Mr. Ricus Grimbeek reports

TREVALI REPORTS SECOND QUARTER 2021 RESULTS WITH ADJUSTED EBITDA OF $32 MILLION

Trevali Mining Corp. today released financial and operating results for the three and six months ended June 30, 2021. The company reported quarterly production of 87.3 million pounds of zinc at an all-in sustaining cost (AISC) of 97 cents per pound. Revenue was $101.1-million and was supported by the first full quarter of production from Caribou since restarting, an increase in the average London Metals Exchange (LME) zinc price to $1.32 per pound, and byproduct revenue from lead and silver sales. All financial figures are in U.S. dollars.

Financial and operational highlights for the second quarter of 2021:

• Total recordable injury frequency (TRIF) in Q2 2021 saw a significant decrease to 5.2, from 13.3 in Q1 2021 TRIF; improved site engagement drove the quarterly incidents down;
• Zinc payable production for Q2 2021 of 87.3 million pounds increased 17 per cent from the prior quarter; strong performances at Rosh Pinah and Perkoa; and the company benefited from the first full quarter of production from Caribou since restarting despite a slower-than-planned ramp-up;
• C1 cash cost and AISC of 84 cents and 97 cents per pound, respectively, 6-per-cent and 2-per-cent decreases from the prior quarter, as operational cost inflation and weakening of the U.S. dollar were more than offset by the increase in byproduct credits;
• Revised 2021 production and cost guidance issued; zinc production is being revised to between 330 million and 355 million pounds of zinc, and AISC of 94 cents to 98 cents per pound;
• Q2 2021 revenues increased 41 per cent over the prior quarter to $101.1-million, due to the supplementary contribution from Caribou and an increase in the average quarterly LME zinc price to $1.32 per pound;
• Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for Q2 of $32.0-million impacted by strong commodity prices, partially offset by the timing of sales related to Caribou;
• Operating cash flows before working capital of $33.5-million, with net settlement receivables increasing by $37.3-million relative to Q1 2021, due to the timing of three Perkoa shipments and the collection for a late June sale at Rosh Pinah in July;
• Net debt for Q2 increased from $92.6-million at March 31, 2021, to $109.0-million, due to the increase in receivables, with $50.7-million collected during July; the net debt position as of July 31, 2021, has decreased $16.6-million to $92.4-million;
• RP2.0 expansion project feasibility study is nearing completion, with results to be released in Q3 2021; project financing discussions are continuing;
• Issued third annual sustainability report in June, covering new performance targets and disclosures.

Ricus Grimbeek, president and chief executive officer, stated: "The team delivered another good quarter, producing 87.3 million pounds of payable zinc. Rosh Pinah and Perkoa delivered strong production performances, while we benefited from the first full quarter of operations from Caribou since restarting, despite a slower-than-planned ramp-up. At Santander, we made the decision to put in additional development, which will extend the mine life into the first half of 2022.

"A higher average zinc price, coupled with a decreasing AISC relative to the first quarter, added to our margin per pound of zinc. As of July 31, we reduced our net debt position by $16.6-million and we expect to generate meaningful cash flows for the remainder of the year, especially in the fourth quarter.

"With our strengthening financial position, the imminent delivery of the RP2.0 feasibility study, furthering our test program on rapid oxidative leach technology for Caribou and ongoing financing discussions, we look forward to the next stage of growth for the company."

This news release should be read in conjunction with Trevali's quarterly consolidated financial statements and management's discussion and analysis for the three months ended March 31, 2021, which are available on Trevali's website and on SEDAR. Certain financial information is reported herein using non-IFRS (international financial reporting standards) measures.

