Trevali Announces First Quarter 2014 Financial Results
VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 15, 2014) -
Trevali Mining Corporation ("Trevali" or the "Company")
(TSX:TV)(OTCQX:TREVF)(LMA:TV)(FRANKFURT:4TI) has released its
financial results for the three months ended March 31, 2014 ("Q1"),
posting income from operations of $3.9 million from its Santander
Mine in Peru on concentrate sales revenue of $24.1 million, and net
income of $0.6 million.
Trevali will hold a conference call on May 16, 2014, at 10:30
a.m. Eastern Time (7:30 a.m. Pacific Time) to discuss these
results. Call-in details are provided at the end of this release.
This release should be read in conjunction with Trevali's unaudited
condensed consolidated financial statements and management's
discussion and analysis for the three months ended March 31, 2014,
which is available on Trevali's website and on SEDAR. All financial
figures are in Canadian dollar unless otherwise stated.
"With the successful achievement of Commercial Production at
Santander during Q1, these inaugural results show profitable
operations at the mine, with key metrics such as mill performance
and production figures all in line with or ahead of our full year
guidance," stated Dr. Mark Cruise, Trevali's President and CEO.
"Optimization of both our processing and mining operations remains
ongoing as we strive to increase efficiencies, metal production and
revenues."
Q1-2014 Results Highlights:
- Commencement of Commercial Production at the Santander
zinc-lead-silver mine in Peru
- Concentrate sales revenue of $24.1 million
- Income from Santander operations of $3.9 million
- Net income of $0.6 million
- Production of 14.6-million payable pounds of zinc, 5.4-million
payable pounds of lead and 268,600 payable ounces of silver at a
site cash cost(4) of US$0.33 per pound of payable Zinc Equivalent
("ZnEq")(1) produced
- Realized selling prices for zinc, lead and silver of US$0.92
per pound, US$0.97 per pound and US$20.44 per ounce
respectively
- EBITDA(3) of $4.5 million
- Cash and cash equivalents on hand of $27.6 million
Summary Financial
Results for the Quarter ($ millions except per-share amounts)
|
Three months ended March 31, |
|
|
2014 |
2013 |
|
Revenues |
$ |
24.1 |
n/a |
|
Income from Santander mining operations |
|
3.9 |
n/a |
|
Net income (loss) |
|
0.6 |
(1.3 |
) |
Basic Income per share |
|
0.00 |
(0.01 |
) |
Q1-2014 Santander
Mine Production Statistics
|
|
Q1-2014 |
|
Tonnes mined |
|
156,030 |
|
Tonnes milled |
|
173,820 |
|
Average head grades: |
|
|
|
|
Zinc |
|
4.76 |
% |
|
Lead |
|
1.90 |
% |
|
Silver |
|
1.97 oz/ton |
|
Average recoveries: |
|
|
|
|
Zinc |
|
87 |
% |
|
Lead |
|
86 |
% |
|
Silver |
|
74 |
% |
Concentrate produced DMT (dry metric tonnes): |
|
|
|
|
Zinc |
|
15,640 |
|
|
Lead-Silver |
|
4,510 |
|
Payable metal production: |
|
|
|
|
Zinc (pounds) |
|
14,597,890 |
|
|
Lead (pounds) |
|
5,466,350 |
|
|
Silver (troy ounces) |
|
268,600 |
|
Site cash cost(4) per ZnEq(1) lb Payable Produced |
|
USD$0.33 |
|
Total cash cost(4) per ZnEq(1) lb Payable Produced |
|
USD$0.69 |
|
Cash cost per tonne milled |
|
USD$50.18 |
|
Concentrate Sales Revenue (millions) |
$ |
24.1 |
|
Income from Mining Operations (millions) |
$ |
3.9 |
|
Q1-2014 Santander
Mine Sales Summary
Zinc Concentrate (DMT) |
13,790 |
Lead Concentrate (DMT) |
4,330 |
Payable Sold Zinc (lbs) |
12,696,380 |
Payable Sold Lead (lbs) |
5,196,480 |
Payable Sold Silver (ozs) |
249,425 |
