Announcements of increased production at Trevali Mining Corp.'s Santander
mine and the start of commercial production at Caribou mine, coupled with
zinc inventories that remain at multiyear lows, have helped solidify the
company's growth story.
On July 11, Trevali Mining Corp. (TV:TSX; TV:BVL; TREVF:OTCQX)
reported preliminary Santander mine production results for Q2/16 of
"approximately 15.2 million (15.2M) payable pounds zinc (a new quarterly
record), 5.6M payable pounds of lead and 222,121 payable ounces of
silver," with recoveries averaging "89% for zinc, 87% for lead and
73% for silver." Mill throughput for the site set a new record at
209,188 tonnes.
Commercial production at Trevali's Caribou zinc mine began on July 1, and
in June the mine "delivered the strongest monthly performance to date
with record mine and mill tonnage and throughput, zinc recoveries and
concentrate production," Trevali announced in a July 7 release.
Analysts covering the company responded positively to the news on both
fronts.
In a research note issued after the Caribou announcement, analyst Stefan
Ioannou of Haywood Securities wrote that, "With zinc production from two
mines expected to ramp up to +170 Mlb per annum by ~2019, we believe the
company is poised to become a (the) marquee mid-tier pure-play zinc producer
in a market facing a significant medium-term supply issue."
"Bringing a new zinc mine online could not come at a better time,
with positive fundamentals beginning to take hold and the zinc price climbing
upwards," wrote analyst Joseph Gallucci of Dundee Capital Markets on
July 7.
Paradigm Capital analyst Jeff Woolley noted that "the growth story is
coming together for Trevali" in his July 8 research note. With the
Caribou mine and mill "working in a consistent manner," Trevali's
focus will shift to "optimization and cost reduction" at the site,
Woolley added.
With Santander continuing "to operate well" and the onset of
production at Caribou, in a July 11 note, analyst Ian Parkinson of GMP
Securities wrote that "we see production and cash flow increasing for
the company. . .we believe that Trevali remains one of the best Canadian
companies to play a continued zinc price recovery."
"We are once again very impressed with the operating performance at
Santander, where Trevali seems to set new production records every
quarter," Dundee's Gallucci wrote in a July 11 note. "With
commercial production declared at Caribou just three days ago, Santander's
continued excellence provides a strong foundation for [the company] to focus
on optimizing Caribou."
In addition to Santander, located in Peru, and Caribou, located in the
Bathurst Mining Camp of northern New Brunswick, Canada, Trevali owns the
Halfmile and Stratmat base metal deposits, also in New Brunswick, which are
currently undergoing preliminary economic assessments.
