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VANCOUVER (miningweekly.com) – Pure-play zinc producer Trevali Mining expects to produce less metal from the Peru-based Santander mine this year, after extreme rainfall during the recent mountain wet season delayed high-grade stope development by a quarter.
The company announced on Thursday that the excessive rainfall during the three months ended June also caused mine and mill production to trend below plan, prompting management to reschedule the mine sequencing, resulting in lower-grade ore, at about 3% zinc, compared with 4.5%, according to plan.
Access to the planned higher-grade stopes has been delayed and planned production during the remainder of the year will not be sufficient to make up the zinc unit deficit, the company advised. Mining of the higher-grade production stopes has been deferred to the first quarter of 2018.
Trevali is completing a substantial upgrade of its pumping infrastructure to facilitate long-range mine planning as the mining fronts transition deeper in the Magistral zones. The higher-capacity pumping system is on track for commissioning in the fourth quarter and is expected to result in reduced power requirements and improve overall mine efficiency once completed.
The company’s Santander mine continues to advance Magistral North ramp development to access the higher-grade zinc/lead/silver mineralisation in the Magistral North and Oyon zones.
The revised 2017 production guidance estimate for the Santander mine includes 52-million to 57-million pounds of payable zinc in concentrate, instead of the previously forecast 63-million to 65-million pounds. Payable lead and silver production at the mine remained unchanged at between 12-million to 14-million pounds and 700 000 oz to 900 000 oz of silver.
Meanwhile, the flagship Caribou mine completed its first full year of commercial production on June 30 and, in conjunction with partners Glencore and other third parties, continues to focus on optimising initiatives.
During the second quarter, the Caribou mine successfully transitioned to owner-operated underground mining and the new Sandvik-supported mine fleet is now essentially fully operational, the company stated, adding that the improved operational efficiencies in the second half of the year should deliver mine cost savings of about $5/t to $6/t going forward.
The 2017 production guidance estimate for the Caribou mine remained unchanged at 90-million to 93-million pounds of payable zinc in concentrate, 30-million to 32-million pounds of payable lead in concentrate, and 800 000 oz to 900 000 oz of payable silver.
Further, Trevali advised that it and consulting engineering firm SRK are finalising work on a new preliminary economic assessment (PEA) study, which examines the feasibility of a combined Halfmile-Stratmat project, also in New Brunswick. Work during 2016 and 2017 included diamond drilling and metallurgical testwork.
The results will be included in the forthcoming PEA, which is expected to be completed in the current quarter.
For the second quarter, Trevali more than doubled revenues to $47-million, when compared with the same period a year earlier. Net income before income tax rose two-thirds year-on-year to $2.5-million, as both metrics reflect the impact of the Caribou mine’s first full year of operations.
Trevali reported consolidated output of 43.5-million zinc equivalent payable pounds, compared with 24.24-million pounds a year earlier.
The company’s TSX-listed shares have gained 14% since the start of the year, giving investors exposure to zinc’s 29% price increase to $2 938/t over the same time frame.