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Trevali Mining Corp
Symbol C : TV
Shares Issued 818,496,085
Close 2019-02-20 C$ 0.395
Recent Sedar Documents

Trevali loses $230.6-million (U.S.) in 2018

2019-02-20 19:21 ET - News Release

Dr. Mark Cruise reports

TREVALI REPORTS 2018 ANNUAL FINANCIAL RESULTS

Trevali Mining Corp. has released its audited annual financial results for the year ended Dec. 31, 2018, with a net loss of $231-million, or 27 cents per share, following non-cash impairment charges before tax of $312-million. The company posted EBITDA (profit attributable to shareholders before net finance expense, income and resource taxes, and depreciation, depletion and amortization, less the impact of impairments or reversals of impairment and other non-cash expenses or recoveries) of ($177-million) and adjusted EBITDA (1) (before impairments) of $137.0-million on total revenues of $403-million. All financial figures are in U.S. dollars.

Summary:

  • Total 2018 zinc production of 406.9 million payable pounds, in line with initial guidance of 400 million to 427 million payable pounds set at the start of 2018; total lead production of 41.7 million payable pounds and silver production of 1.3 million payable ounces;
  • Consolidated cash costs of 77 cents per pound of payable zinc produced or $68 per tonne milled and all-in-sustaining costs of 96 cents per pound of payable Zn produced;
  • Concentrate sales revenue of $402.6-million, up approximately 22 per cent versus $330.5-million in 2017;
  • Annual EBITDA of negative $177-million and annual net loss of $231-million or 27 cents per share; annual adjusted EBITDA of $137-million and adjusted earnings per share of four cents;
  • Fourth quarter adjusted EBITDA of $41-million and adjusted earnings per share of one cent;
  • Maintained strong liquidity with cash of $65.5-million, adjusted working capital position of $149-million, and net debt and total debt of $67.0-million and $132.4-million, respectively (as of Dec. 31, 2018); in addition, $129-million remains available and undrawn on the revolving credit facility.

The negative EBITDA for year ended Dec. 31, 2018, is due to the recognition of a non-cash impairment charge. The company completed an impairment analysis, which considered the indicators of impairment in accordance with IAS 36 (Impairment of Assets), and reduced the carrying value of its mine operations by a net $263-million (composed of $311.8-million impairment of property, plant and equipment and exploration and evaluation assets, and goodwill and deferred tax recovery of $48.8-million). The company is fully compliant with its debt covenants following the impairment.

Dr. Mark Cruise, Trevali's president and chief executive officer, stated: "Over the past few months, we have completed a thorough review of our assets, which resulted in the non-cash impairment. However, efforts are under way at all our operations to maximize operating efficiencies, and the company is well positioned to improve operating performance going forward. In 2019, Trevali is placing an enhanced focus on improving transportation logistics and starting up a new, more efficient power plant at Perkoa and is working with external consultant at Caribou to evaluate alternative, lower-cost mining methods. At Rosh Pinah, significant progress has been made over the past couple months, understanding the new western ore field, which accounts for approximately 80 per cent of the mine's reserves, with additional mill investments under way this year and the RP2.0 optimization study also progressing well. In Peru, the mine transitioned to fully owner operated and is well positioned for production in 2019 with all development in place for the year.

"The full support of the company's banking syndicate on the $275-million of revolving credit facility and our healthy balance sheet place Trevali in a strong position to meet its commitments in 2019 and invest for the future," continued Dr. Cruise. "We are committed to efficiently allocating capital, balancing the need for continued exploration and capital investment, with debt reduction and repurchasing shares under our existing normal course issuer bid."

This news release should be read in conjunction with Trevali's audited annual consolidated financial statements and management's discussion and analysis for the year ended Dec. 31, 2018, which are available on Trevali's website and on SEDAR. Certain financial information is reported herein using non-international financial reporting standard measures. See non-IFRS financial performance measures in Trevali's 2018 management's discussion and analysis.

2018 annual and fourth quarter financial results and conference call

The company will host a conference call and results presentation webcast at 10:30 a.m. Eastern Time on Feb. 21, 2019, to review the 2018 operating and financial results. Participants are advised to dial in five minutes prior to the scheduled start time of the call.

Conference call dial-in details

Date:  Feb. 21, 2019, at 10:30 a.m. Eastern Time

Toll-free (North America):   877-291-4570

International:  647-788-4919

                            CONSOLIDATED FINANCIAL RESULTS
                        ($ millions, except per-share amounts)

                                                Q4 2018      Q4 2017         2018         2017

Revenues                                         $123.4       $188.8       $402.6       $330.5
Income from mining operations                     $29.2        $37.9        $77.7        $86.1
EBITDA (1)                                      ($271.5)       $56.3      ($176.6)        $101
Adjusted EBITDA (1)                               $41.1        $56.0       $137.0       $119.0
Net income (loss)                               ($251.8)       $25.2      ($230.6)       $20.2
Basic income (loss) per share ($/share)          ($0.29)       $0.03       ($0.27)       $0.03
Adjusted earnings per share (1) ($/share)         $0.01        $0.03        $0.04        $0.07

(1) A non-international financial reporting standard performance measure.

