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Perkoa Rosh Pinah
Investor Presentation
September 2018
Santander Caribou
Investor Presentation Santander Caribou September 2018 Perkoa - - PowerPoint PPT Presentation
Investor Presentation Santander Caribou September 2018 Perkoa Rosh Pinah TSX: TV | www.trevali.com TSX: TV | www.trevali.com Cautionary Note Regarding Forward-Looking Statements: This presentation contains forward -looking
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Perkoa Rosh Pinah
September 2018
Santander Caribou
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This presentation contains “forward-looking information” (also referred to herein as “forward-looking statements”) under the provisions of applicable Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will”, “occur” or “be achieved” or the negative connotation thereof. Forward-looking statements include, but are not limited to, those in respect of: the economic outlook for the mining industry; expectations regarding metal prices; the timing and amount of estimated future production; the current and planned commercial operations, initiatives and objectives in respect of certain projects of Trevali Mining Corporation (“Trevali” or “TV”), including the Perkoa, Caribou, Rosh Pinah and Santander mines (the “Mines”); the estimation of mineral reserves and mineral resources; the realization of mineral reserve estimates, changes in mineral resources and conversion of mineral resources to proven and probable mineral reserves; Trevali’s current and planned exploration initiatives; strategies and objectives in respect of the Mines; liquidity, capital resources and expenditures; sustainability and environmental initiatives and objectives; business development strategies and outlook; leverage metrics; debt repayment schedules; planned work programs and drilling programs in respect of the Mines; achieving projected recovery rates; anticipated mine life, recovery rates and
targeted cost reductions; exploration and expansion potential; success of exploration activities; permitting and certification timelines; currency fluctuations; requirements for additional capital; government regulation of mining operations; environmental matters; closure obligations and unanticipated reclamation expenses; title disputes or claims; limitations on insurance coverage; the timing and possible outcome of pending litigation; and other information that is based upon forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management. Forward-looking statements are necessarily based upon a number of factors and assumptions that, if untrue, could cause actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such statements. Assumptions have been made regarding, among other things: present and future business strategies and the environment in which Trevali will operate in the future, including commodity prices, anticipated costs and ability to achieve goals; Trevali’s ability to carry on its exploration and development activities; Trevali’s ability to meet its obligations under property agreements; the timing and results of drilling programs; the discovery of mineral resources and mineral reserves on Trevali’s mineral properties; the timely receipt of required approvals and permits, including those approvals and permits required for successful project permitting, construction and operation
ability to obtain financing as and when required and on reasonable terms; Trevali’s ability to continue operating; dilution and mining recovery assumptions; assumptions regarding stockpiles; the success of mining, processing, exploration and development activities; the accuracy of geological, mining and metallurgical estimates; no significant unanticipated operational or technical difficulties; maintaining good relations with the communities; no significant events or changes relating to regulatory, environmental, health and safety matters; certain tax matters; and no significant and continuing adverse changes in general economic conditions or conditions in the financial markets (including commodity prices, foreign exchange rates and inflation rates). Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used.
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Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that may cause the actual results, level of activity, performance or achievements of Trevali and/or the Mines to be materially different from those expressed or implied by such forward-looking statements, including but not limited to, those in respect of: risks related to the integration of acquisitions; volatility of the price of zinc, lead, silver and other metals; international operations including economic and political instability in foreign jurisdictions in which Trevali operates; current global financial conditions; joint venture operations; actual results of current and planned exploration activities; actual results of drilling programs; discrepancies between actual and estimated production, mineral reserves and mineral resources, grade and metallurgical recoveries; failure to replace mineral reserves; mining operational and development risks; actual results of current reclamation activities; environmental policies and risks; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; changes in the market, demand, supply and/or uses of zinc and copper; accidents; labour disputes; delays in obtaining governmental approvals or financing or in the completion of development or construction activities and other risks of the mining industry; inaccuracies or changes in the consolidated zinc production, exploration and operational guidance for the Mines; inaccuracies or changes in the analysis of the exploration potential of the Mines; failure to complete the work programs or drilling programs at the Mines; delays, suspensions or technical challenges associated with capital projects; risks relating to reliance on historical data; failure of plant, equipment or processes to operate as anticipated; inaccuracies or changes in the growth pipelines of the Mines; taxation risks; title risks; opposition from community or indigenous groups; compliance with laws, including environmental laws; exchange controls; higher prices for fuel, steel, power, labour and other consumables; political or economic instability and unexpected regulatory changes; as well as those factors discussed in the section entitled “Risk Factors” in Trevali’s most recent management’s discussion and analysis and annual information form available under Trevali’s profile on SEDAR at www.sedar.com. Although Trevali has attempted to identify important factors, assumptions and risks that could cause actual results to differ materially from those contained in forward-looking statements, there may be others that cause results not to be as anticipated, estimated or intended. There can be no assurance that such forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking
expectations and opinions of management on the date the statements are made and, accordingly, are subject to change. Trevali assumes no obligation to update any forward-looking statements that are included in this presentation, whether as a result of new information, future events or otherwise, except as required by law. Non-IFRS Measures This presentation refers to “EBITDA” (earnings before interest, taxes, depreciation and amortization), “free cash flow”, “site cash operating cost per tonne milled”, and “site cash operating cost per pound of payable zinc equivalent produced”, which are financial performance measures with no standard meaning under International Financial Reporting Standards (“IFRS”). Such non‐IFRS financial measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Management uses these measures internally to evaluate the underlying
evaluate the results of the underlying business of Trevali. Management understands that certain investors, and others who follow Trevali’s performance, also assess performance in this way. Management believes that these measures reflect Trevali’s performance and are better indications of its expected performance in future periods. This data 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. The information presented herein was approved by management of Trevali on August 21, 2018.
