Trevali Mining Corp. [TV-TSX, Lima; TREVF-OTCQX; 4T1-FSE] reported preliminary fourth quarter (Q4) and full-year production results for 2021 and provides 2022 operating, capital and exploration expenditure guidance. All financial figures are in U.S. dollars and are unaudited.
Ricus Grimbeek, President and CEO stated, “The company ended 2021 with much to be excited about for 2022 and beyond. We achieved excellent performance from Rosh Pinah and had improved Q4 2021 performance at Perkoa and the recently divested Santander mine, though faced challenges at Caribou which we are working through. We also experienced ongoing issues related to COVID-19 which had an impact on our ability to operate and achieve our targets. Our COVID-19 control measures are holding up well and the experience gained further supports our focus on the health and safety of our workforce and surrounding communities.
The Trevali team has done an excellent job at identifying ways to continue to optimize our operations as we look to minimize the effects of anticipated declining ore grades in 2022. We are focused on safety, operational excellence, disciplined capital allocation, debt reduction and investing in the RP2.0 project at Rosh Pinah (RP2.0).”
The current zinc price of approximately $1.65/lb is roughly $0.29/lb higher than the average observed price in 2021. The higher zinc price environment supports the potential for robust organic cash flow generation and eases the ongoing financing process for RP2.0 as we continue to progress the early works program that we recently began.”
The Caribou Mine was re-started with an initial two-year mine plan with potential to extend the mine life. Pilot testing began at FLSmidth’s Rapid Oxidative Leach Technology at Caribou with results expected to form the basis of a preliminary economic assessment and an NI-43-101 technical report expected to be published in H1 2022.
The company published the Feasibility Study for RP2.0 outlining a planned increase to throughput by 86% and an expected decrease in operating costs.
Trevali closed the sale of the Santander Mine in Peru in December 2021, enabling the company to continue its focus on disciplined capital allocation and the financing of RP2.0.
Total zinc production from operations was 78 million lb for Q4 2021 for total annual production of 322 million lb of payable zinc. Trevali’s 2021 actual production finished below the 330-355 million lb of payable zinc revised guidance range disclosed on August 4, 2021. Accounting for the sale of the 100%-owned Santander mine, which closed December 3, 2021, the results fell slightly short of adjusted guidance (normalized for the sale of Santander) of 325-350 million lb of payable zinc. The production figures are preliminary and subject to final adjustment. The company will further expand on 2021 results, including with respect to cost performance, when it releases 2021 fourth quarter and full year results.
Consolidated production guidance for 2022 is estimated between 247-280 millionlb of payable zinc, 36-41 million pounds of payable lead and 688-778 thousand oz of payable silver. Zinc production is expected to be moderately higher in Q2 and Q3 versus the first and last quarter of 2022 due to scheduling. At each of the three operations, Q1 is anticipated to have the lowest level of production for the year.
Consolidated cost guidance for 2022 for C1 Cash Cost is estimated between $0.85-$0.93/lb of zinc and AISC is expected to range between $1.03-$1.13 per pound of zinc. Capital expenditures for the group is estimated to range between $61-$68 million, consisting of $43 million in sustaining capital, $2 million in exploration capital, and $20 million in expansionary capital at Rosh Pinah and $0.5 million in expansionary capital at Caribou.
The 2022 C1 Cash Costs and AISC guidance reflect an estimated annual zinc treatment charge of $215/tonne, an increase from $159/tonne realized for 2021. For every $20/tonne change in zinc treatment charges there is an impact to C1 Cash Cost and AISC of approximately $0.0/lb of zinc.
Exploration activities in 2022 are designed to focus on extending the mine lives of Perkoa and Rosh Pinah.The 2022 C1 Cash Costs and AISC guidance reflect an estimated annual zinc treatment charge of $215/tonne, an increase from $159/tonne realized for 2021. For every $20/tonne change in zinc treatment charges there is an impact to C1 Cash Cost and AISC of approximately $0.0/lb of zinc.