Tuesday May 19, 2015, 4:10pm PDT
By Charlotte McLeod+ - Exclusive to Zinc Investing News
Zinc-focused base metals miner Trevali Mining (TSX:TV,OTCQX:TREVF) has had a busy week. It was included on OTC Markets Group’s 2015 OTCQX Best 50 list this past Wednesday, then released its Q1 financial results the next day.
The company’s good fortune continued this week with Tuesday’s announcement that mill commissioning has started at its New Brunswick-based Caribou zinc-lead-copper-silver-gold project. Though the news didn’t positively affect Trevali’s share price — it was down 4.31 percent, at $1.11, on the TSX at close of day Tuesday — it’s a step in the right direction for the company and has garnered positive attention from analysts.
Lessons from Santander
As Trevali points out in Tuesday’s release, this isn’t the first time it’s commissioned a mine — it owns the Peru-based Santander mine, which is currently in production, and went through the process there back in 2013. Its plan is thus to use lessons learned there to make commissioning at Caribou go as smoothly as possible.
In brief, the company’s strategy is as follows:
Begin commissioning with low-grade material as the grinding and flotation circuits are brought up to spec. Flotation and concentrate production will initially focus on the zinc and lead circuits, which are already established, with copper circuit commissioning starting later in 2015.
Mobilize the senior metallurgical consultant to the site when sufficient operational data is obtained. Trevali sees that happening potentially in July or August of this year. Because Trevali is partnered with Glencore (LSE:GLEN), Australian IsaMill specialists will be available to help the company at this stage.
Build a stockpile of concentrate on site prior to shipping the material to Glencore at its Belledune smelting complex. Shipping will tentatively take place in late Q2 or early Q3 2015; concentrate trucking has already been tendered and awarded.
Underground mining is also already taking place at Caribou, and Trevali has so far produced a “75,000-tonne surface mineralized mill-feed stockpile” from underground development and production stopes. A further 28,000 tonnes of mill feed have been drilled and are “readily available for blast and mucking through the new ramp system.”
In a note released Tuesday afternoon, Stefan Ioannou of Haywood Securities states that commissioning at Caribou will likely be followed by a ramp up to full-scale production of 3,000 tonnes per day by the end of 2015. Commercial production is anticipated early in 2016, and the mine will ultimately put out 93 million pounds of zinc a year. Investors can also expect some drilling to take place at Caribou this year — CEO Mark Cruise said in a conference call last week that a 10,000-meter program will happen towards H2 2015/H1 2016.
That’s impressive enough, but it’s also worth noting that Trevali has other work on the go as well. According to Cruise, a 6,000-meter underground drill program is set to take place at Santander this year. Furthermore, a resource estimate is in the works for the Stratmat deposit, with a preliminary economic assessment on a joint Halfmile-Stratmat mining solution to follow.
With all of those projects in the works, investors interested in zinc would do well to keep an eye on Trevali. Haywood has set a target price of $1.35 for the company and has a “buy” rating on the stock.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Trevali Mining is a client of the Investing News Network. This article is not paid-for content.