Trevali Mining Corp. – North and South American Silver-Lead-Zinc Deposits
Overview
Trevali Mining Corp. (TSX:TV,FWB:4TI,OTCQX:TREVF) is a zinc-focused base metals producer with operations in Canada and Peru – the Halfmile and Santander mines respectively. In Canada, Trevali owns the Halfmile zinc-lead-silver mine and Stratmat polymetallic deposit, and has entered into a definitive agreement to acquire the Caribou Mine and Mill, all located in the Bathurst Mining Camp of northern New Brunswick. The Company also has the past-producing Ruttan copper-zinc mine in northern Manitoba. Initial production from the Halfmile mine commenced in early 2012 and development is ramping up to achieve a planned production rate of at least 2,000-tonnes-per-day to feed planned processing operations at the Company’s Caribou Mill Complex (subject to closure of its acquisition).
In Peru, the Company has the Santander zinc-lead-silver mine and the former-producing Huampar silver mine, both located in the Central Peruvian Polymetallic Belt. Mine construction at the Santander operation has recently been completed with ramp up to full 2,000-tonnes-per-day production to follow in late Q2, 2013. Additionally through its wholly-owned subsidiary, Trevali Renewable Energy Inc., Trevali is undertaking a significant upgrade of its wholly-owned Tingo run-of-river hydroelectric generating facility along with transmission line upgrades and extensions to allow, in addition to supplying power to the mining operation on the property, the potential sale of surplus power into the Peruvian National Energy Grid.
Investment Highlights
- Production anticipated to grow to approx. 400 million lbs/yr ZnEQ in 2014
- Multiple production platforms – advanced project pipeline (Ag, Au, Cu, Zn, Pb)
- Excellent potential to increase the current contained NI43-101 indicated
- Wholly-owned hydroelectric power subsidiary in Peru
- Proven management team with strong partners & business alliances
Key Projects
Santander Mine – West Central Peru
The 4,455 hectare Santander Mine property contains numerous outcropping polymetallic mineralized bodies: Magistral North, Central, South, Puajanca South and the Santander Pipe. The Magistral North, Central, and South deposits are all new discoveries hosted in favorable carbonate lithologies and located a few kilometers Northwest of and along the same structural trend hosting the past producing Santander ore body that was mined from 1958 until 1992.
Trevali Mining Corporation announced the results of its 2012 independent National Instrument 43-101 mineral resource estimate update for the Santander zinc-lead-silver mine project in west-central Peru. The 2011 drill program successfully defined an additional inferred resource of 9.04 million tonnes at a 3% ZnEQ* cut-off, beneath the 2010 Magistral Central and South deposits and within the formerly-producing Santander Pipe deposit .
With key permits already in place, Trevali plans zinc-lead-silver production a rate of 2,000 tonnes-per-day with an anticipated production expansion to 4,000 tonnes-per-day in 2013/14.
Trevali Mining Corp. has a strategic partnership with Glencore International AG that are providing the 2,000 tonne-per-day processing plant, contract mining and manpower, and will receive a life-of-mine metals concentrate offtake agreement greatly mitigating both financial and technical risks. Trevali Mining Corp retains 100 percent ownership of the project and also plans to acquire ownership of Glencore’s processing plant via a toll charge over the initial 4 years of operation. Due to significant silver and lead credits plus low-cost hydroelectric power, Trevali Mining Corp. anticipated that Santander would be a low cost zinc producer.
Trevali Renewable Energy Inc., a fully owned subsidiary of Trevali Mining Corp., will provide the Santander Mine site with inexpensive and reliable power from the Tingo hydroelectric generating facility approximately 17 km down-valley to the West and already connected to the mine site. Trevali is planning a major upgrade of the power station from its present production capacity of 1.6 megawatts (MW) to approximately 8.8 MW and 10 MW during the wet season. As mine production (at 2,000 tonnes-per-day) at Santander is estimated to require approximately 4 to 5 MW of power consumption, the excess power can be sold to third parties via the Peruvian National Energy grid to generate potential additional cash flow to Trevali.
Halfmile – New Brunswick, Canada
Trevali Mining Corp acquired the Halfmile project through its merger/acquisition of Kria Resources in early 2011. The Halfmile Project is a polymetallic massive sulphide (lead-zinc-copper-silver) deposit located in the Bathurst base metal camp of northeast New Brunswick. The property is situated approximately40 kilometres from Xstrata’s world-class Brunswick 12 mine.
Previous exploration was carried out on Halfmile by Xstrata Zinc and other companies in the 1960s. In February 2009, an NI 43-101 compliant resource estimate was created for the Halfmile property which revealed an indicated resource of 6.26 million tonnes at 8.13% zinc, 2.58% lead, 0.22% copper and 30.78 g/t silver. An additional inferred resource for the property revealed 6.08 million tonnes at 6.69% zinc, 1.83% lead, 0.14% copper and 20.51 g/t silver; all resources are open and used a 5.0% capped zinc equivalent cut-off grade.
