Trevali Provides Financing Update for the Rosh Pinah Expansi Trevali Provides Financing Update for the Rosh Pinah Expansion "RP2.0" Project and Commences Early Works Program
VANCOUVER, BC, Jan. 20, 2022 /CNW/ - Trevali Mining Corporation ("Trevali" or the "Company") (TSX:TV) (OTCQX:TREVF) (Frankfurt: 4TI) is pleased to provide an update for the financing of the Rosh Pinah Expansion project ("RP2.0"). The results of the Feasibility Study were released on August 17, 2021 and are available on Trevali's SEDAR profile at www.sedar.com. Trevali is currently working toward securing project financing for the RP2.0 expansion project and refinancing both the existing Corporate Revolving Credit Facility and Glencore Facility, maturing in September 2022. In parallel, an early works program has commenced for RP2.0.
Ricus Grimbeek, President and CEO of Trevali, commented, "I am pleased with the progress made toward securing financing for the RP2.0 project and a new corporate facility. The level of interest we have seen along with Glencore's continued support affirms our belief in the high-quality nature of the project. Endeavour Financial is assisting us in the financing process and we are excited to kick-off the early works program. We will continue to provide updates on the financing of RP2.0 and project progress as milestones are achieved."
Financing Update
Trevali appointed Endeavour Financial in September 2021 to advise the Company on the formation of a lending syndicate, coordinate lender due diligence and negotiate financing documentation with the objective of providing a competitive non-equity financing solution for RP2.0 and refinancing the existing Corporate Revolving Credit Facility. Trevali is considering several opportunities for the financing package, including project finance debt, subordinated debt and a silver stream on Rosh Pinah's silver production.
The Company has received non-binding expressions of interest from several capital providers about participating in the financing process, including commercial banks, streaming and royalty companies, and mining focused alternative lenders, as well as from Rosh Pinah's concentrate offtaker, Glencore.
Glencore has indicated its support for the project by proposing an aggregate $33 million financing package, which may include an extension to the existing Glencore Facility of $13 million, subordinated to traditional project finance debt and contingent on the remainder of the required financing package being secured as well as negotiation of satisfactory terms and conditions.
Commencement of RP2.0 Expansion Project Early Works Program
In parallel with its project financing initiatives, Trevali continues to advance certain aspects of RP2.0 in order to maintain the project schedule and mitigate the risks associated with the project as outlined in the Feasibility Study. The early works program, which has a capital budget of $20 million is expected to be financed from internal cash flows and consists of the following scope:
- Procurement of mobile equipment
- Power supply system upgrade
- Paste backfill plant long lead item procurement
- Portal construction and decline development
- Process plant detailed engineering
Trevali will provide more comprehensive information regarding planned 2022 capital expenditures as part of its production and cost guidance which is expected to be issued in January 2022.
About the Rosh Pinah Expansion "RP2.0" Project
The Company released and filed the results of the NI 43-101 Feasibility Study with respect to the RP2.0 project on August 17, 2021.
The Feasibility Study estimated that at $1.17/lb zinc, $0.96/lb lead and $24.47/oz silver, the RP2.0 Net Present Value (at an 8% discount rate) is approximately $156 million with an expected payback period of 4.6 years and a forecasted Internal Rate of Return of 58%. Expansionary capital costs were estimated at $111 million. Once complete, the expanded mine is projected to produce an annual average of 135 million pounds of payable zinc, 23.7 million pounds of lead and 303,000 ounces of silver over an expected 9-year post-expansion mine life at a forecasted All-In-Sustaining-Cost1 of $0.67 per pound of zinc.
Processing Plant: The FS incorporates a planned upgrade to the comminution circuit to include a new single-stage SAG mill and pebble crusher. The upgrade also includes primary crushing upgrades and ore blending area, along with other circuit modifications intended to provide increased flotation, thickening, filtration and pumping capacity to achieve the target throughput of 1.3 Mtpa. The upgrade will also include several flowsheet modifications aimed at improving both the concentrate grade and metal recoveries.
Underground Development and Infrastructure: A dedicated portal and decline to the WF3 deposit will be constructed to support the expected increase to mine production levels and reduce operating costs. The planned trucking decline is 3.9 km in length, excluding level access and stockpiles. The new trucking decline will act as an additional fresh air intake within the ventilation network and will enable direct ore haulage from the WF3 zone to a new surface primary crusher station utilizing large-scale (60 tonne) trucks. Ore sourced from other areas (EOF, SF3, SOF, and BME) will be transported to the existing underground crushing system using the existing 30 tonne truck fleet and conveyed to surface via the existing conveying system.
