investor santander caribou presentation€¦ · global top-10 zinc producer 2019 consolidated zinc...

TSX: TV | www.trevali.com


Perkoa Rosh Pinah

Investor

Presentation

January 2019

Santander Caribou


Cautionary Note Regarding Forward-Looking Statements:

2

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

operating efficiencies; costs and expenditures, including capital and operating costs; costs and timing of the development of new deposits; off-take obligations;

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; information relating to Trevali’s

normal course issuer bid, including the number of shares that may be purchased thereunder and the timing and terms and conditions of same; 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

of Trevali’s mineral projects; the costs of operating and exploration expenditures; Trevali’s ability to operate in a safe, efficient and effective manner; Trevali’s

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.


Cautionary Note Regarding Forward-Looking Statements (cont.):

3

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

statements. Accordingly, readers should not place undue reliance on forward-looking statements. Forward-looking statements are based on the beliefs,

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

operating performance of Trevali for the relevant reporting periods. The use of these measures enables management to assess performance trends and to

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 January 15, 2019.


Trevali – Base Metal Producer with Strong Cash Flow Generation

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

Industry-leading zinc

leverage (85% of

revenue from zinc)

Production increases

for 5 straight years

Disconnect between

current zinc pricing

and future supply

constraints

Four operating

zinc mines

Perkoa Mine

(Burkina Faso)

Caribou Mine

(Canada)

Rosh Pinah Mine

(Namibia)

Santander Mine

(Peru)

Diversified Production

in Pro-Mining

Jurisdictions

Significant

Organic NAV Growth

Opportunities

Mineral resources at all

mines remain open for

expansion with

exploration drill programs

ongoing

Advanced Project pipeline

– Rosh Pinah 2.0,

Bathurst Mining Camp,

Santander Pipe, Perkoa

Frontier VMS Belt

Strong Financial

Position and Leadership

Proven management and

technical teams –

Achieved 2018 guidance

Strong balance sheet and

liquidity with low leverage

Glencore:

a cornerstone strategic

shareholder (25.8%)

providing strong technical

and logistical support

NCIB for up to C$20

million (6.5% of free float)

4


*Constitutes forward-looking information; see “Cautionary Note Regarding Forward-Looking Statements”. C1 Cash Costs are based on various assumptions and estimates, including,

but not limited to: production volumes, commodity prices (Zn: $1.13/lb Pb: $0.94/lb Ag: $14.50/oz), foreign currency exchange rates (N$/USD: 13.50; XOF/USD: 560; PEN/USD 3.25;

C$/USD $1.30) and normal operating conditions. Trevali’s interest is 90% of Perkoa and 90% of Rosh Pinah.

**Operating Cost per tonne milled is a non-IFRS measures. See “Non-IFRS Measures”

Global Top-10 Zinc Producer

2019 consolidated

zinc production

guidance*

Santander Mine, Peru

• Producing since 2013

• 2019 zinc production guidance

of 59-65* million payable lbs

Caribou Mine, Canada



of 71-79* million payable lbs

Perkoa Mine, Burkina Faso


• 2019 zinc production guidance of

151-168* million payable lbs

Rosh Pinah Mine, Namibia



of 80-89* million payable lbs.

361-401 million

payable lbs

Zinc

44-49 million

payable lbs

Lead

1.3-1.4 million

payable ozs

Silver

Operating Cost of US$69-

$76 per tonne**

Zinc Mines

Projects/Other Assets

5


Allocating Capital to Achieve Superior Financial Returns

6

Optimize Existing Operations

▪ Implement Best Practices & continuously improve

efficiencies

▪ New management and operating teams:

▪ Santander → Rosh Pinah – transferred

underground operational skills & practices

▪ Perkoa → Caribou – underground geotechnical

and CRF experience

▪ Rosh Pinah – transferred systems tracking

▪ Caribou – transferred mine planning protocols

▪ Focus on near-mine exploration to extend mine life:

▪ Built exploration team at Perkoa

▪ Re-evaluating Rosh Pinah from first principles

▪ Increased focus on Santander Pipe and its

higher grades

▪ Improve cash flow stability and predictability:

▪ Focus on concentrate transportation logistics

▪ Enhanced mine to mill planning and oversight

Pursue Organic Growth Opportunities

▪ Increase production and improve cost position through

strategic allocation of capital:

