VANCOUVER, BC, Nov. 4, 2020 /CNW/ - Trevali Mining Corporation ("Trevali" or the "Company") (TSX: TV) (BVL: TV) (OTCQX: TREVF) (Frankfurt: 4TI) today released financial and operating results for the three and nine months ended September 30, 2020. The Company reported quarterly production of 74 million pounds of zinc at an all-in sustaining cost1 ("AISC") of $.91 per pound. Adjusted EBITDA1 and net income for the quarter was $11.2 million and $1.1 million respectively, both primarily due to business improvement initiatives and the increase in the zinc price. 

Trevali Mining Corporation Logo (CNW Group/Trevali Mining Corporation)

FINANCIAL AND OPERATIONAL HIGHLIGHTS FOR THE THIRD QUARTER 2020
(Compared to second quarter 2020, unless otherwise noted)

  • Excellent safety performance with 20% reduction to the Total Recordable Injury Frequency rate year to date when compared to the same period in 2019.
  • Perkoa, Rosh Pinah and Santander are all producing at full capacity. Santander restarted operations on July 15, 2020.
  • 13% increase to zinc payable production and 13% decrease to costs. Achieved zinc payable production of 74 million pounds at a C1 Cash Cost1 of $0.81/lb and AISC1 of $0.91/lb. 
  • $17.1 million of  operating cashflows before changes in working capital, due to the implementation of T90 initiatives and the recovery in commodity prices with all operations contributing positively.
  • Adjusted EBITDA1 of $11.2 million, an increase of $16.9M over Q2 due to an increase in the zinc price (quarterly average of $1.06/lb) despite reduced sales volumes due to timing of shipments.
  • Revenues increased by 17% contributing to positive earnings for the quarter, together with a reduction in operating costs, in particular freight rates.
  • Issued positive Pre-Feasibility Study ("PFS") for the RP2.0 Expansion project in August. Increases production capacity at Rosh Pinah by 86% and significantly reduces operating costs.
  • Initiated a hedging program covering approximately 50% of zinc production (72.5Mlbs) over the period October 2020 to March 2021 through a combination of forward swaps and put options.
  • Net Debt1 of $129.9 million as at September 30, 2020 reduced by $10.8 million as at October 31, 2020, a result of the collection of receivables largely related to sales from Q3.
  • Updated 2020 guidance confirmed. Zinc production for H2 2020 between 148 – 163 million pounds of payable zinc, C1 Cash Cost1 of $0.80 – $0.88/lb and AISC1 of $0.89 – $0.97/lb.

Ricus Grimbeek, President and CEO stated, "The team delivered a strong turnaround quarter across the portfolio. Perkoa and Rosh Pinah produced at full capacity while Santander had a successful restart of operations in July. I am proud of everyone for working safely and achieving our planned operational targets while implementing an additional $11 million of T90 business improvement initiatives. This brings the program total to $41 million to date and we are closing in on our targeted AISC1 of $0.90 per pound having achieved $0.91 this quarter.

The price of zinc also had a significant turnaround, ending Q3 up 17%, and continuing to climb due to a tightening zinc market. While we expect to see further gains in the zinc price, we took the opportunity to put in place a hedging program and designed it to protect the business against a potential downside movement while allowing for significant exposure to the upside.

With the third quarter behind us and with tailwinds in the form of a higher zinc price we expect the positive momentum to continue. We are on track to deliver our revised 2020 guidance and are projecting compliance to our financial covenants over the coming quarters once they are reinstated at the end of Q4."