In June 2012, the company announced the results of the final metallurgical report. The report stated that Halfmile mineralization exhibits superior flotation characteristics and use less reagent to produce concentrates of similar to slightly superior quality to those traditionally produced in the Bathurst Mining Camp.
The initial 30,000-tonne Halfmile mineral processing run occurred over a 4-day period and the results demonstrated a steady improvement with time as the various processing circuits achieved steady-state and the operators obtained a better understanding of the new mineral type. The results are posted on the company’s website.
Production is anticipated to increase to 4,000 tpd by 2013 for an additional 17 years based on the currently defined Halfmile and Stratmat mineral resources. As well, potential production from Caribou deposit is anticipated to facilitate either longer LOM and/or higher production rate.
Ruttan Project – Northern Manitoba, Canada
The Ruttan Project is a copper-zinc massive sulphide deposit located approximately 21 km east of the village of Leaf Rapids, which in turn is approximately 750 km north-northwest of Winnipeg, Manitoba, Canada. The property is accessible by all-weather roads.
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In July 2012, Trevali Mining made the final option payment to acquire a 100% interest in the past-producing Ruttan Copper Deposit in northern Manitoba.
The Ruttan deposit contains a NI-43-101 compliant inferred resource of 19.75 million tonnes of 1.17% Cu, 1.47% Zn and remains open for expansion to depth, beneath previous mine workings, and in the hanging and footwall zones. Discovered in 1968, the Ruttan Mine operated from 1973 to 2002 and historic production has been reported to be approximately 55 million tonnes grading 1.23% copper (Cu) and 1.41% zinc (Zn).
An airborne VTEM survey was conducted on the Ruttan and Bill Claims in 2008 and there are a number of targets to follow up on confirming the property has excellent exploration potential. The upper section of the West Anomaly near surface holds potential for discovering additional resources.
Current information suggests the presence of a significant mineralized zone. The DAR 2 zone (Bill 5025 Claims) located 12 km south of the Ruttan Mine represents additional potential at a shallow depth. The zone has a strike length of 250 metres, a depth of 250 metres and a thickness of 2 to 10 metres. A detailed review of historical data will be conducted to determine the potential for further exploration opportunities within the property.
Summary
With the vision to become a leading Mineral Development Company, supported by a culture of teamwork, innovation and integrity, Trevali Mining Corporation has two advanced-stage polymetallic (zinc-lead-silver-copper) deposits in Canada and Peru set to move forward. The company is advancing on their Halfmile and Santander mine projects and the past-producing Ruttan copper-zinc mine in northern Manitoba as well. Production from the Halfmile Mine commenced in early 2012 and will ramp up to a planned production rate of 2,000-tonnes-per-day by Q2, 2013.
In Peru, the Company has the Santander zinc-lead-silver mine project and the former-producing Huampar silver mine, both located in the Central Peruvian Polymetallic Belt. Mine commissioning is anticipated to commence at the Santander operation in mid- 2012, to ramp up to full 2,000-tonne-per-day production shortly thereafter.
Additionally through its wholly-owned subsidiary Trevali Renewable Energy Inc., Trevali is undertaking a significant upgrade of its wholly-owned Tingo run-of-river hydroelectric generating facility along with transmission line upgrades and extensions to allow, in addition to supplying power to the mining operation on the property, the potential sale of surplus power into the Peruvian National Energy Grid.
Management
Dr. Mark Cruise – President, CEO, and Director
A base metal specialist, Mark has extensive global base-metal experience from grassroots exploration through resource definition to production in Europe and the Americas. He completed his Ph.D. on the Irish zinc-lead ore field and was a member of Anglo American’s Lisheen Zinc-Lead Mine feasibility/technical team in Ireland that developed the 4,000 tpd Lisheen Mine.
In 2001, he transferred to Anglo’s Vancouver office, where he held the position of Senior Geologist with responsibility for Anglo’s copper and zinc portfolio, including project generation and implementation in Canada, USA, and Mexico. In 2004, Mark joined Cardero Resources as Vice President, Exploration, with responsibility for Cardero’s Peruvian, Argentinean and Mexican portfolio, including the approximately 850-Mt Pampa de Pongo iron deposit, Peru. In 2008, he joined Trevali where he has been instrumental in the ongoing fast-track redevelopment and planned resumption of production, with partners Glencore International A.G., from three recently discovered deposits at the Santander polymetallic mine project in west-central Peru.
Dr. Anthony (Tony) Holler – Chairman and Director
Dr. Holler brings his expertise in the mergers and acquisitions field to Trevali. Dr. Holler founded and was the Chief Executive Officer of ID Biomedical Corp., where he oversaw product development from research and development through to commercialization. He eventually sold the company to GlaxoSmithKline for approximately $1.7 billion. Similarly, during his tenure as Chairman and Director at Corriente Resources Inc., he oversaw the development of that company’s copper/gold property through bankable feasibility, ultimately selling the company for approximately $700 million.