▪ Rosh Pinah (RP) 2.0: Evaluating a capital-efficient,

50% increase in mill throughput at Trevali’s lowest

cost and longest life operation (Tier 1 deposit)

▪ Perkoa’s HFO Project: On schedule with

anticipated annual savings of approx. US$5/t milled

▪ Drive district-scale exploration to extend mine life:

▪ Bathurst Mining Camp: Mine-to-Mill strategy

encompassing Caribou, Restigouche, Murray

Brook and Halfmile to take advantage of existing

infrastructure

▪ Regional opportunities at Perkoa and Santander

Evaluate Accretive Investment Opportunities

▪ NCIB in place for up to C$20 million (~6.5% of freely

traded shares outstanding).

▪ Investments must be accretive – maintain track

record of disciplined and patient capital allocation

Increase Production,

Cash Flow and Value

for all Trevali

Stakeholders

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.


*Effective as of December 31st, 2017

5

3

12

5

4

1

5

2

7

4

5

1

Caribou

Santander

Rosh Pinah

Perkoa

Reserve and Resource Life*

Reserve Life M&I Resource Life(1) Inferred Resource Life(1)

(1) Contained M&I and Inferred resources (exclusive of reserves) divided by mill production rates. Mineral resources

that are not mineral reserves do not have demonstrated economic viability and can therefore not be relied upon to

extend mine life.

Adding Value Through Exploration

7

Source: S&P Market Intelligence, Trevali Mining Corp.

Source: Trevali Mining Corp.

Trevali’s mines are well positioned for mine

life extensions

▪ Globally, most underground Zn & Pb mines have

short lives. 47% have lives < 6 years

▪ 10-year track record at Trevali of replacing

resource – reserves and extending LOMs

▪ +$8 million, 36,000-metre 2019 planned drill

campaign

▪ Proven exploration team – lower quartile

discovery costs (< 0.5¢/lb)

▪ All deposits remain open for expansion

▪ Rosh Pinah: 50-year history, 12 years of

reserves, plus significant exploration upside

▪ Caribou: Bathurst Life of Mill strategy, including

Restigouche and Murray Brook

▪ Santander: Long-history of production, under-

explored region, with upside at Pipe to deliver

higher-grades longer-term

▪ Perkoa: Drilling extending deposit at depth with

new VMS targets being tested

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%

5%

10%

15%

20%

25%

[0,2

]

[2,4

]

[4,6

]

[6,8

]

[8,1

0]

[10

,12

]

[12

,14

]

[14

,16

]

[16

,18

]

[18

,20

]

[20

,22

]

[22

,24

]

[24

,26

]

[26

,28

]

[28

,30

]

≥30

Cu

mu

lati

ve F

req

uen

cy (

%)

Freq

uen

cy (

%)

LOM (years)

% of Zn &Pb Mines

Cumulative Frequency

Santander Caribou / Perkoa

Rosh Pinah


Growing Production and Reducing Net Debt, Benefiting All

Shareholders

8

Bolstered Management Team to Further Optimize Stakeholder Returns


Improving Value Per Share Since 2015

▪ Utilizing our balance sheet and cash flow to add

incremental production

▪ Building liquidity, reducing net debt, positioning TV

for future smart growth

▪ Increased spending on exploration to drive

incremental production growth and mine life

extensions

▪ Returning cash to shareholders through C$20 million

NCIB, further increasing production per share

Building a High-Performance Management

Team

▪ Corporate team growth of >100% in the past year

▪ New senior finance team with new CFO and Head of

Group Finance

▪ New operating team with new COO announced

following Perkoa & Rosh Pinah acquisition. New

General Managers at 2 of the 4 mines

▪ Enhanced HSEC team

▪ In-house legal counsel, resource management, HR,

corporate development and investor relations

capabilities

0.00

0.04

0.08

0.12

0.16

0.20

0.24

0.28

0.32

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

Net

Deb

t (U

S$)

/ Sh

are

Pro

du

ctio

n (

lb)