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Certain statements represent forward looking information, see “Cautionary Note Regarding Forward-Looking Statements”. Such forward-looking information assumes normal operating conditions and achievement of production and cost guidance.
Global Top-10 Zinc Producer Pure-play producer with industry-leading zinc leverage (85% of revenue from zinc) Production increases for 5 straight years Well positioned for further growth Disconnect between current zinc pricing and future supply growth Four operating zinc mines Perkoa Mine (Burkina Faso) Caribou Mine (Canada) Rosh Pinah Mine (Namibia) Santander Mine (Peru) Diversified Production in Stable Pro-Mining Jurisdictions Significant Organic NAV Growth Opportunities Strong exploration team Mineral resources at all mines remain open for expansion with exploration drill programs
Strong regional potential in proximity to
infrastructure with 60,000-metre 2018 drill programs underway Strong Financial Position and Leadership Proven management and technical teams – Execution and Delivery Solid cash flow profile, strong treasury (plus-$100 million) and low debt level – poised for growth Glencore: a cornerstone strategic shareholder (25.5%) providing strong technical and logistical support
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*Constitutes forward-looking information; see “Cautionary Note Regarding Forward-Looking Statements”. Cash costs (net of by-products) are based on various assumptions and estimates, including, but not limited to: production volumes, commodity prices (Zn: $1.25/lb Pb: $1.00/lb Ag: $19/lb), foreign currency exchange rates (N$/USD: 13.00; XOF/USD: 609; PEN/USD 3.25; C$/USD $1.25) and normal operating conditions. Trevali’s interest is 90% of Perkoa and 90% of Rosh Pinah. **Site operating cost per tonne milled is a non-IFRS measures. See “Non-IFRS Measures”
2018 consolidated zinc production guidance*
Santander Mine, Peru
Caribou Mine, Canada
Perkoa Mine, Burkina Faso
164-174* million payable lbs. Rosh Pinah Mine, Namibia
400-427 million payable lbs Zinc 44-46 million payable lbs by-product Lead 1.4-1.5 million payable ozs by-product Silver
Site operating costs of US$60-$66 per tonne.**
Zinc Mines Projects/Other Assets
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2018 forecast production is from the lower end of disclosed guidance and constitutes forward-looking information; see “Cautionary Note Regarding Forward-Looking Statements”
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Four years of continual zinc production growth with a strong forecast 2018
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Share Capital: (as of September 7, 2018, C$0.71/share) Shares issued/outstanding: 831 million Shares fully diluted: 840 million Market Capitalization: C$590 million Cash Position:
Debt Outstanding:
Major Shareholders:
Glencore PLC 25.5% Blackrock 5.9% M&G Investments 3.3% CI Funds 2.8% Oppenheimer Funds 2.0% J.P. Morgan Asset Management 1.8% Dimensional Fund Advisors 1.6% Colonial First State 1.6% Fiera Capital 1.4% CQS - New City Investment 1.1% Total Institutional Ownership (ex-Glencore): ~45%
Sell-Side Mining Analyst Research Coverage*
Analyst Firm Dalton Baretto Canaccord Genuity Oscar Cabrera CIBC Capital Markets Stefan Ioannou Cormark Securities Inc. Jacques Wortman Eight Capital Ian Parkinson GMP Securities L.P. Pierre Vaillancourt Haywood Securities Inc. Jose Inurritegui Kallpa Securities S.A.B Shane Nagle National Bank Jeff Woolley Paradigm Capital Inc. Brian MacArthur Raymond James Ltd Sam Crittenden RBC Capital Markets Orest Wowkodaw Scotiabank Craig Hutchison TD Securities Inc.
