Trevali Mining Corporation (TSX: TV) (BVL: TV) (OTCQX: TREVF) (Frankfurt: 4TI) announced the planned restart of operations at its Caribou mine near Bathurst, New Brunswick. The mine has been on a care and maintenance program since March 2020.
With the implementation of several operational and commercial enhancements, as well as improved zinc market conditions, the Company expects to return to mining in early February 2021, with first payable zinc production expected by the end of March 2021.
Ricus Grimbeek, Trevali’s President and CEO stated, “Our team has worked diligently to reduce the overall cost structure of the Caribou mine, and I am pleased that we are in a position to restart mine operations in a manner that we expect will generate positive cash flow. Our initial two-year plan includes several enhancements which are designed to improve the mine’s economics, including the involvement of a contracted mining operator and the entry into fixed-pricing arrangements for a significant portion of the mine’s forecasted production. We have benefited from the engagement of the provincial government, and with the recall of employees and the restart of production we look forward to being a more significant part of the New Brunswick economy. Looking ahead, we will continue to study the potential to extend our initial mine plan, as well as explore further potential in the Bathurst mining camp.”
Enhanced Caribou Mine Economics
Trevali’s production plan at Caribou is anchored on operational and commercial enhancements that improve the mine’s fundamental economics and support enhanced value for Trevali shareholders:
Caribou Production and Cost Guidance
Production guidance for 2021 is estimated at between 60 – 65 million pounds of payable zinc, 21 – 23 million pounds of payable lead and 585 – 650 thousand ounces of payable silver. First payable zinc production is expected by the end of March 2021. Zinc payable production is expected to increase to 72 – 77 million pounds of payable zinc in 2022 as the mine receives the benefit of a full year of production.
Cost guidance for 2021 for C1 Cash Cost1 is estimated between $0.79 – $0.84 per pound of zinc and AISC1 is expected to range between $0.91 – $0.97 per pound of zinc. Capital expenditures are forecast at $9 million for 2021 and $2 million for 2022. In the event the mine plan is extended beyond the initial two-year period, further sustaining capital investment will be required.
Table 1: Caribou Production and Costs Guidance
|Units||FY 2021||FY 2022|
|Zinc||Mlbs||60 – 65||72 – 77|
|Lead||Mlbs||21 – 23||23 – 25|
|Silver||Koz’s||585 – 650||575 – 635|
|C1 Cash Cost1||$/lb||0.79 – 0.84||0.83 – 0.89|
|AISC1||$/lb||0.91 – 0.97||0.84 – 0.90|
|(1) See “Non-IFRS Financial Performance Measures”.|
The investment to restart the operation for the period January to February 2021 is estimated to be approximately $7 million and consists of both capital and operating costs which are excluded from our C1 cash cost1 and AISC1.
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.
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