/ Sh

are

Zn Prod'n/sh ZnEq Prod'n/sh Net Debt/sh

Reduced Net Debt / Share

Increased Prod'n /

Share

Date Position Person

September 2017 Chief Operating Officer Bryant Schwengler

June 2018 Chief Financial Officer Gerbrand van Heerden

June 2018 Head of Group Finance Daniel Schnurrenberger

June 2018 Corporate Manager HSEC Tracey Jacquemin

July 2018 VP General Consel & Corp. Secretary Steven Molnar

July 2018 VP Mineral Resource Management Yan Bourassa

September 2018 SVP Corporate Development & IR Alex Terentiew

October 2018 VP Human Resources Joanne Thomopoulos

July 2018 General Manager Santander Mine Giovanni Bloise

December 2017 General Manager Caribou Mine Hein Frey


(1) Production guidance constitutes forward-looking information. see “Cautionary Note Regarding Forward-Looking Statements”.

(2) Operating Cost per tonne milled and C1 Cash Cost per pound of zinc are non-IFRS measures. See “Non-IFRS Measures”

Achieved 2018 Guidance

9

Asset diversification to de-risk corporate production


Achieved 2018 Production Guidance (per January 15, 2018)

▪ Caribou – Adverse ground conditions impacted Q4 production and costs, costs YTD higher on use of CRF and additional development.

▪ Santander – Higher costs driven primarily from a weaker Q1 (ball mill maintenance and underground water pumping infrastructure completed).

Temporary blockade in Q3 marginally impacted production, with annual guidance achieved. Costs per tonne milled in Q2 and Q3 within guidance.

▪ Rosh Pinah – Production and costs in H1-18 below expectations due to sub-optimal operational practices while training and building new team /

operational practices. Enhanced skills training and operational support, along with improved ore delivery and higher grades drove an improved H2-

18.

▪ Perkoa – Production and costs continue to track better-than-expectations on higher mill availability and grades. Production exceed annual guidance.

▪ Since 2014 when Santander commenced commercial production, Trevali has exceeded ZnEq production guidance 3 of 4 years.

▪ 2018 production guidance, as announced on January 15, 2018 was 400 – 427 mm lbs Zn.


Strong Financial Position

10

Undrawn RCF*$ 119.6 mm

Cash$ 93.1 mm

Liquidity at Sept. 30, 2018

*net of $5.9 mm in Letters of Credit

$213 mm

As of September 30, 2018:

▪ $93 million in cash & equivalents

▪ $155 million in debt

▪ Net debt of $62 million

▪ $175 million working capital

▪ Rosh Pinah sales made October

▪ Options being evaluated to improve Perkoa

concentrate trucking and transport logistics

▪ Total liquidity of $213 million

▪ Amended and increased Credit Facility

September 18, 2018 to $275 million

▪ $149.5 million drawn as at September 30, 2018

▪ Reduces interest payments and provides

financial flexibility

▪ No principal repayments required until maturity

in September 2022

Source: Trevali Mining Corp. 3Q18 Financial Statements

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

0

50

100

150

200

250

Net

Deb

t /

LTM

EB

ITD

A (x

)

US$

mm

Net Debt LTM EBITDA Net Debt / LTM EBITDA


Cash Flow Reconciliation

11

Over the last 12 months (LTM), as of Sept

30/2018:

▪ Trevali has invested $145 million in

operations and debt repayments

▪ Repaid $56 million in debt

▪ Net debt improved by $34 million

▪ Increased ownership in Rosh Pinah, a Tier 1

zinc deposit, by 10% for $23 million

▪ Invested $10 million on exploration to

increase resources and extend mine lives

▪ Zinc prices have declined by 21%

▪ Cash position largely unchanged

Subsequent to Q3-2018 quarter end:

▪ Repaid $9.5 million in finance leases

▪ Reducing concentrate inventory at Rosh

Pinah with 25,472 DMT sold in October

▪ Initiated C$20 million NCIB, have purchased

and cancelled 12.7-million shares as of Dec

31/2018 at a total cost of $3.5 million.