*The above investment firms and equity analysts provide research reports on Trevali Mining Corporation. Any opinions, estimates, forecasts or other analyses, including prior or future Trevali performance from any source is the opinion of the writer and is theirs alone and does not represent the opinions, estimates or forecasts of Trevali or its management. Trevali does not, by any reference, imply any endorsement of,
TSX:TV BVL(Lima):TV US-OTCQX: TREVF
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Benefits of the Glencore Relationship
Access to Glencore Technical Services
Supply chain / logistical support as required Increased exposure to opportunities Access to attractive debt facilities Long-term & supportive shareholder (partner since 2010 and shareholder since 2012)
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Optimize existing operations
➢ Implement Best Practices & continuously improve ➢ Near-mine exploration to add reserves and extend mine life ➢ Commitment to safety and the environment ➢ Increase cash flow & improve stability and predictability ➢ Pay down debt
Pursue organic growth opportunities
➢ Bathurst Mining Camp: Mine to Mill strategy encompassing Caribou, Restigouche, Murray Brook, Halfmile and Stratmat ➢ Rosh Pinah (RP) 3000: Evaluating expanding mill throughput by 50% to 3,000 tpd, increasing production and lowering unit
➢ Exploration to drive production optionality
Evaluate growth opportunities
➢ Focus on zinc and copper ➢ Both producing and development stage assets could be considered ➢ Must be accretive - maintain track record of disciplined and patient acquisitions
Continuously adding shareholder value through operating improvements, exploration and growth
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Santander acquired for $6.5 million – Caribou for $24 million Glencore African Zinc Mine Acquisitions:
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Improvements Made:
➢ Implementing best practices ➢ Focus on exploration ➢ Mine life extensions ➢ Resource and reserve growth ➢ Operating cost reduced over 2016 ➢ Generated approx. $65 million in FCF to June 30, 2018 ➢ 14% FCF yield to TV shareholders in 10 months ➢ Increased Rosh Pinah ownership to 90% (from 80%) for $24 million
Cost savings and growth initiatives
➢ Production expansion at Rosh Pinah under evaluation (RP3000 study). A potential 50% increase in mill throughput, with a decrease in unit costs ➢ Conversion to more efficient power generation at Perkoa expected to result in $5/tonne (5%) reduction to on-site
Glencore Trevali
Perkoa & Rosh Pinah
Effective Date Dec-16 Dec-17 + 1 yr Life-of-Mine 2020 2022 + 2 yrs Reserves (Mt) 2.48 3.33 34% Zn Grade (%) 15.10 13.06
Contained Zn (t) 376,312 434,700 16% M&I Resources (Mt) 4.26 4.85 14% Zn Grade (%) 14.60 13.73
Contained Zn (t) 621,589 665,700 7% LOM ZnEq Payable Production (kt) 293 342 17% LTM Site Operating Cost (US$/t milled) 114.3 104.1
Effective Date Dec-16 Dec-17 + 1 yr Life-of-Mine 2024 2029 + 5 yrs Reserves (Mt) 5.08 7.74 52% Zn Grade (%) 8.78 7.61
Contained Zn (t) 446,700 589,100 32% M&I Resources (Mt) 9.94 10.76 8% Zn Grade (%) 7.85 7.78
Contained Zn (t) 780,500 836,400 7% LOM ZnEq Payable Production (kt) 384 510 33% LTM Site Operating Cost (US$/t milled) 54.9 54.8 0%
Comments:
Perkoa Rosh Pinah
Site operating cost per tonne milled is a non-IFRS measures. See “Non-IFRS Measures”.
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Balance Sheet & Liquidity
As of June 30, 2018: ➢ $102 million in cash & equivalents ➢ $143 million in debt (long-term debt and lease obligations) ➢ Net debt of $41 million ➢ $160 million working capital ➢ Total liquidity of $166 million ➢ Annual debt repayments of $34 million in 2018 and $40 million in 2019
All-in Margin Breakdown
➢ YTD AISC of $0.88/lb ➢ Debt repayment approx. $0.08/lb ➢ Non-sustaining capital, interest, corporate G&A and exploration expenses approx. $0.10/lb ➢ AIC before debt repayment of <$1.00/lb Zn ➢ H2-2018 expected to benefit from: ➢ Improved grades at Rosh Pinah ➢ Lower costs at Santander
(in US$ mln) Costs Margin Zinc produced (mln lb of payable zinc) 203 Zinc price ($/lb) realized before pp adj. $1.45 Provisional pricing adjustments ($/lb)
Zinc price realized ($/lb) $1.35 Revenue (net, after TC and pp) $249 Production costs $106 Smelting & refining costs $61 Distribution costs $14 Royalty expenses $7 By-product revenue
Inventory stock movement
C1 Cash Cost $150 C1 Cash Cost per Pound $0.74 $0.61 Sustaining Capital $30 All-in Sustaining Costs (AISC) $179 AISC per Pound $0.88 $0.47 Six months ended June 30, 2018
Revenues include effects of settlement adjustments on sales from prior quarters and is calculated on a 100% basis. C1 Cash Cost per Pound and All-in Sustaining Cost per Pound are non-IFRS measures. See ‘Non-IFRS Measures'
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0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8
P/NAV (x)
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
EV/EBITDA (2019E)
0.0 1.0 2.0 3.0 4.0 5.0 6.0
P/CF (2019E)
TSX:TV TSX:TI TSX:ASND TSX:HBM TSX:LUN NYSE:NEXA TSX:TECK.B TSX:CS TSX:CMMC TSX:TKO 0.2 0.3 0.4 0.5 0.6 0.7
2.0 3.0 4.0 5.0
P/NAV (x)
*The above estimates and multiples are based on consensus estimates compiled by S&P Capital IQ. Trevali does not, by any reference, imply any endorsement of, or concurrence with, such information, conclusions or recommendations. Trevali does not distribute research reports.
