THE NORTHERN MINER - DAILY NEWS - Nov 2, 2010
Trevali adds to Santander resource
Vancouver - Twenty months after an initial resource estimate, Trevali Resources (TV-T, 4TI-F, TREVF-O) has added significantly to the total amount of contained zinc, lead and silver at its Santander mine project in Peru.
The resource update comes after over 33,000 metres of drilling in 171 diamond drill holes at the historic mine, located high in the Altiplano roughly 200 km northeast of Lima.
Spread over five deposits, the resource now stands at 5.9 million indicated tonnes grading 3.86% zinc, 1.35% lead, 44 grams silver per tonne and 0.08% copper, which works out to an in-situ metal inventory of 498 million lbs. zinc, 174 million lbs. lead, 8.25 million oz. silver and 9.7 million lbs. copper using a 3% zinc equivalent cut-off. The project hosts a further 4.8 million inferred tonnes grading 5.08% zinc, 0.44% lead, 21 grams silver and 0.07% copper.
Compared with the resource estimate of March 2009, the updated resource has in the indicated category 51% more zinc, 41% more lead and 49% more silver thanks to a 53% increase in tonnage, while the inferred category has 605% more zinc, 216% more lead and 488% more silver after adding 452% more tonnage.
Mineralization remains open in all five deposits, four of which Trevali discovered after acquiring the historic mine in 2007, while the company continues to explore other geophysical anomalies on its 44-sq.-km property.
Trevali is developing the project in conjunction with Glencore International, with the two reaching a finalized legal agreement in September. In the deal, Trevali keeps 100% ownership of the project while Glencore will buy all zinc and lead-silver concentrate produced from Santander for the life-of-mine at benchmark terms.
Glencore will also provide and operate a 2,000-tonne-per-day mill and flotation plant that Trevali will earn ownership of over 4 years, and Glencore will manage the entire project on a contractor basis.
The Santander mine was in operation between 1958 and 1991, when low metal prices force its closure. Over that time roughly 8 million tonnes of ore grading 7% zinc, 1-4% lead and 60 grams silver were produced.
The old operation left a 1000-person camp, which Trevali has upgraded to a modern 200-person camp with room for expansion, as well as an ore-processing plant with various crushers, mills and cell houses.
Trevali also continues to work to upgrade its 1.5-megawatt run-of-river power plant to upwards of 10 megawatts, recently securing the final permit needed to upgrade the 17-km transmission line to the Santander project. With the mine expected to only consume 4-5 megawatts, Trevali plans to sell the excess power to third parties.
The company shifted its stock listing from the Canadian National Stock Exchange to the Toronto Stock Exchange in early October. At the same time the company appointed Dr. Anthony Holler as chairman.
Trevali's share price was up a penny to close at $1.43 on the update. The company has a 52-week share price range between $1.25 and $1.54 and 56 million shares outstanding.