Total Concentrate Revenues |
USD$21,849,500 |
Average Realized Metal Price: |
|
|
Zinc (per lb) |
USD$0.92 |
|
Lead (per lb) |
USD$0.97 |
|
Silver (per oz) |
USD$20.44 |
Zinc Equivalent Payable lbs Sold(2) |
23,657,000 |
Zinc Equivalent Payable lbs Produced(1) |
26,244,980 |
(1) |
ZnEq Payable Pounds Produced = ((Zn Payable
lbs Produced x Zn Price)+(Pb Payable lbs Produced x Pb Price)+(Cu
Payable lbs Produced x Cu Price)+(Au oz Payable Produced x Au
Price)+(Ag oz Payable Produced x Ag Price))/Zn Price. |
(2) |
ZnEq Payable Pounds Sold = ((Zn Payable lbs
Sold x Zn Price)+(Pb Payable lbs Sold x Pb Price)+(Cu Payable lbs
Sold x Cu Price)+(Au oz Payable Sold x Au Price)+(Ag oz Payable
Sold x Ag Price))/Zn Price. (All metal prices are the average
realized metal price for the period) |
(3) |
EBITDA (earnings before interest, taxes,
depreciation and amortization) is calculated by considering
Company's earnings before interest payments, tax, depreciation, and
amortization are subtracted for any final accounting of its income
and expenses. The EBITDA of a business gives an indication of its
current operational profitability and is a NON-IFRS measure. |
(4) |
Refer to Non-IFRS Measures in the March 31,
2014 Management Discussion and Analysis |
Santander Operations
Production:
In the first quarter of 2014, the Company's Santander mine
produced 14.6-million payable pounds of zinc, 5.4-million payable
pounds of lead and 268,600 payable ounces of silver at a site cash
cost of US$0.33 per pound of payable ZnEq produced.
Average recoveries for the quarter were 87% for zinc, 86% for
lead and 74% for silver reflecting ongoing optimization and
improvements over Q4-2013 mill performance. Q1-2014 throughput at
the 2,000-tonne-per-day-rated Santander processing complex was
173,820 tonnes, delivering a mill utilization factor of 99.8%.
Average head grades of 4.76% Zn, 1.9% Pb and 1.97 oz/ton Ag were
realized to produce approximately 15,640 tonnes of zinc concentrate
and 4,510 tonnes of lead-silver concentrate.
The Company will continue to optimize surface, processing plant
and underground operations during the forthcoming quarters in order
to maximize operational efficiencies.
Guidance:
2014 annual production guidance at Santander is estimated at
approximately 670,000 to 690,000 tonnes of mill throughput, with
average head grades estimated at 4.0% to 4.2% zinc, 1.5% to 1.7%
lead and 1.4 oz/ton to 1.6 oz/ton silver to produce, in payable
metals, 42-45 million pounds of zinc; 15-17 million pounds of lead
and 700,000 to 720,000 ounces of silver. (Please see Cautionary
Note Regarding on Forward Looking Statements at the end of this
document.)
Exploration:
An approximately 5,000 metre, predominantly underground, drill
program is also planned during the year at Santander in order to
convert inferred tonnes to a higher confidence category and to
continue to define and potentially expand the newly discovered Rosa
lead-silver-zinc zone to depth.
New Brunswick Operations
Caribou:
In Canada, detailed engineering and associated work programs at
the Caribou Mine and Mill continue to progress. Metallurgical test
work examining the feasibility of adding a copper recovery circuit
to the Caribou Mill is complete. These studies were incorporated
into an independent PEA study announced on May 12, 2014. Upon
receipt of final approvals and successful closure of a long term
debt facility, the Company plans to restart its Caribou mining and
milling operations in New Brunswick.
