Trevali Mining Corporation (TSX:TV,BVL:TV,OTCQX:TREVF,FWB:4TI) has closed an agreement to sell its 100 percent owned Tingo run-of-river hydroelectric station in Peru to Volcan Compañía Minera S.A. for US$13.5 million. Through this agreement, Trevali has strengthened its balance sheet, monetizing Tingo, a non-producing, non-core asset towards its main business of mine development and metal production.
As quoted in the press release:
Trevali has a power purchase agreement (“PPA”) in place for its Santander Mine from SN Power at a price of $0.06 per kilowatt hour (plus transmission charges of $0.02 per kilowatt hour) off the Peruvian National Energy Grid. Trevali also retains a long-term agreement with Volcan for power off-take rights, once the current PPA expires on December 31st, 2016, for future power generation from Tingo maintaining the same Peruvian industry standard price conditions. Trevali has also executed a transmission services agreement to use the existing transmission line from the National Grid to the Santander Mine and reserve use for the future transmission line that will connect the new Tingo hydroelectric station to Santander.
Trevali CEO, Dr. Mark Cruise, said:
The sale of our Tingo hydroelectric station provides Trevali with practical monetization of a non-core asset and will boost the Company’s working capital position. Given the competitive strategic power agreement we have in place and Management’s focus on mining operations, it was prudent to strengthen our balance sheet as we continue to optimize metal production from our Santander Mine in Peru and advance our Caribou Mine in New Brunswick towards operation.
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