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Source: Capital IQ consensus estimates
Potential to be even lower with anticipated exploration success
?
Caribou since 2015
TSX: TV | www.trevali.com Location Burkina Faso (150 km west of Ouagadougou) Ownership 90% Trevali, 10% Government of Burkina Faso Type of deposit Volcanogenic Massive Sulphide (VMS) Mining Underground - Transversal and retreat Processing Concentrator plant with crushing, milling, flotation, thickening and filtration End product Zn concentrate Infrastructure 2,000 tpd underground mining operation and processing mill Current mine life 5 years; remains open, drilling ongoing
Perkoa Mine
Primary metal
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TSX: TV | www.trevali.com Category Tonnes Zn (%) Proven Reserves 2,290,000 13.9 Probable Reserves 1,040,000 11.1 Proven and Probable Reserves 3,330,000 13.1 Measured Resources 2,630,000 15.7 Indicated Resources 2,220,000 11.4 Measured and Indicated Resources 4,850,000 13.7 Inferred Resources 680,000 8.9
See “Cautionary Note Regarding Mineral Reserves and Mineral Resources” for additional information on the mineral reserves and mineral resources in above table. Proven & Probable Reserves included in Measured & Indicated Resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
(1) 2017 production is full year production. Trevali acquired ownership (90%) of Perkoa as of Aug 31, 2017. (2) Production guidance constitutes forward-looking information. see “Cautionary Note Regarding Forward-Looking Statements”. (3) Site operating cost per tonne milled and C2 cost per pound of zinc (net of by-products) are non-IFRS measures. See “Non-IFRS Measures”
Reserves and Resources (as of Dec. 31/2017) 2017 Production(1) (100% basis)
Average head grade of 15.2% Zn and 92.5% recovery
2018 production guidance(2) (100% basis)
Site operating costs US$103-113/tonne
zinc (net of by-products)(3)
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➢ Current mine life of 5 years ➢ Remains open and actively drilling
1.47 billion lbs contained Zn (in measured & indicated resources - as of Dec. 31/2017)
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*Outside of the currently delineated reserves and resources, the exploration potential quality and grade is conceptual in nature and there has been insufficient exploration to define additional mineral
Statements”.
Perkoa Mine cross section
Regional VTEM geophysics highlighted conductors for follow-up screening
follow-up; multiple clusters at 5-km intervals along prospective Perkoa Mine Horizon
Flin Flon, Noranda, etc.; approx. 40-100 million-tonne endowments)
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TSX: TV | www.trevali.com Location Bathurst Mining Camp, New Brunswick, Canada Ownership 100% Trevali Type of deposit Volcanogenic Massive Sulphide (VMS) Mining Underground - Modified Avoca (cut-and-fill) Processing Concentrator plant with crushing, milling, flotation, thickening and filtration End product Zn concentrate and Pb-Ag concentrate Infrastructure 3,000 tpd underground mining operation and processing mill Current mine life 6 years; remains open, drilling ongoing
CANADA NEW BRUNSWICK
Primary metal
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Caribou Mill and Mine
By-product metals
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See “Cautionary Note Regarding Mineral Reserves and Mineral Resources” for additional information on the mineral reserves and mineral resources in above table.
Reserves and Resources (as of Dec. 31/2017) 2017 Production
79.9 million payable lbs Zinc 30.9 million payable lbs Lead 890,300 payable ozs Silver
Average head grade of 5.9% Zn and 77% recovery
2018 production guidance(1)
(1) Production guidance constitutes forward-looking information. see “Cautionary Note Regarding Forward-Looking Statements”. (2) Site operating cost per tonne milled and C2 cost per pound of zinc (net of by-products) are non-IFRS measures. See “Non-IFRS Measures”
86-90 million payable lbs Zinc 27-28 million payable lbs Lead 627,000-658,000 payable ozs Silver
Site operating costs US$55-61/tonne milled. C2 cost of US$0.68-0.74 per lb zinc (net of by- products)(2)
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Category Tonnes Zn (%) Pb (%) Ag(g/t) Cu (%) Proven Reserves 2,620,000 5.8 2.1 64.3 0.35 Probable Reserves 2,480,000 5.9 2.2 62.1 0.39 Proven & Probable Reserves 5,110,000 5.8 2.2 63.2 0.37 Measured Resources 5,870,000 6.1 2.3 67.0 0.37 Indicated Resources 3,030,000 6.1 2.3 70.0 0.39 Measured & Indicated Resources 8,890,000 6.1 2.3 68.0 0.38 Inferred Resources 7,000,000 5.7 2.1 65.0 0.30
➢ Current mine life of 6 years ➢ Remains open and actively drilling
1.2 billion lbs contained Zn (in measured & indicated resources - as of Dec. 31/2017)
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additional zones (North Limb Extension)
drilling to hit tight targets opens up
from surface
underground resource delineation drilling in “Hinge” area
Caribou Exploration Potential*
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*Outside of the currently delineated reserves and resources, the exploration potential quality and grade is conceptual in nature and there has been insufficient exploration to define additional mineral
Statements”.