Stratmat:
During the quarter, 9,145 metres of diamond drilling was
completed on the Stratmat Property. The program consisted of 13
holes and targeted the historic S1 Zones with the purpose of
increasing confidence in the resource and potentially converting
the Inferred Resource to a higher confidence category. Drilling is
ongoing and results will be released upon receipt.
Financial Results
During the three months ended March 31, 2014, the Company
recorded a net income of $611,000 compared to a loss of $1,275,000
in the same period of the prior year, or a gain of $0.00 per share
(2013 - loss of $0.01). The majority of the increase in operating
income is due to the revenues net of cost of sales recorded at the
Company's Santander mine.
Revenues of $24,113,000 (2013 - $Nil) due to the sale of 13,790
tonnes of zinc concentrates containing 14.6 million pounds of
payable zinc and 4,330 tonnes of lead-silver concentrates
containing 5.5 million pounds of payable lead and 268,600 ounces of
payable silver. Provisional realized commodity prices in USD were
$0.92 per pound zinc, $0.97 per pound lead and $20.44 per ounce
silver at a US to CAD foreign exchange of 1.105. There were no
revenues in the prior period.
Total mine operating expenses of $20,257,000 (2013 - $Nil)
related to the sale of concentrate to Glencore. Costs consisted of
direct site production costs of $9,624,000 related to mining,
milling and camp, lab and surface maintenance facilities. Smelting,
refining and freight costs were $7,471,000 and royalty expense were
$481,000. The Company also charged $2,681,000 of depreciation and
amortization. There were no such operating costs in the prior
comparable period.
Q1-2014 Financials Conference Call:
Trevali will host a conference call and audio webcast at 10:30
a.m. Eastern Time on Friday, May 16, 2014, to review the financial
results. Participants are advised to dial in 5-to-10 minutes prior
to the scheduled start time of the call.
Conference call dial-in details:
Toll-free (North America): 1-800-769-8320
Toronto and international: 1-416-340-8530
Audio Webcast: http://www.gowebcasting.com/5537
ABOUT TREVALI MINING CORPORATION
Trevali is a zinc-focused base metals mining company with
operations in Peru and Canada.
In Peru, the Company is actively operating its wholly-owned
Santander underground zinc-lead-silver mine and 2,000-tonne-per-day
metallurgical plant, and producing zinc and lead-silver
concentrates.
In Canada, Trevali owns the Caribou mine and mill, Halfmile mine
and Stratmat polymetallic deposit all located in the Bathurst
Mining Camp of northern New Brunswick. Initial trial production
from the Halfmile underground mine was successfully undertaken in
2012 and the Company anticipates commencing operations at its
3,000-tonne-per-day Caribou Mill Complex in 2015.
All of the Company's deposits remain open for expansion.
The common shares of Trevali are listed on the TSX (symbol TV),
the OTCQX (symbol TREVF) and on the Lima Stock Exchange (symbol
TV). For further details on Trevali, readers are referred to the
Company's web site (www.trevali.com) and to Canadian regulatory
filings on SEDAR at www.sedar.com.
On Behalf of the Board of Directors of TREVALI MINING
CORPORATION
Mark D. Cruise, President
This news release contains "forward-looking statements" within
the meaning of the United States private securities litigation
reform act of 1995 and "forward-looking information" within the
meaning of applicable Canadian securities legislation. Statements
containing forward-looking information express, as at the date of
this news release, the Company's plans, estimates, forecasts,
projections, expectations, or beliefs as to future events or
results and the company does not intend, and does not assume any
obligation to, update such statements containing the
forward-looking information. Such forward-looking statements and
information include, but are not limited to statements as to: the
accuracy of estimated mineral reserves and resources, anticipated
results of future exploration, and forecast future metal prices,
anticipated results of future electrical sales and expectations
that environmental, permitting, legal, title, taxation,
socio-economic, political, marketing or other issues will not
materially affect estimates of mineral reserves. These statements
reflect the Company's current views with respect to future events
and are necessarily based upon a number of assumptions and
estimates that, while considered reasonable by the Company, are
inherently subject to significant business, economic, competitive,
political and social uncertainties and contingencies.