Capital Structure and Market Valuation

Share Capital:(as of January 15, 2019, C$0.39/share)

Shares issued/outstanding: 818 million

Shares fully diluted: 829 million

Market Capitalization: C$319 million

Cash Position (Sept 30/18): approx. US$93 million

Debt Outstanding (Sept 30/18): approx. US$155 million

Major Shareholders:

Glencore PLC 25.8%

Blackrock 6.0%

OppenheimerFunds 2.3%

Dimensional Fund 1.8%

M&G Investment 1.7%

AGF Investments 1.2%

Total Institutional Ownership (ex-Glencore): 35-40%

TSX:TV BVL(Lima):TV US-OTCQX: TREVF

12

Benefits of the Glencore Relationship

Access to Glencore Technical Services

• Broadens technical capabilities – group

metallurgist, technology

• Peer reviews – resource/reserve modelling

• Life of mine planning

Supply chain / logistical support as required

Long-term & supportive shareholder (partner since 2010

and shareholder since 2012)

*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.

Source: Capital IQ consensus estimates

TSX:TECK.B

TSX:LUN TSX:HBM

TSX:TV

TSX:TI

NYSE:NEXA

TSX:CMMC

TSX:ASND

TSX:CS

TSX:TKO

0.2

0.3

0.4

0.5

0.6

0.7

0.8

- 1.00 2.00 3.00 4.00 5.00 6.00

P/N

AV

(x)

2019E EV/EBITDA (x)

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

P/N

AV

(x)


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

ProcessingConcentrator plant with crushing, milling,

flotation, thickening and filtration

End product Zn concentrate

Infrastructure2,000 tpd underground mining operation and

processing mill

Current mine life 5 years; remains open, drilling ongoing

Perkoa MineBurkina Faso

Perkoa Mine

Primary metal

13TSX: 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) As of Dec 31/2017


(3) Operating Cost per tonne and C1 Cash Cost per pound of zinc are non-IFRS measures. See “Non-IFRS Measures”

Perkoa Mine – Burkina Faso

Reserves and Resources (as of Dec. 31/2017)2018 Preliminary Production (100% basis)

183.9 million payable lbs Zinc

2019 Production Guidance(2) (100% basis)

151-168 million payable lbs Zinc

Operating Cost US$106-117/tonne milled.

C1 Cash Cost of US$0.84-0.92 per lb

zinc(3)

14

Highlights➢ Current mine life of approx. 5 years (1)

➢ Remains open and actively drilling

➢ HFO project on budget and schedule

➢ Exploration team established

➢ Exceeded 2018 production guidance

1.47 billion lbs contained Zn (in measured & indicated resources - as of Dec. 31/2017)


Perkoa Exploration

Perkoa Mine: Value Add

• Resource expansion drilling continued to return high-grade zinc

results up to 320m below the current modelled mining level

• Extending deposit at depth

• Deepest hole has intersected high grade mineralization

PUX016: 18.3m at 13.2% Zn, incl. 6.75 metres at 18.78% Zn-

open at depth

• Continued to test the depth and lateral extents of the Perkoa system

• Q4: Directional drilling from surface to drill multiple intersects, aiming

to increase inferred resources

Regional: Value Creation

Two New VMS systems identified:

• Geologically analogous to large Canadian VMS systems

(Matagami, Flin Flon, Noranda, etc.; approx. 40-100 million-

tonne endowments)

• 233 km2 land package

• Exploration team created

• AF1: Mineral system analysis suggests larger hydrothermal

system then Perkoa – requires drill testing

• Byrhado: Stacked gossan horizons plus stockwork zone

discovered

• Drilling in progress

Map showing areas worked in Q3 and drill targets planned during Q4Hangingwall Lens Long Section

15


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

ProcessingConcentrator plant with crushing, milling, flotation,

thickening and filtration

End product Zn concentrate and Pb-Ag concentrate

Infrastructure2,000 tpd underground mining operation and processing

mill


Rosh Pinah MineNamibia

16

Rosh Pinah Mine

AFRICA

NAMIBIA


Primary metal By-product metals


Rosh Pinah Mine - Namibia

Reserves and Resources (as of Dec. 31/2017)2018 Preliminary Production (100% basis)


8.5 million payable lbs Lead

104,000 payable ozs Silver

2019 Production Guidance(2) (100% basis)


10-11 million payable lbs Lead

145,000-161,000 payable ozs Silver

Operating Cost US$56-63/tonne milled. C1

Cash Cost of US$0.70-0.77 per lb zinc(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





17




(1) As of Dec 31/2017




Value Add - Western Orefield Resource Extension Drilling:

• An established yet under-explored major zinc district.• There has never been a sustained, modern exploration

program undertaken until now.• Ongoing underground exploration continues to extend and

define the emerging NW extension in the Western Orefield.