Resource Tonnes Zn % Pb % Cu % Ag (g/t) Au (g/t) Indicated 4,700,000 5.31 2.07 0.41 48.5 0.6 Inferred 2,400,000 4.76 2.07 0.70 38.8 0.4 Resource Tonnes Zn % Pb % Cu % Ag (g/t) Au (g/t) Measured 400,000 5.92 1.99 0.46 40 0.6 Indicated 7,400,000 7.00 2.37 0.16 35 0.3 Measured & Indicated 7,800,000 6.94 2.35 0.18 36 0.3 Inferred 6,500,000 5.62 1.51 0.15 23 0.1
Six VMS Deposits Providing Optionality and Long-term Feed to the Caribou Mill
Restigouche
*Based on a Mine Plan Reopening Report dated March 2009 and prepared by CSI Mining and Engineering, for Blue Note Metals Inc. Historic resource estimate is based on 236 diamond drill holes and past open pit production, using a 7% lead+zinc cut-off grade. Gold was not estimated. These resources should be viewed as historic and neither the Canadian Securities Administrators nor the US Securities and Exchange Commission recognize the reporting of historic resources, they are considered conceptual in nature. It cannot be assumed that all or any part of historic geological resources will ever be upgraded to a higher category. **Historic reserve estimate is based on 1998 Noranda internal Heath Steele Mines report. These reserves should be viewed as historic and neither the Canadian Securities Administrators nor the US Securities and Exchange Commission recognize the reporting of historic reserves/resources, they are considered conceptual in nature. It cannot be assumed that all or any part of historic geological reserves/resources will ever be upgraded to a higher category. See “Cautionary Note Regarding Mineral Reserves and Mineral Resources” for additional information on the mineral reserves and mineral resources in above tables. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Heath Steele
Category Tonnes Zn% Pb% Cu% Ag (g/t) Historic Resources Remaining* 861,882 7.07 5.25 0.33 78 Past Production 1997 198,000 6.6 5.34 127 Past Production 2008 557,978 6.4 4.7 100 Category Tonnes Zn% Pb% Cu% Ag (g/t) Historic Proven & Probable Reserves** 743,434 5.11 2.18 1.16 91.5 Historic Possible Reserves** 292,530 4.02 1.49 1.36 67.0
Halfmile (fully permitted mine) Stratmat
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Resource Tonnes Zn % Pb % Cu % Ag (g/t) Au (g/t) Measured 3,681,000 5.57 1.87 0.36 70.5 0.56 Indicated 1,603,000 4.48 1.63 0.70 65.3 0.88 Measured & Indicated 5,284,000 5.24 1.80 0.46 68.9 0.65 Inferred 125,000 2.58 0.92 2.16 47.3 0.54
Murray Brook(1)
(1) Letter of Intent to enter option agreement to earn 75% interest from Puma Exploration. Resources estimates based on Puma Exploration NI 43-101 report filed on SEDAR February 20, 2017.
3.5 billion lbs contained Zn (in measured and indicated resources - as of Dec. 31/2017)
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*Based on potential of continued utilization of the Caribou Mill Complex to process mineral feed from Trevali’s other projects and deposits in the Bathurst Mining Camp beyond the operating life of the Caribou underground mine. Subject to additional engineering studies ,permitting and operating plans.
