VANCOUVER (miningweekly.com) – Canadian base metals producer Trevali Mining has posted an operational profit for the third quarter ended September, which it billed as transformative for the company after declaring commercial production at its Caribou mine and mill, in New Brunswick.
The Vancouver-based company posted a net profit of C$2.4-million, or C$0.01 a share, for the quarter, in positive territory when compared with a loss of C$3.4-million, or C$0.01 a share, a year earlier.
Income from mining operations during the period more than doubled quarter-on-quarter to C$10.6-million.
Trevali reported record total concentrate sales revenue of C$57.5-million, up 99% from the second quarter.
“While our Santander mine, in Peru, continues to post strong, consistent results, including very significant exploration upside, we are particularly proud of our Caribou team. In summary, Caribou has overcome both technical and exceedingly challenging financial hurdles during the first half of 2016 to successfully commission the operation.
“This includes posting positive Q3 operational results despite the mine not yet being fully ramped. This is an encouraging indicator of the upside at Caribou as we continue to ramp toward the full nameplate 3 000 t/d operating rate. Caribou has been steadily increasing performance and throughput in Q4 in tandem with strengthening zinc and lead commodity prices,” stated TrevaIi president and CEO Dr Mark Cruise.
STRONG OUTLOOK
Trevali reported that in Peru, the company’s Santander mine was currently in steady state 2 000 t/d nameplate production with daily output commonly exceeding this by about 15% to 20%.
The company’s 2016 Santander production guidance remains at 57-million to 60-million pounds of payable zinc in concentrate grading about 50% zinc and 800 000 oz to 1-million ounces of payable silver.
During the third quarter, the company lowered payable lead guidance to 20-million to 23-million pounds of payable lead in concentrate, grading about 52% to 55%. Lead production was modestly revised downwards as mining operations focused on the zinc-rich Magistral Central and South zones during the quarter and into the first half of 2017. Cash costs remain an estimated $35/t t to $38/t milled.
Owing to positive results, the company has increased the Santander drill programme by a further 3 500 m for the current quarter. The programme is to continue to define and potentially expand the newly discovered Rosa, Fatima and emergent Oyon lead/silver/zinc zones in addition to the Magistral zones, which all remain open for expansion at depth.
In Canada, Trevali remains on track to produce 37-million to 41-million pounds of payable zinc; 14-million to 15-million pounds of payable lead; and 380 000 oz to 420 000 oz of silver in the second half of 2016. Head grades remain unchanged at between 5.9% and 6.2%, 2.5% and 2.7%, and 65 g/t to 70 g/t for zinc, lead and silver, respectively.
Trevali said operating cash costs would be a key focus as the site continued to ramp up to full design levels. Costs are expected to modestly decrease as the company continues to renegotiate longer-term material mining and supplies contracts now that the business unit has transitioned to commercial production status. Normal course operational optimisation and efficiency gains are also expected to positively impact costs as the mine continues to ramp up to full production.
Trevali has commissioned a new independent preliminary economic assessment study by SRK Consulting Engineers at the company’s Halfmile and Stratmat properties, in New Brunswick. The study will examine the potential for a standalone milling solution for the deposits and is expected to be complete in early 2017.
Trevali’s TSX-listed stock on Monday hit a new 52-week high at C$1.17 apiece.