TSX-listed Trevali Mining Corporation has announced the temporary suspension of operating activities at its Caribou mine near Bathurst, in New Brunswick.
The temporary suspensions follow the deterioration of the global zinc market, which has been exacerbated by the continued challenges presented by the spread of Covid-19 across the world.
According to Trevali, these market conditions, combined with high concentrate treatment charges, make mine operations at Caribou uneconomic at this time, and the mine will therefore be put on a care-and-maintenance programme immediately to preserve the value of the mineral resource and mine assets.
No timeline for a potential restart of operations has been defined; however, Trevali’s operations centre in Bathurst, which serves the company’s global mine portfolio, will continue to operate.
CEO Ricus Grimbeek said this was a “difficult but necessary” decision given the market and operating circumstances.
While the operation is paused, Trevali intends to study a multitude of options in the Bathurst region to maximise value and reduce the overall cost structure of Caribou. This also includes the potential to supplement the Caribou mine ore feed from ore deposits within trucking distance of the Caribou mill, metallurgical opportunities which may lead to commercial benefits around copper and gold, and potential for joint ventures with third parties.
One-time costs to place the mine on care and maintenance over the course of April and May are estimated to total about $5-million with the ongoing costs expected to be $500 000 a month on a cash basis to ensure the mine, mill and associated infrastructure are safe and secure, and positioned to restart efficiently when conditions might allow.
The company will be examining the carrying value of Caribou and will provide an update as part of its 2020 first-quarter financial and operating results.
Trevali is withdrawing its current 2020 guidance owing to the suspension of operations at Caribou, as well as the resulting uncertainty caused by Covid-19.
Trevali is, however, currently implementing proactive and reactive mitigation measures to minimise any potential impacts Covid-19 may have on its people, communities, operations, supply chain and finances.
This also includes preserving capital and deferring capital programmes where appropriate, the miner added.
Aligned with the strategy of preserving capital, Trevali also announced that it had cancelled the Normal Course Issuer Bid (NCIB) that started on December 2, 2019, as the company no longer intended to repurchase its common shares.
No common shares were purchased by the company under the renewed NCIB, though under the original NCIB in place from November 19, 2018, to November 18, 2019, 28.6-million common shares was repurchased for cancellation.