Business overview

Trevali is a global base metals mining company, headquartered in Vancouver, Canada. The bulk of the company's revenue is generated from base metals mining at its four operational assets: the 90-per-cent-owned Perkoa mine in Burkina Faso; the 90-per-cent-owned Rosh Pinah mine in Namibia; the wholly owned Santander mine in Peru; and the wholly owned Caribou mine in New Brunswick. In addition, Trevali owns the Halfmile and Stratmat properties and the Restigouche deposit in New Brunswick, Canada, and the past-producing Ruttan mine in Northern Manitoba, Canada. The Caribou mine was placed on care and maintenance on March 26, 2020; on Jan. 15, 2021, the company restarted operations, with full zinc payable production resuming on March 25, 2021. Trevali also owns an effective 44-per-cent interest in the Gergarub project in Namibia as well as an option to acquire a 100-per-cent interest in the Heath Steele deposit, located in New Brunswick, Canada.

Revised 2021 guidance and outlook

Consolidated production guidance for 2021 was initially set at 330 million to 360 million pounds of payable zinc, with 45 million to 50 million pounds of payable lead and 925,000 to 1,025,000 ounces of payable silver, at a C1 cash cost of 80 cents to 84 cents and AISC of 90 cents to 97 cents per payable pound of zinc produced.

The production guidance is now revised to 330 million to 355 million pounds of payable zinc, 40 million to 44 million pounds of payable lead and 888,000 to 972,000 ounces of payable silver, at a C1 cash cost of 80 cents to 84 cents and AISC of 94 cents to 98 cents per payable pound of zinc produced.

Financial and operational summary

Consolidated quarterly production increased by 17 per cent to 87.3 million pounds of payable zinc, compared with the prior quarter at 74.8 million pounds of payable zinc, and by 33 per cent, as compared with Q2 2020, as Q2 2021 is the first full quarter of production from Caribou following its restart in late March, 2021.

C1 cash cost and AISC for Q2 2021 decreased by 6 per cent and 2 per cent, respectively, as compared with the prior quarter, primarily due to an increase in byproduct credits as Q2 2021 benefited from one of three annual lead concentrate sales at Rosh Pinah, partially offset by the operational cost inflation at Perkoa and Rosh Pinah, the weakening of the U.S. dollar, and the timing of sustaining capital expenditures, delayed from the prior quarter. AISC for Q2 2021 decreased, as compared with the corresponding quarter of 2020, due to the reduction of the treatment charge benchmark rate and an increase in byproduct pricing, partially offset by a decrease in production.

The increase in revenues in Q2 2021 to $101.1-million is attributable to the 19-per-cent increase in zinc payable sales volumes and 6-per-cent increase in zinc price. The 137-per-cent increase in revenues, compared with the corresponding quarter in 2020, is due primarily to the 48-per-cent increase in zinc price, the 20-per-cent increase in zinc payable sales volumes and the 47-per-cent decrease in 2021 zinc treatment charge benchmark.

Q2 2021 adjusted EBITDA of $32.0-million increased from $24.5-million in Q1 2021, primarily due to the 19-per-cent increase in zinc payable sales volumes, the 6-per-cent increase in the zinc price and the 6-per-cent decrease in operating costs (C1 cash cost). The difference between EBITDA and adjusted EBITDA during Q2 2021 is minimal, with the $1.9-million variance a net impact of foreign exchange and mark-to-market revaluations. In contrast, the prior quarter and the corresponding quarter in 2020 included more significant mark-to-market and foreign exchange amounts.

Market outlook

Management of the company believes that the outlook for the zinc market remains robust. The metals sector has performed well as global economic activity increased and pent-up demand struggled to be satisfied due to supply chain constraints. Although there has been a pause in price increases of late, management believes the structural shift toward a metal-intensive economic environment is still in its infancy. The company expects multiple factors to drive this shift, including infrastructure spending initiatives, decarbonization of energy sources, electrification of transportation and technology-related improvements in manufacturing efficiency.

The decline in the zinc price and the other metals witnessed late in the quarter was given added pressure by the strengthening of the dollar and confirmation that China's state reserve bureau will start selling parcels of metal, zinc included, in the coming months to dampen prices. The international lead-zinc study group reported that the Chinese state reserves bureau holds 250,000 tonnes of refined zinc, which was accumulated between late 2009 and early 2013.