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100 150 200 250
ZnEq Production (mm lbs) Caribou Restigouche Murray Brook Halfmile / Stratmat
TSX: TV | www.trevali.com Location
Namibia (600 km south of Windhoek)
Ownership
90% Trevali, 10% Namibian Empowerment Partners
Type of deposit
Sediment hosted
Mining
Underground – Sub-level open stoping
Processing
Concentrator plant with crushing, milling, flotation, thickening and filtration
End product
Zn concentrate and Pb-Ag concentrate
Infrastructure
2,000 tpd underground mining operation and processing mill
Current mine life
12 years; remains open, drilling ongoing
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Rosh Pinah Mine
AFRICA NAMIBIA
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Primary metal By-product metals
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Reserves and Resources (as of Dec. 31/2017) 2017 Production(1) (100% basis)
88.2 million payable lbs Zinc 14.5 million payable lbs Lead 239,572 payable ozs Silver
Average head grade of 8.8% Zn and 83.6% recovery
2018 production guidance(2) (100% basis)
95-105 million payable lbs Zinc 5.7-6.0 million payable lbs Lead 123,000-129,000 payable ozs Silver
Site operating costs US$49-54/tonne milled. C2 cost of US$0.55-0.60 per lb zinc (net of by- products)(3)
Category Tonnes Zn (%) Pb (%) Ag(g/t) Proven Reserves 2,660,000 9.1 1.3 18 Probable Reserves 5,080,000 6.8 1.4 20 Proven and Probable Reserves 7,740,000 7.6 1.4 20 Measured Resources 4,370,000 8.5 1.9 27 Indicated Resources 6,400,000 7.3 1.5 24 Measured and Indicated Resources 10,760,000 7,8 1.7 25 Inferred Resources 3,000,000 6.5 1.1 31
See “Cautionary Note Regarding Mineral Reserves and Mineral Resources” for additional information on the mineral reserves and mineral resources in above table. Proven & Probable Reserves included in Measured & Indicated Resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
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(1) 2017 production is full year production. Trevali acquired ownership (80%) of Rosh Pinah on Aug 31, 2017. In Q2-2018, Trevali increased its interest to 90%. (2) Production guidance constitutes forward-looking information. see “Cautionary Note Regarding Forward-Looking Statements”. (3) Site operating cost per tonne milled and C2 cost per pound of zinc (net of by-products) are non-IFRS measures. See “Non-IFRS Measures”
➢ Current mine life of 12 years ➢ Remains open and actively drilling
1.85 billion lbs contained Zn (in measured & indicated resources - as of Dec. 31/2017)
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Rosh Pinah Exploration Potential*
for significant expansion, specifically Western Orefield (WF)
modern exploration program undertaken until now
program underway with additional 6,000-metre surface drill program contingent on results
*Outside of the currently delineated reserves and resources, the exploration potential quality and grade is conceptual in nature and there has been insufficient exploration to define additional mineral resources. It is uncertain if further exploration will result in the target being delineated as a mineral resource. Constitutes forward-looking information, see “Cautionary Note Regarding Forward-Looking Statements”.
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23 ➢ Landholdings form part of the under-explored Gariep Belt that hosts Rosh Pinah, Gergarub and Skorpion ➢ EPL2616 is under-explored: first target tested by Anglo in 2008 was a discovery under cover (Gergarub - grades and mineralogy similar to Rosh Pinah) ➢ Remaining targets untested ➢ Potential to discover sufficient additional tonnage to support longer-term Rosh Pinah mill expansion decisions
Rosh Pinah Region, Namibia
Satellite image of Rosh Pinah, Gergarub and surrounding projects, Namibia
Significant exploration potential remains
Gergarub
TSX: TV | www.trevali.com Location
Peru (approx. 200 km northeast of Lima)
Ownership
100% Trevali
Type of deposit
Carbonate Replacement Deposit (CRD)
Mining
Underground - Modified Avoca (cut-and-fill)
Processing
Concentrator plant with crushing, milling, flotation, thickening and filtration
End product
Zn concentrate and Pb-Ag concentrate
Infrastructure
2,000 tpd underground mining operation and processing mill
Current mine life
5 years; remains open, drilling ongoing
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Primary metal By-product metals
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2017 Production
53.1 million payable lbs Zinc 10.5 million payable lbs Lead 602,700 payable ozs Silver
Average head grade of 4.5% Zn and 82% recovery
2018 production guidance(1)
55-58 million payable lbs Zinc 11-12 million payable lbs Lead 654,000-687,000 payable ozs Silver
Site operating costs US$38-42/tonne milled. C2 cost of US$0.49-0.53 per lb zinc (net of by- products)(2)
Reserves and Resources (as of Dec. 31/2017)
See “Cautionary Note Regarding Mineral Reserves and Mineral Resources” for additional information on the mineral reserves and mineral resources in above table. Proven & Probable Reserves included in Measured & Indicated Resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
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(1) Production guidance constitutes forward-looking information. see “Cautionary Note Regarding Forward-Looking Statements”. (2) Site operating cost per tonne milled and C2 cost per pound of zinc (net of by-products) are non-IFRS measures. See “Non-IFRS Measures”
Category Tonnes Zn (%) Pb (%) Ag(g/t) Proven Reserves 460,000 3.8 0.8 26 Probable Reserves 1,460,000 4.6 0.7 32 Proven and Probable Reserves 1,930,000 4.4 0.8 31 Measured Resources 1,057,558 4.2 0.8 27 Indicated Resources 1,930,033 5.1 0.9 38 Measured and Indicated Resources 2,987,591 4.8 0.8 34 Inferred Resources 3,080,000 5.1 0.5 32 Category Tonnes Zn (%) Pb (%) Ag(g/t) Inferred Resources 10,100,000 4.1 0.2 15 Magistral North, Central, South Orebodies: Santander Pipe Deposit:
➢ Current mine life of 5 years ➢ Remains open and actively drilling
314 million lbs contained Zn (in measured & indicated resources - as of Dec. 31/2017)
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Santander Pipe High Grade Target
Zn & 0.43% Cu
and delineation to facilitate long-range mine planning**
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*Outside of the currently delineated reserves and resources, the exploration potential quality and grade is conceptual in nature and there has been insufficient exploration to define additional mineral resources. It is uncertain if further exploration will result in the target being delineated as a mineral resource. Constitutes forward-looking information. see “Cautionary Note Regarding Forward-Looking Statements”.
