Trevali Mining’s African Acquisitions Boost Zinc Output in Q1

Trevali Mining (TSX:TV) has reported significant increases in production and sales in Q1 2018 over the same time last year.

The Canadian zinc miner produced 98,738,944 pounds of zinc concentrate in the first quarter, up from 31,946,229 pounds in Q1 2017 — an increase of over 200 percent.

The addition of two African mines in August last year bolstered the impressive quarterly numbers, with the Rosh Pinah mine in Namibia producing 22,831,575 pounds and the Perkoa mine in Burkina Faso producing 45,874,974 pounds in the first three months of the year.

The new additions were more than welcome as the company’s two other operating mines, Caribou and Santander, saw slight decreases with maintenance and weather affecting operations.

Trevali’s lead production also increased 23 percent, with the company producing 12,296,555 million pounds. Meanwhile, silver production was down 2.53 percent to 336,927 ounces.

Quarterly revenues were up 187 percent to US$115 million from US$40 million in Q1 2017.

“First quarter production was in line with annual guidance range and demonstrated the robust cash flow generation capacity of our mines,” said Mark Cruise, president and CEO of Trevali.

However, the company’s financial results, zinc, lead and silver production were down compared to Q4 — zinc production in the previous quarter was 104.8 million of payable pounds — something Cruise said was foreseen.

“First quarter production was planned to be lower than subsequent quarters, reflecting scheduled maintenance at Santander operations and winter conditions at Caribou. We are continuing to further optimize the operations and anticipate strong performance for the balance of the year,” he said.

According to the company, its financial results were affected by lower sales volumes and lower realized prices in comparison to LME prices — realized prices for zinc and lead were US$1.49 per pound and US$1.09 per pound, respectively, while the quarterly LME average prices for zinc and lead were US$1.55 and US$1.14, respectively.

The Santander mill in Peru averaged 1,647 tonnes per day, down from its 2,000-tonne-per-day design rate, due to work on a ball mill. As of the timing of the company’s report, Santander was averaging 2,350 tonnes per day.

That said, the company is maintaining its guidance for the year at 400 million to 427 million pounds of zinc and 43.8 million to 46 million pounds of lead.

Trevali operates four mines: the Santander mine in Peru, the Caribou mine in Canada, the Rosh Pinah mine in Namibia (80 percent owned) and the Perkoa mine in Burkina Faso (90 percent owned).

On May 1, Trevali announced plans to increase its share in Rosh Pinah to 90 percent.

Since the beginning of 2018, Trevali’s share price on the Toronto Stock Exchange has been sliding, and closed at C$1.15 on Monday (May 14), down 25.65 percent year-to-date.

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Securities Disclosure: I, Scott Tibballs, 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.