Some numbers.In the 3rdQ of 2020, TV produced 74.1 million lbs. of payable zinc. The LME price of zinc averaged $1.06/lb. Operating cash flow was $17.1 million. The current zinc price is $1.26/lb. and TV is paying a treatment charge based on benchmark which is currently $300/tonne of concentrate. Spot treatment charges are currently $80/tonne, down from a little over $300/tonne at the beginning of the year. Many industry experts believe that benchmark treatment charged will decline to the $200/tonne level in 2021. A decline in treatment charges is equivalent to a 10 cent per lb. decrease in cash costs and according to TV would increase their margin by $32 million on an annual basis.
So , should the current zinc price hold throughout 2021 and treatment charged decline to $200/tonne, TV's quarterly operating cash flow could increase to almost $40 million ($17.1+ (0.20x74.1)+8=39.2 million or about $157 million on an annual basis. After the recent $30 million equity issue, there will be about 970 million shares outstanding. Still lots of upside here!