Two Principal Targets: Magistrals + Santander High-Grade Pipe
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PRESIDENT & CEO Base metal deposit specialist with over 20-years project experience from exploration and resource definition to permitting and production in Europe and the America’s on behalf of Pasminco Exploration, Anglo American and TSX-listed companies. Co-founded Trevali in 2007 to position the Company for anticipated global Zn deficits.
Bryant Schwengler
CHIEF OPERATING OFFICER 17 years of experience in a variety of roles including senior management positions in both underground and open-pit mining operations. Bryant commenced his career with Mount Isa Mines Ltd at Ernest Henry Mine (Cu-Au), then transitioned to Xstrata Zinc and ultimately Glencore at the world-class Mt Isa Zinc
in early 2016.
Paul Keller, P.ENG.
SVP MAJOR PROJECTS & TECHNICAL SUPPORT 30 years of mine operations experience in Canada and Peru. Paul began his career with Rio Algom and has also worked in various management roles with Barrick Gold's Hemlo mine in
engineering and maintenance.
Steve Molnar
VP GENERAL COUNSEL & CORPORATE SECRETARY Joined Trevali from McCarthy Tetrault LLP, where he practiced corporate and securities law with a focus on the mining industry.
Gerbrand Van Heerden
CHIEF FINANCIAL OFFICER 18 years experience in the finance and mining industry. Gerbrand began his career at Deloitte and has worked at Metorex Limited as Group Financial Controller and moved to senior management positions there prior to joining Rosh Pinah Zinc Corp. as CFO in
Institute of Chartered Accountants of South Africa and a Chartered Professional Accountant in British Columbia (CPABC)
Alex Terentiew
SVP CORPORATE DEVELOPMENT & INVESTOR RELATIONS Joined from BMO Capital Markets, where he was a top-ranked analyst, covering the base metals sector and providing research papers
and commodity research.
Steve Stakiw
VP IR/CORPORATE COMMUNICATIONS Over 25 years of geology/mining industry and research/finance market experience and has held a senior management role with a leading mining research and investment publication.
Daniel Marinov
VP OF EXPLORATION Over 24 years of international experience in exploration and underground mining, and has held senior management roles with Rio Tinto and Anglo American (including project manager at Anglo's Michiquillay porphyry Cu- Au-Mo deposit in Peru).
Yan Bourassa
VP MINERAL RESOURCE MANAGEMENT Geologist with 20 years of experience in the resource industry in Africa and the Americas, whose experience ranges from exploration to
Mike Hoffman, CHAIRMAN
Over 35 years global mine development experience including Vice President Operations at Yamana Gold, Desert Sun and Goldcorp, and is on the Board of Eastmain Resources.
Chris Eskdale
Global Head Industrial Zinc for Glencore Plc.
Dan Myerson
Manages Glencore's Canadian zinc business.
Anton Drescher
Certified Management Accountant with extensive public company board and officer experience
Russell Ball
Past Executive VP, CFO and Corporate Development
Goldcorp Inc. Previously Strategic and Business Planning, Executive VP and CFO with Newmont Mining Corporation. He is both a Chartered Accountant from the Institute of Chartered Accountants of South Africa and a Certified Public Accountant in Colorado.
Jessica McDonald
Chair of Canada Post Corporation. Recently President & CEO of BC Hydro. Previous roles include Executive VP at HB Global Advisors Corp, positions in the British Columbia provincial government including Deputy Minister to the Premier, Cabinet Secretary, and Head of the BC Public Service.
Dan Isserow
Past President & CEO of major Canadian restaurant franchise. Currently the Co-Founder, President and CFO of company focused on the expanding market for digital sign applications. He is a Chartered Accountant from the Institute of Chartered Accountants of South Africa.
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TSX: TV | www.trevali.com
Forecast ~2% per year through 2022
Global Zinc Demand Increase
Driven by GDP growth, urbanization & infrastructure development, and as a “mid-cycle” commodity with expanding markets for consumer goods.
