Trevali Mining Announces Preliminary FY 2021 Production Results

Trevali Mining (TSE: TV) announced preliminary fourth-quarter and full-year production results for 2021 on Monday.

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The natural resources company also provided 2022 operating, capital, and exploration expenditure guidance.

2021 Highlights

Total Recordable Injury Frequency (TRIF) in 2021 increased to 8.7 from 4.5 in 2020, but injury severity decreased. Trevali achieved 2021 payable zinc production of 322 million pounds, slightly below adjusted guidance of 325-350 million pounds of payable zinc upon normalization for the Santander sale.

The company restarted its Caribou mine with an initial two-year mine plan with the possibility of extending the mine life.

Pilot testing of FLSmidth’s rapid oxidative leach technology at Caribou has started. The results are expected to form the basis of a preliminary economic assessment. A NI-43-101 technical report is expected to be released in the first half of 2022.

Trevali published its third annual sustainability report, which refines targets to reduce water consumption and greenhouse gas emissions. It released a feasibility study for RP2.0, outlining an expected 86% increase in throughput and an expected decrease in operating costs.

The sale of the Santander mine in Peru was closed in December 2021, allowing Trevali to continue to focus on disciplined capital allocation and RP2.0 financing.

CEO Commentary

Trevalis president and CEO Ricus Grimbeek said, “The company ended 2021 with much to be excited about for 2022 and beyond. We achieved excellent performance from Rosh Pinah and had improved Q4 2021 performance at Perkoa and the recently divested Santander mine, though faced challenges at Caribou which we are working through. We also experienced ongoing issues related to COVID-19 which had an impact on our ability to operate and achieve our targets. Our COVID-19 control measures are holding up well and the experience gained further supports our focus on the health and safety of our workforce and surrounding communities. “

2022 Outlook

Consolidated production guidance for 2022 is estimated at 247-280 million pounds of payable zinc, 36-41 million pounds of payable lead, and 688-778,000 ounces of payable silver.

Zinc production is expected to be moderately higher in the second and third quarters compared to the first and last quarters of 2022 due to scheduling. At each of the three operations, the first quarter should post the lowest level of production of the year.

Wall Street’s Take

On January 18, Raymond James analyst Brian MacArthur kept a Hold rating on TV and raised its price target to C$3 (from C$2.50). This implies 87.5% upside potential.

The rest of the Street is neutral on TV with a Hold consensus rating based on five Holds. The average Trevali Mining price target of C$2.90 implies 81.5% upside potential to current levels.

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