These statements reflect the Company's current views with
respect to future events and are necessarily based upon a number of
assumptions and estimates that, while considered reasonable by the
company, are inherently subject to significant business, economic,
competitive, political and social uncertainties and contingencies.
Many factors, both known and unknown, could cause actual results,
performance or achievements to be materially different from the
results, performance or achievements that are or may be expressed
or implied by such forward-looking statements contained in this
news release and the company has made assumptions and estimates
based on or related to many of these factors. Such factors include,
without limitation: fluctuations in spot and forward markets for
silver, zinc, base metals and certain other commodities (such as
natural gas, fuel oil and electricity); fluctuations in currency
markets (such as the Peruvian sol versus the U.S. dollar); risks
related to the technological and operational nature of the
Company's business; changes in national and local government,
legislation, taxation, controls or regulations and political or
economic developments in Canada, the United States, Peru or other
countries where the Company may carry on business in the future;
risks and hazards associated with the business of mineral
exploration, development and mining (including environmental
hazards, industrial accidents, unusual or unexpected geological or
structural formations, pressures, cave-ins and flooding); risks
relating to the credit worthiness or financial condition of
suppliers, refiners and other parties with whom the Company does
business; inadequate insurance, or inability to obtain insurance,
to cover these risks and hazards; employee relations; relationships
with and claims by local communities and indigenous populations;
availability and increasing costs associated with mining inputs and
labour; the speculative nature of mineral exploration and
development, including the risks of obtaining necessary licenses
and permits and the presence of laws and regulations that may
impose restrictions on mining,; diminishing quantities or grades of
mineral reserves as properties are mined; global financial
conditions; business opportunities that may be presented to, or
pursued by, the Company; the Company's ability to complete and
successfully integrate acquisitions and to mitigate other business
combination risks; challenges to, or difficulty in maintaining, the
Company's title to properties and continued ownership thereof; the
actual results of current exploration activities, conclusions of
economic evaluations, and changes in project parameters to deal
with unanticipated economic or other factors; increased competition
in the mining industry for properties, equipment, qualified
personnel, and their costs.
Investors are cautioned against attributing undue certainty or
reliance on forward-looking statements. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated, described or intended.
The Company does not intend, and does not assume any obligation, to
update these forward-looking statements or information to reflect
changes in assumptions or changes in circumstances or any other
events affecting such statements or information, other than as
required by applicable law.
Trevali's production plans at Caribou-Halfmile-Stratmat and
Santander are based only on Indicated and Inferred Mineral
Resources and not Mineral Reserves and do not have demonstrated
economic viability. Inferred Mineral Resources are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as Mineral
Reserves, and there is therefore no certainty that the conclusions
of the production plans and Preliminary Economic Assessment (PEA)
will be realized. Additionally where Trevali discusses
exploration/expansion potential, any potential quantity and grade
is conceptual in nature and there has been insufficient exploration
to define a mineral resource and it is uncertain if further
exploration will result in the target being delineated as a mineral
resource.
We advise US investors that while the terms "measured
resources", "indicated resources" and "inferred resources" are
recognized and required by Canadian regulations, the US Securities
and Exchange Commission does not recognize these terms. US
investors are cautioned not to assume that any part or all of the
material in these categories will ever be converted into
reserves.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in the United
States. The securities described herein have not been and will not
be registered under the United States Securities Act of 1933, as
amended, or the securities laws of any state and may not be offered
or sold within the United States, absent such registration or an
applicable exemption from such registration requirements.
The TSX has not approved or disapproved of the contents of this
news release.
Steve StakiwVice President, Investor Relations andCorporate
Communicationssstakiw@trevali.com(604) 488-1661Direct: (604)
638-5623
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