Zinc Supply Remains Constrained
largely flat – in favour of the miners.
payabilities in 2019.
tonnes/year
Strong zinc prices
Disconnect between current pricing environment & supply Forecast of continued strong zinc prices in reaction to ongoing near- term supply deficits
US$1.35/lb
US$2,967/tonne
2018
US$1.80/lb
US$3,975/tonne
2019
US$1.22/lb
US$2,700/tonne
LONG-TERM
Wood Mackenzie zinc price forecasts:
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Source: Wood Mackenzie research
US$1.63/lb
US$3,600/tonne
2020
Cash to three months backwardation
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(Agriculture, Batteries, Renewable Power)
14 million tonnes
consumed annually. Demand is forecast to increase by
2022. APPROX 40%
Utilized in die-casting, production of brass and bronze, and into oxides and chemicals. Galvanizing 60% Brass/Bronze 11% Zinc diecast alloys 13% Zinc chemicals 9% Zinc Semis 5%
APPROX 60%
Utilized for its corrosion resistance (galvanized steel, rebar, autos, structural steel) Other 2%
Initiatives propelling new potential uses
Zinc nutrient/fertilizer applications Zinc fertilizer can both significantly increase crop yield and boost nutrient value. Zinc Nutrient Initiative and Zinc Saves Kids programs spearheading new, significant uses. Zinc battery technology Advances in renewable grid power storage applications and fuel cells. Zinc is a highly stable metal, has excellent power density and is sustainable.
Zinc is an excellent anti-corrosion metal, is difficult to substitute and typically forms a minor cost component in its applications.
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TSX: TV | www.trevali.com
Source: International Zinc Association; Zinc.org
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Cautionary Note Regarding Mineral Reserves and Mineral Resources:
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Scientific and technical information contained in this presentation was reviewed and approved by EurGeol Dr. Mark D. Cruise, TV's President and Chief Executive Officer, and a “qualified person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Dr. Cruise is not independent of TV as he is an officer, director and shareholder of TV. Certain technical information in this presentation was derived from the following technical reports of Trevali in respect of the Perkoa, Caribou, Rosh Pinah, and Santander mines: 1. The technical report entitled “Technical Report on the Perkoa Mine, Burkina Faso” dated April 12, 2018 as prepared by Roscoe Postle Associates Inc. and by “qualified persons” Torben Jensen, P.Eng., Ian T. Blakley, P.Geo., EurGeol, Tracey Jacquemin, Pr.Sci.Nat., and Avakash A. Patel, P.Eng. (the “Perkoa Technical Report”); 2. The technical report entitled “Technical Report on the Caribou Mine, Bathurst, New Brunswick, Canada” dated May 31, 2018 as prepared by Roscoe Postle Associates Inc. and by “qualified persons” Torben Jensen, P.Eng., Ian T. Blakley, P.Geo., EurGeol, Tracey Jacquemin, Pr.Sci.Nat., and Shaun C. Woods, P.Eng. (the “Caribou Technical Report”); 3. The technical report entitled “Technical Report on the Rosh Pinah Mine, Namibia” dated May 1, 2018 as prepared by Roscoe Postle Associates Inc. and by “qualified persons” Torben Jensen, P.Eng., Ian T. Blakley, P. Geo., EurGeol, Tracey Jacquemin, Pr.Sci.Nat., and Avakash A. Patel, P.Eng. (the “Rosh Pinah Technical Report”); and 4. The technical report entitled “Mineral Reserve Estimation Technical Report for the Santander Zinc Mine, Province de Huaral, Peru” dated March 31, 2017 as prepared primarily by SRK Consulting (Canada) Inc. and SRK Consulting (Peru) S.A. and by “qualified persons” Benny Zhang, P.Eng., Gary Poxleitner, P.Eng., Gilles Arseneau, P.Geo., Leonard Holland, C.Eng., and David Maarse (the “Santander Technical Report”). The Technical Reports are available on the SEDAR profile of TV at www.sedar.com. Additionally, where TV discusses exploration/expansion potential herein, any potential quantity and grade is conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
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Cautionary Note to U.S. Investors:
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Unless otherwise indicated, all mineral resource and mineral reserve estimates disclosed in this presentation have been prepared in accordance with NI 43-101 of the Canadian Securities Administrators. The definitions used in NI 43-101 are incorporated by reference from the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards for Mineral Resources and Mineral Reserves adopted by the CIM Council on May 10, 2014. Disclosure standards under NI 43-101 differ in material respects from the requirements of the United States Securities and Exchange Commission (the “SEC”), and reserve and resource information included on this Website may not be comparable to similar information concerning U.S. companies. Under SEC Industry Guide 7, mineralization may not be classified as a "reserve" unless the determination has been made that is “part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination”. In addition, the term “resource” does not equate to the term “reserve”. While the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are recognized and required to be disclosed by NI 43-101, the SEC does not recognize them. You are cautioned that, except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic value. Inferred mineral resources have a high degree of uncertainty as to their existence and as to whether they can be economically or legally mined. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Therefore, you are cautioned not to assume that all
higher category. Likewise, you are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded into mineral reserves. Accordingly, information concerning descriptions of any mineral deposits, mineralization and resources on this Website may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC.
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Trevali Mining Corporation
Suite 1400-1199 West Hastings Street Vancouver, BC, V6E 3T5, CANADA Tel: 1-604-488-1661 Fax: 1-604-629-1425 www.trevali.com
A member of the
Steve Stakiw
Vice President, Investor Relations and Corporate Communications sstakiw@trevali.com Direct phone:1-604-638-5623