Meanwhile, global manufacturing is strong. Growth of the eurozone manufacturing sector hit new heights during June, with the headline purchasing managers index (PMI) setting a fresh survey record for a fourth successive month. After accounting for seasonal factors, the PMI improved to 63.4, up from 63.1 in May. The manufacturing PMI for Japan came in at 52.4 in June, down from 53.0 in May. This indicated a fifth consecutive monthly improvement in the health of the sector, though the pace of the expansion was the softest since February. The Chinese manufacturing sector expanded at a slower pace in June. Production and new orders continued to expand, albeit at mild rates. Thus, at 51.3 in June, the headline seasonally adjusted general manufacturing PMI for China was down from 52.0 posted in May. The reading was the slowest recorded since March, 2020, however, it was reported that the pandemic and difficulties obtaining inputs had weighed on growth in the period.

As reported earlier this year, the annual benchmark contract treatment charge for zinc concentrate was agreed to in Asia and Europe at $159 per tonne, versus the $300 per tonne agreed to last year. Trevali's concentrate off-take agreements reference the annual benchmark treatment charges. Although market expectations are for zinc concentrate supply to expand in the coming quarters, the low annual benchmark reflected tightness in the concentrate. In a recent market update, Wood Mackenzie's June indicative spot treatment charge was reported at $80 per tonne CIF MCP, up from $78 per tonne in May. This is the third consecutive monthly increase since the lows of the first quarter.

During Q2 2021, the LME zinc price averaged $1.32 per pound, maintaining its improvement from its pandemic low of 82 cents per pound reached back in March, 2020. This compares with an average LME zinc price of 84 cents per pound in Q2 2020 and $1.25 per pound in Q1 2021. The company believes that fundamental support for zinc prices will continue in the medium term as management believes demand will outweigh supply as global economic activity recovers and previously mentioned infrastructure spending and green energy initiatives make an impact.

LME inventories decreased to 256,000 tonnes by end of Q2 2021, versus 270,500 tonnes on March 31, 2021. Shanghai Futures Exchange (SHFE) zinc stocks dropped to 35,000 tonnes, versus 113,000 tonnes at the end of Q1 2021. At eight days of global consumption, this inventory level is well below historical averages of 18 days and is also supportive of higher zinc prices.

Relatively low stocks and robust demand continue to put upward pressure on spot metal premiums and spot zinc premiums, which are moving higher. In Northwestern Europe, they are in the region of $120 to $130 per tonne, up from $100 to $110 per tonne in May. In the United States, meanwhile, spot premiums are in the upper part of the $193-to-$198-per-tonne range. Those for Southeast Asia are in the region of $110 per tonne.

Corporate developments

On Dec. 2, 2020, the company closed its marketed offering of 186.53 million units at a price of 18.5 cents per unit for aggregate gross proceeds of $26.6-million ($34.5-million (Canadian)), which included the exercise of the full amount of the overallotment option of 24.33 million units. Each unit comprises one common share and one-half of one common share purchase warrant, entitling the holder thereof to acquire one common share at a price of 23 Canadian cents until June 2, 2022. Glencore PLC exercised its pre-emptive participation rights in the offering to purchase 49 million units.

On Jan. 15, 2021, the company announced the planned restart of its Caribou mine, which had been on a care and maintenance program since March, 2020. The company has reduced its exposure to commodity price fluctuations during the initial two-year plan by entering into a 21-month fixed pricing arrangement for 115 million pounds of payable zinc production from Caribou, at an average price of $1.25 per pound.

On Jan. 18, 2021, the company announced the appointment of Jeane Hull to its board of directors effective Feb. 1, 2021.

On Jan. 18, 2021, the company announced preliminary 2020 full-year and Q4 production results, and 2021 operating, capital and exploration expenditure guidance.

On Feb. 26, 2021, the company announced that it had entered into a binding term sheet that sets out the terms for an exploration joint venture with Arrow Minerals, wherein both parties agreed to grant the other reciprocal exploration rights to their exploration permits in the prospective Boromo gold belt in Burkina Faso, which the company believes is underexplored for base metals.