Paste Fill Plant: A paste fill plant designed to operate at both the current 0.7 Mtpa and the 1.3 Mtpa targeted throughput rate has been included. The paste plant commissioning date is anticipated in Q2 2023 (approximately 9 months before the upgraded processing plant's expected commissioning date) as it is critical to fill existing voids (particularly within WF3) to achieve the increased production target and preferred mining sequence considered as part of the expansion project. Paste filling the stopes rather than leaving them void is expected to improve ground stability, increase ore recovery, and reduce dilution, and also to reduce surface tailings as a portion of new tailings will be redirected underground to be used as paste fill. A water treatment plant has been added to the paste fill plant system which is expected to significantly reduce water consumption. The system in conjunction with the paste fill plant system is anticipated to reduce the water intensity of the Rosh Pinah operation from 1.54 m3/t to 0.65 m3/t of ore.
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| 1 All-In-Sustaining-Cost "AISC" and C1 cash costs are non-IFRS financial performance measures. All-In-Sustaining Cost adds mine operating costs, smelting and refining costs, distribution costs, royalty costs, sustaining capital expenditures and lease payments and expresses them on a per pound of payable zinc produced basis. All-In-Sustaining Cost is not a standardized measure under IFRS and might not be comparable to similar financial measures disclosed by other issuers. This measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. See "Use of Non-IFRS Financial performance Measures" in the Company's Management's Discussion and Analysis for the three and nine months ended September 30, 2021, dated November 11, 2021 and filed on sedar.com, which section is incorporated herein by reference, for further information regarding these measures, including an explanation of this measure and a reconciliation to the Company's reported financial results in accordance with IFRS. |
Mobile Equipment: The existing small-scale underground trucks and load-haul dump (LHD) fleet will continue to be used primarily in the current mining areas. As mining extends deeper and average haulage distances increase in WF3, new large-scale trucks and LHDs are planned to be purchased for the more efficient transportation of material to surface which is expected to reduce costs over the life-of-mine.
Renewable Solar Energy Power Purchase Agreement: Trevali has entered into a fifteen-year Power Purchase Agreement (the "PPA") with Emerging Markets Energy Services Company ("EMESCO"). The PPA with EMESCO is anticipated to deliver 30% of Rosh Pinah's power requirements during the life of the agreement. EMESCO will be responsible for the design, permitting, financing and implementation of a solar energy system on a neighbouring property at no cost to Trevali. EMESCO will sell the power generated to Trevali at a fixed rate that is expected to reduce energy costs by 8% over the fifteen-year term of the agreement.
Onsite Operating Costs: Once the project is commissioned, onsite operating costs are expected to reduce by approximately 26% on a per tonne milled basis. Mining costs per tonne milled are expected to be reduced due to the planned change in the mining method to include paste fill allowing for increased ore recovery and reduced mining dilution. Mining costs are also expected to benefit from the dedicated underground decline to the WF3 deposit which should allow for more efficient material handling and reduced cycle times. The processing unit costs are expected to decrease as a result of treating increased tonnages following the upgrade. Fixed on site costs on a per tonne milled basis are also expected to decrease as the mine ramps up from 0.7 Mtpa to the FS target of 1.3 Mtpa as a function of higher annual throughput.
Figure 1: Rosh Pinah Expansion "RP2.0" Project Overview
For more information, please review the detailed Feasibility Study filed August 17, 2021 with an effective date of March 31, 2021, filed under the Company's profile at SEDAR.com.
About Endeavour Financial Limited (Cayman)
Endeavour Financial, with offices in London, UK, George Town, Cayman Islands and Vancouver, British Columbia, is one of the top mining financial advisory firms, with a record of success in the mining industry, specializing in arranging multi-sourced funding solutions for development-stage companies. Founded in 1988, Endeavour Financial has a well-established reputation of achieving success with over US$500 million in royalty and stream finance, US$4 billion in debt finance and US$28 billion in mergers and acquisitions. The Endeavour Financial team has diverse experience in both natural resources and finance, including investment bankers, geologists, mining engineers, cash flow modelers and financiers.