TD "Flash note" MixedTrevali Mining Corp.(TV-T) C$0.25Record Production; Lower Net Sales Impact EarningsCraig Hutchison, P. EngJoel Brown, P.Eng. (Associate)EventTrevali Mining reported its Q2/19 operating and financial results. Conference calldetails: 11:00 a.m. ET today; 877-291-4570; International: +647-788-4919.Impact: MIXEDTrevali reported a Q2/19adjustedEPS loss of $0.03, below our estimate of-$0.02 and consensus of $0.00. Adjusted EBITDA of -$0.3mm was below ourestimate of $7.8mm and consensus of $21.5mm. The earnings miss relative to ourestimate was driven by slightly lower sales and higher-than-expected treatmentand refining charges. Our negative provisional pricing estimates for the quarterwere largely in-line ($17.9mm versus TDS: $20.1mm).Record quarterly production beat - Trevali reported consolidated production of105.2mmlbs zinc, above our estimate of 95.1mmlbs. All but one of the company'soperations, Caribou, delivered better-than-expected production in the quarter onimprovements in throughput and grades. Zinc sales were only 93.2mmlbs in thequarter, leading to a build-up of inventory.Total consolidated C1 cash costs for the quarter were $0.86/lb Zn (net)(TD:$0.92/lb), while AISC were $1.00/lb Zn (net) (TD: $1.13/lb). C1 cash costsfell 10% q/q, driven largely by the improved production volumes. We calculatethat Trevali generated $32.4mm of positive FCF in the quarter, bolstered by a$65.2mm settlement of receivables in the quarter.Balance sheet — The company repaid $13mm in debt in Q2/19, and endedthe quarter with net debt of $34.8mm (-44% q/q), including cash of $52.8mm.The company's liquidity remains in good shape, in our view, totaling $234.4mm,including $181.6mm available on its credit facility.Trending towards the high-end of 2019 guidance; — Trevali expects 2019production to be closer to the high-end of its range of 361-401mmlbs zinc,44-49mmlbs lead, and 1.32-1.47mmoz silver, with opportunities to exceedguidance. Despite the impact of higher benchmark treatment costs, Trevali ismaintaining its C1 cash costs and AISC guidance range of $0.81-$0.88/lband$0.99-$1.09/lb, respectively.We currently model 2019 consolidated payable zinc and lead production of386mmlbs and 46.7mmlbs, respectively, at C1 cash costs of $0.91/lb and AISCof $1.10/lb. We plan to update our estimates following today's conferen