• Rosh Pinah deposit re-targeted from first principles - excellent

potential to discover new extensions.

• 9.1 m grading 15.6% Zn, 0.13% Pb, 3.6 g/t Ag



Rosh Pinah Exploration and Growth Opportunity

Value Recognition and Creation:

• Operationally enhanced integrated planning,

accountability, and operational tracking

• Increased rates of production drilling in 2018• 1 mo. at start of 2018 with 2 rigs, to 3 mo. ready-to-mine

stopes currently with 1 rig

• Re-interpreted geology with new targets identified,

and an improved understanding of the deposit

• Evaluating RP2.0 (50% expansion to 3,000 tpd)• Substantial exploration potential to support a larger

operation and bring forward cash flows

• Opportunities to reduce unit costs

200m

EXT –

WF3

WF3

EF1

PO

TE

NT

IAL

EX

T -

EF

1

SF1

18


Location Bathurst Mining Camp, New Brunswick, Canada

Ownership 100% Trevali

Type of deposit Volcanogenic Massive Sulphide (VMS)

Mining Underground - Modified Avoca (cut-and-fill)




Infrastructure3,000 tpd processing mill; 2,600-2,700 tpd

underground mining operation


Bathurst Mining Camp OperationsNew Brunswick, Canada

CANADA

NEW BRUNSWICK

Primary metal


Caribou Mill and Mine

By-product metals



information on the mineral reserves and mineral resources in above table.

Bathurst Mining Camp Operations - Caribou Mine

Reserves and Resources (as of Dec. 31/2017)2018 Preliminary Production

72 million payable lbs Zinc



2019 Production Guidance(2)




Operating Cost US$72-79/tonne milled. C1

Cash Cost of US$0.95-1.02 per lb zinc(3)

20

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



➢ Advancing life of mill strategy


(1) As of Dec 31/2017



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


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 &

Indicated7,800,000 6.94 2.35 0.18 36 0.3

Inferred 6,500,000 5.62 1.51 0.15 23 0.1

Bathurst Mining Camp, New BrunswickSix 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



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 &

Indicated5,284,000 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)

*Conceptual plan 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.

-

ZnEq

Pro

du

ctio

n

Conceptual Bathurst Mining Camp Life of Mill Strategy

Halfmile / StratmatCaribou

Murray Brook

Restigouche


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)




Infrastructure2,000 tpd underground mining operation and processing

mill


Santander MinePeru


Primary metal By-product metals


Santander Mine - Peru

2018 Preliminary Production




2019 Production Guidance(2)




Operating Cost US$45-49/tonne milled. C1 Cash

Cost of US$0.71-0.78 per lb zinc(3)

Reserves and Resources (as of Dec. 31/2017)





23


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




Magistral North, Central, South Orebodies:

Santander Pipe Deposit:Highlights➢ Current mine life of approx. 3 years


➢ Mining & milling rates above design

314 million lbs contained Zn (in measured & indicated resources - as of Dec. 31/2017)

(1) As of Dec 31/2017




Santander Exploration

Value Add:

• Magistral – 18,000m 2018 exploration drilling continues to test the

deposit extensions approximately 350m below current

development.

• Pipe – continuing to extend the high-grade Zn-Cu targets at depth.

o 1.5 km from Magistral, ~300m from the mill, mined 1957-1991

o Multiple high grade lenses intersected

o Min 5,000 m resource delineation drilling to test high grade

mineralization and associated geophysical anomalies

Value Recognition and Creation:

• An established, yet under-explored major mining district

• 8 distinct hydrothermal centers defined multiple targets

with potential for polymetallic replacement and vein type

mineralization

• 45 km2 Santander exploration block remains under-

explored and recent geophysical and geochemical

surveys have defined several high priority targets

Magistral Sur

Magistral Section looking West HG Pipe Section looking North

24


Management

Dr. Mark CruisePRESIDENT & 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 SchwenglerCHIEF 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

operations. He became GM at the Caribou Mine

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 operations, engineering and

maintenance.

Steve MolnarVP 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 HeerdenCHIEF 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

2013. He is a Chartered Accountant from the

Institute of Chartered Accountants of South

Africa and a Chartered Professional

Accountant in British Columbia (CPABC)

Alex TerentiewSVP 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

on long-term growth potential, value margins

and commodity research.