                               CONSOLIDATED PRODUCTION STATISTICS 
 
                                                    Q4 2018        Q4 2017           2018           2017

Tonnes mined                                        723,384        832,878      2,973,669      2,128,018
Tonnes milled                                       737,496        818,690      3,054,768      2,250,464
Payable production
Zinc (Mlb)                                            102.7          104.8          406.9          225.1
Zinc (tonnes)                                        46,600         47,500        184,600        102,100
Lead (Mlb)                                              9.7           13.5           41.7           45.8
Lead (tonnes)                                         4,400          6,100         18,900         20,800
Silver (Moz)                                            0.3            0.4            1.3            1.6
Operating cost per tonne (1) ($/tonne)                  $77            $68            $68            $57
C1 cash costs per pound (1) ($/lb)                    $0.90          $0.81          $0.77          $0.69
All-in sustaining cost per pound (1) ($/lb)           $1.15          $0.98          $0.96          $0.88

(1) A non-international financial reporting standard performance measure.

                             CONSOLIDATED SALES STATISTICS 
 
                                           Q4 2018      Q4 2017         2018         2017

Zinc concentrate (dry metric tonnes)       141,550      151,173      448,402      271,043
Lead concentrate (dry metric tonnes)        14,344       20,701       49,792       59,518
Zinc (Mlb)                                   124.1        139.2        403.3        244.3
Zinc (tonnes)                               56,300       63,200      183,000      110,800
Lead (Mlb)                                    10.7         19.0         39.9         50.6
Lead (tonnes)                                4,900        8,600       18,100       23,000
Silver (Moz)                                   0.3          0.5          1.2          1.6
Revenues, net (millions) (1)                $123.4       $188.8       $402.6       $330.5

(1) Revenues include provisional price adjustment and are calculated on a 
100-per-cent basis. Fourth quarter 2018 revenues include a positive settlement 
adjustment of $1.6-million on sales from prior quarters.

2019 consolidated production guidance

Production, operating cost and capital expenditure guidance remains unchanged from that reported on Jan. 17, 2019. Consolidated production guidance for 2019 is estimated between 361 million and 401 million pounds of payable zinc, 44 million and 49 million pounds of payable lead and 1.3 million and 1.5 million ounces of payable silver.

                            2019 CONSOLIDATED PRODUCTION GUIDANCE (1, 2)  
 
Mine                           2019 zinc production        2019 lead production      2019 silver production

Perkoa (100%) (2)                       151-168 Mlb
                                      68-76 ktonnes                         n/a                         n/a
Rosh Pinah (100%) (2)                     80-89 Mlb                   10-11 Mlb                 145-161 koz
                                      36-40 ktonnes                 4-5 ktonnes
Caribou                                   71-79 Mlb                   24-27 Mlb                 641-713 koz
                                      32-36 ktonnes               11-12 ktonnes
Santander                                 59-65 Mlb                   10-11 Mlb                 536-595 koz
                                      27-29 ktonnes                 4-5 ktonnes
Total                                   361-401 Mlb                   44-49 Mlb
                                    163-181 ktonnes               19-22 ktonnes             1,322-1,469 koz

(1) Forward-looking information.
(2) Trevali's ownership interest is 90 per cent of Perkoa and 90 per cent of Rosh Pinah.
 

Consolidated operating costs are forecast to range from $69 to $76 per tonne, with C1 cash costs of between 81 cents and 88 cents per pound of zinc. Including a capital expenditure forecast of $74-million, consolidated AISC is expected to range from 99 cents to $1.09 per pound of zinc (for the purpose of AISC guidance, all capital is considered to be sustaining). Relative to 2018, higher capital expenditures at Rosh Pinah and Santander are planned, with incremental spending on process plant upgrades (new filter press and floatation and grinding circuit improvements) and power infrastructure, respectively, the main drivers.

                    2019 CONSOLIDATED OPERATING COST AND CAPITAL EXPENDITURE GUIDANCE (1, 2)
 
Mine                       Operating cost          C1 cash cost       All-in sustaining cost     Capital expenditures
                               (per tonne)             ($/lb Zn)                    ($/lb Zn)                     ($M)

Perkoa (100%) (2)                 106-117           $0.84-$0.92                  $0.91-$0.99                      $11
Rosh Pinah (100%) (2)               56-63             0.70-0.77                    0.99-1.09                       26
Caribou                             72-79             0.95-1.02                    1.15-1.28                       16
Santander                           45-49             0.71-0.78                    1.02-1.13                       21
Exploration-8
Total                               69-76             0.81-0.88                    0.99-1.09                       82

(1) Forward-looking information.
(2) Trevali's ownership interest is 90 per cent of Perkoa and 90 per cent of Rosh Pinah.

Qualified person and quality control/quality assurance

EurGeol, Dr. Mark D. Cruise, Trevali's president and chief executive officer, and Daniel Marinov, PGeo, Trevali's vice-president, exploration, are qualified persons as defined by National Instrument 43-101, and have supervised the preparation of the scientific and technical information that forms the basis for this news release.

About Trevali Mining Corp.

Trevali is a zinc-focused, base metal company with four mines: the 90-per-cent-owned Perkoa mine in Burkina Faso, the 90-per-cent-owned Rosh Pinah mine in Namibia, the wholly owned Caribou mine in the Bathurst mining camp of northern New Brunswick and the wholly owned Santander mine in Peru.

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