Mike Hoffman – Director
Mike has over 25 years of mine management experience including mine operations, corporate development and projects. Recently Mike has been a Vice President with Yamana Gold, Desert Sun Mining and Goldcorp and he was previously President & CEO of Crowflight Minerals and Kria Resources. He also currently serves as a director of Crocodile Gold.
Anton Drescher – Director
A Certified Management Accountant, Mr. Drescher has brought his financial and managerial expertise to a number of high-profile companies in both the private and public sectors. Since 1994, he has been Chief Financial Officer and a Director of USA Video Interactive Corp., a public company involved in streaming video and video-on-demand that is listed for trading on the TSX-V and the OTC Bulletin Board. He has also been a director of Dorato Resources Inc., a public mineral exploration company listed on the TSX-V, since 1996; President of Westpoint Management Consultants Limited, a private company engaged in tax and accounting consulting for business reorganizations, since 1979; and President of Harbour Pacific Capital Corp., a private British Columbia company involved in regulatory filings for businesses in Canada, since 1998. Mr. Drescher has been a director of Trevali since 2007.
Charles Melbye – Director
A graduate of Colorado School of Mines with a Geological Engineer-Mining degree, Mr. Melbye brings over 50 years of experience as a mine development expert. Mr. Melbye has held executive positions in numerous world-class mining and exploration companies, notably Anschutz Mining Corp. and the Anaconda Company, where he has demonstrated his expertise in silver, lead, zinc, iron and other industrial minerals in both underground and open-pit settings. Devoting the latest portion of his career to South American mining projects, including Corriente Resources Inc., Mr. Melbye is renowned for his abilities in seeking, acquisition, exploration, and operation of highly successful mining properties.
Dr. Paul Klipfel – Director
Mr. Klipfel completed his Ph.D. in Economic Geology from Colorado School of Mines in 1992 and has over 32 years’ experience of mineral exploration and project development for a wide range of mineral commodities and deposit types in North and South America, Australia, South Pacific, Africa and Asia. He has been a contributor to the discovery process on several major deposits. Recognized as a specialist in structure, alteration and their relation to mineralization, Dr. Klipfel is currently President of Mineral Resource Services Inc., a consulting practice based in Reno, Nevada.
David Huberman – Director
Mr. Huberman is the President of Coda Consulting Corp., a business consulting firm, and has practiced business law from 1972 until 1996 as a senior partner of a Canadian business law firm, specializing in corporate, commercial, banking, securities, regulatory and mining law. From 1997 to 1999, he also served as Executive Vice President and General Counsel of Lions Gate Entertainment Corp.
Mr. Huberman received his B.A. and LL.B. from the University of British Columbia and his LL.M. from Harvard Law School. He was called to the British Columbia Bar in 1960 and was a full time member of the Faculty of Law at the University of British Columbia from 1960 to 1972, specializing in corporate, securities and administrative law.
Dr. Valentin Paniagua Jara – Director
Dr. Paniagua is a partner at the Peruvian law firm Estudio Echecopar, one of Latin America’s leading law groups and head of the firm’s Natural Resources Department. His primary practice areas are: mining, environmental, mergers and acquisitions, and corporate law. He advises Peruvian and international mining companies in connection with a broad range of transactions including corporate mergers and acquisitions; property and mine acquisitions; project finance; option, joint venture and royalty agreements; ore sales and marketing arrangements; and tenure and permitting issues
Peter Meredith – Director
An experienced and well respected mining executive, Mr. Meredith is a Chartered Accountant, a member of the Canadian Institute of Chartered Accountants and the Institute of Corporate Directors. Professionally he spent 31 years with Deloitte & Touche LLP, Chartered Accountants and has extensive experience in regulatory compliance and corporate finance, with an emphasis on public resource companies.
Anna Ladd – CFO
A Certified Management Accountant, Ms. Ladd received a Bachelor of Commerce degree from the University of British Columbia in 1991 and a Masters of Arts in Economics from Queen’s University in 1993. Anna has over 15 years of experience in financing and financial controls in relation to the mining industry from mine controller up to and including responsibility for multiple large scale open pit and underground base and precious metal production units. Anna has served as Vice President Finance and Chief Financial Officer for a number of TSX listed junior mining and development companies in addition to several mid-size to senior gold and base metal producers including Grande Cache Coal’s operations, Kinross Gold Corporation’s Fort Knox, Round Mountain and Kettle River operations and Vale Inco’s Thompson and Sudbury base metal operations.
Paul Keller – Vice-President of Operations
Mr. Keller brings extensive mine operations experience in Canada with 27 years of experience most recently as Manager of Technical Services for a major Canadian mining contractor where he led a team of engineers and designers on various mining contracts for major mining companies. Mr. Keller began his career with Rio Algom Limited and has also worked in various management roles with Barrick Gold’s Hemlo mine in operations, engineering and maintenance. Mr. Keller holds a Bachelor of Engineering/Mining from Laurentian University and is a Professional Engineer.
