Trevali Mining Corp. (TV-TSX, TREVF-OTCQX, 4T1-Frankfurt, TV-LMA) on Wednesday tabled positive results from a feasibility study that contemplates an expansion of the company’s Rosh Pinah zinc-lead-silver mine in Namibia.
If the project proceeds, 30% of the required power would come from solar power, under a 15-year purchase agreement with EMESCO, a South Africa-based clean energy provider.
“The proposed expansion (dubbed RP2.0) will modernize and expand the 50-year-old mine, increasing throughput by 86% and enabling the operation to increase production at a significantly lower operating cost,’’ said Trevali President and CEO Ricus Grimbeek.
“Since providing the results of the expansion pre-feasibility study on August 2020, the team has optimized and de-risked the project, delivering a feasibility study that reaffirms robust project economics, while reducing our carbon intensity and water consumption usage on a per tonne milled basis,’’ he said.
Grimbeek went on to say that in parallel with advancing the technical aspects of the project, the company has had productive discussions with its existing lending syndicate as well as numerous financial institutions on securing project debt financing to minimize equity dilution.
Assuming a positive investment decision, detailed engineering and procurement of long-lead items is expected to commence in the fourth quarter of 2021, with construction expected to commence in mid-year 2022 and commercial production anticipated by mid-year 2024.
The forecast project capital expenditure is $111 million.
On Wednesday, Trevali shares were off $0.01 or 5.1% to 18.5 cents on volume of 671,040. The shares are currently trading in a 52-week range of 27.5 cents and $0.12.
Trevali is a Vancouver-based mining company. The bulk of its revenue is generated from base metals mining at four operations. They are the 90%-owned Perkoa Mine in Burkina Faso, the 90%-owned Rosh Pinah Mine, the wholly-owned Caribou zinc-lead-silver Mine in New Brunswick, and the wholly-owned Santander Mine in Peru.
The company has positioned itself to be a 400-million-pound annual zinc producer with a reduced cost profile until 2022. However, the company recently reduced its 2021 production forecasts. Under the revised guidance, Trevali expects to produce 330-355 million pounds of zinc, 40-44 million pounds of lead, and 888-972,000 ounces of silver.
That is down from an earlier target of 330-360 million pounds of zinc, 45-50 million pounds of lead and 925-1.02 million ounces of silver.
The feasibility study is based on proven and probable reserves of 12.35 million tonnes, containing 1.7 billion pounds of zinc, 370 million pounds of lead, and 7.8 million ounces of silver.
The study envisages average annual zinc production of 135 million pounds at an all-in-sustaining cost of US$0.67 per pound. Average annual lead and silver production is expected to be 23.7 million pounds and 303,000 ounces respectively.