Galvanizer wrote: Below is a high-level income / cash flow statement (depreciation is a non-cash item and not included).
Using the simple average of Trevali's 2022 guidance on zinc production and AISC costs, the
contribution margin by mine was calculated. Deductions from the contribution margin include G&A, interest, income tax and other (estimated based on the 2021 results).
Expansionary capital and exploration expenditures are then deducted from that balance.
From that balance, Trevali must make certain
mandatory Revolving Credit Facility "
minimum repayments based on excess cash generated on a quarterly basis" (this facility expires / will be renogotiated by September 2022).
Cariboo zinc production is hedged. Trevali must deliver 74 million pounds of zinc at $1.25 per pound during 2022. The table re-allocates zinc production from the other mines (Note 1). There is no 'financial instrument' loss included in the income statement (below) as it is accounted for in the net Caribou zonc price of $1.25 per pound).
Sustaining CAPEX is included in the AISC.
The income tax is an estimate as it depends on each country's tax regime (information not readily available).
The other cash flow component to consider is the timing of sales and the collection of receivables (shipping logisitics and the related delays have a huge impact on Rosh Pinah and Perkoa). What was gained in the current quarter because shipments were delayed / late in the previous quarter are offset by the "lost" sales at the end of the current quarter. This becomes a wash each quarter.
The risks for Trevali during 2022 included: (1) whether Caribou can deliver the increased production targets; (2) the zinc prices maintain the current price levels; (3) cost controls are in place and effective; and (4) whether the bankers are willing to extend / increase the financing.
| | 2022 | Perkoa | Rosh Pinah | Caribou | 2021 |
| Zinc Production | 262.5 | 136.5 | 62.0 | 64.0 | |
| Note 1 | - | (7.0) | (3.0) | 10.0 | |
| | 262.5 | 129.5 | 59.0 | 74.0 | 277.1 |
| Zinc Revenue | | $ 1.60 | $ 1.60 | $ 1.25 | |
| AISC | | $ 1.03 | $ 1.12 | $ 1.15 | |
| Margin | | $ 0.57 | $ 0.48 | $ 0.10 | |
| Contribution Margin | $ 110 | $ 74 | $ 28 | $ 7 | |
| G&A | $ (10) | | | | |
| Interest | $ (12) | | | | |
| Other | $ (2) | | | | |
| Income Tax | $ (12) | | | | |
| CAPEX-Rosh & Caribou | $ (21) | | | | |
| Exploration | $ (2) | | | | |
| | $ 51 | | | | |
| | | | | | |