15, 2021, the Company announced the planned restart of its Caribou mine which has been on a care and maintenance program since March 2020. The Company has reduced its exposure to commodity price fluctuations during the initial two-year plan by entering into a 21-month fixed-pricing arrangement for 115 million pounds of payable zinc production from Caribou, at an average price of $1.25 per pound.


On January 18, 2021, the Company announced the appointment of Jeane Hull to its Board of Directors.


On January 18, 2021, the Company announced preliminary 2020 full year and Q4 production results and 2021 operating, capital and exploration expenditure guidance.

1 See “Use of Non-IFRS Financial Performance Measures”.



Posted February 25, 2021

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