On March 30, 2021, the company announced that it had trucked its first ore concentrate from the Caribou mine since announcing the planned restart of operations on Jan. 15, 2021.

On March 31, 2021, the company reported its mineral reserves and mineral resources statements as of Dec. 31, 2020. Proven and probable mineral reserves have increased globally, and grades have reduced marginally due to an increase in net smelter return (NSR) value, resulting from reduced off-site costs and increased metal price forecasting. For further information, refer to the March 31, 2021, news release, entitled, "Trevali Reports 2020 Mineral Reserves and Resources: Increasing Mineral Reserves at Rosh Pinah and Caribou Mine."

In April, 2021, the 2021 annual treatment charge benchmark rates were agreed on for both zinc and lead. Zinc treatment charges were set at $159 per tonne and lead treatment charges were set at $136 per tonne, decreases of 47 per cent and 26 per cent, respectively, compared with the 2020 benchmark. Trevali's concentrate off-take agreements reference the annual benchmark treatment charge rates. These rates are retroactive and apply to concentrate produced during 2021, regardless of when the sale occurs.

On April 7, 2021, the company announced it had entered into a 15-year renewable power purchase agreement with Emerging Markets Energy Services Company (EMESCO) for the supply of solar power to the Rosh Pinah mine. The company has previously committed to achieving an overall greenhouse gas (GHG) emission reduction target of 25 per cent by 2025 from its 2018 baseline. This agreement with EMESCO is anticipated to deliver 30 per cent of the power requirements of Rosh Pinah during the life of the agreement and to reduce GHG emissions at the company level by 6 per cent.

On May 12, 2021, the company announced the results of the annual general meeting, with shareholders voting in favour of all items of business: the election of directors; the reappointment of the auditor; and the advisory vote on Trevali's approach to executive compensation.

On May 26, 2021, the company announced the appointment of David Schummer as chief operating officer, effective Aug. 30, 2021.

On June 3, 2021, the company published its 2020 sustainability report, the third annual report covering new performance targets and disclosures.

On Aug. 3, 2021, the company announced that a pilot plant testing program using Caribou run-of-mine and milled material at FLSmidth's rapid oxidative leach (ROL) process testing facility in Salt Lake City, Utah, is under way. If the pilot plant testing program indicates that the ROL technology has the potential to be successfully implemented at Caribou, it may allow Trevali to replace the existing flotation circuit at Caribou with atmospheric leach vessels and potentially an SX/EW train, introducing the possibility of producing base and precious metals on site, and thereby save transport costs and off-site treatment costs.

Q2 2021 financial and operational results conference call and webcast

The company will host a conference call and presentation webcast at 1 p.m. EST (10 a.m. PST) on Thursday, Aug. 5, 2021, to review the operating and financial results. Participants are advised to dial in five minutes prior to the scheduled start time of the call. A presentation will be made available on the company's website prior to the conference call.

Conference call dial-in details

Date:  Thursday, Aug. 5, 2021, at 1 p.m. EST

Toll-free dial-in (North America):  1-877-291-4570

International dial-in:  1-647-788-4919

Webcast:  A webcast will be available.

About Trevali Mining Corp.

Trevali is a global base metals mining company headquartered in Vancouver, Canada. The bulk of Trevali's revenue is generated from base metals mining at its four operational assets: 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 northern New Brunswick, Canada; and the wholly owned Santander mine in Peru. In addition, Trevali owns the Halfmile and Stratmat properties and the Restigouche deposit in New Brunswick, Canada, and the past-producing Ruttan mine in Northern Manitoba, Canada. Trevali also owns an effective 44-per-cent interest in the Gergarub project in Namibia as well as an option to acquire a 100-per-cent interest in the Heath Steele deposit, located in New Brunswick, Canada.

The shares of the company are listed on the Toronto Stock Exchange (symbol TV), the OTCQX (symbol TREVF), the Lima Stock Exchange (symbol TV) and the Frankfurt Stock Exchange (symbol 4TI). For further details on Trevali, readers are referred to the company's website and to Canadian regulatory filings on SEDAR.

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