Steve StakiwVP 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 MarinovVP 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 BourassaVP MINERAL RESOURCE MANAGEMENT

Geologist with 20 years of experience in the

resource industry in Africa and the Americas,

whose experience ranges from exploration to

operations & resource estimation.

Dr. Mark Cruise, PRESIDENT & CEO

Mike Hoffman, CHAIRMAN

Over 35 years global mine development experience including

Vice President at Yamana Gold, Desert Sun and Goldcorp, and

is on the Boards of Eastmain Resources and Havilah Mining.

Chris EskdaleGlobal Head Industrial Zinc for Glencore Plc.

Dan MyersonManages Glencore's Canadian zinc business.

Anton DrescherCertified Management Accountant with extensive public

company board and officer experience

Russell BallPast Executive VP, CFO and Corporate Development of

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 McDonaldChair 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 IsserowPast 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.

Directors

25


Zinc: Demand and Supply – Continued Strong Fundamentals

Forecast 1-2% per year through 2022

Global Zinc Demand Increase

US-China trade war, concerns on global growth rates and

rising interest rates weighing on demand expectations. Yet demand growth remains positive.

Zinc Supply Remains Constrained• Supply growth expectations being trimmed. Deficit persisting.

• Visible inventories at a 10-year low

• Strict enforcement of environmental regulations in China have

limited mine and refined supply growth for two years

• Zn prices reflecting an assumption that Chinese refined output

will grow rapidly (15-20%) in 2019. Given Chinese refined

supply ↓ 3.1% YTD, a tighter market and higher prices could

materialize.

Approx. 280,000 tonnes/year

Strong zinc pricesDisconnect between current pricing

environment & supply

Forecast of continued strong zinc

prices in reaction to ongoing near-

term refined metal supply deficits

US$1.33/lbUS$2,923/tonne2018

US$1.47/lbUS$3,250/tonne2019

US$1.28/lbUS$2,820/tonneLONG-TERM

Wood Mackenzie zinc price forecasts:

26

Source: Wood Mackenzie research

US$1.60/lbUS$3,525/tonne2020

Source: Bloomberg

$-

$0.50

$1.00

$1.50

$2.00

$2.50

0 500,000 1,000,000 1,500,000 2,000,000

Zin

c P

rice

(U

S$/l

b)

Zinc Inventory Levels (tonnes)

2004 2005 2006 2007

2008 2009 2010 2011

2012 2013 2014 2015

2016 2017 2018 Current Data Point

Current DataPoint


Zinc: Low Stocks, Strong Backwardation, a Tight Market

Highest Backwardation in 12 years

• Cash – 3 month backwardation at plus-decade high levels

• Buyers of Zn today are facing tight conditions.

• Historically, at current inventory levels, zinc prices

normally >$3,000/t. Currently approx. $2,500/t.• Zinc price is under valued in the current market.

Zinc Market Participation Rates Low

• Open interest on LME and SHFE at a 4-year low. Investors

sitting on the sidelines.

• Macro uncertainty

• Unclear price direction

• Rising concentrate supply, but refined supply failing to

grow as expected.

Consensus is Cautious• Consensus forecasting a more

conservative outlook for Zn prices

• Analysts acknowledging,

however, that Zn is undervalued,

and price risk is to the upside

US$1.34/lbUS$2,954/tonne2018

US$1.25/lbUS$2,756/tonne2019

US$1.14/lbUS$2,513/tonneLONG-TERM

Consensus zinc price forecasts:

27

Source: Wood Mackenzie research

US$1.20/lbUS$2,646/tonne2020

7,400,000

8,600,000

9,800,000

11,000,000

12,200,000

13,400,000

$1,400

$1,800

$2,200

$2,600

$3,000

$3,400

2013-11-18 2014-11-18 2015-11-18 2016-11-18 2017-11-18 2018-11-18

Zinc Participation; at cyclical lows

Zinc, $/mt (LHS)

LME + SHFE Aggregate OI, mt (RHS)

Source: LME, Scotiabank GBM and Scotiabank Commodity Derivatives, Bloomberg


Zinc: Growing Market/New Uses (Agriculture, Batteries, Renewable Power)

14 million tonnesof zinc is produced and

consumed annually. Demand

is forecast to increase by 1-2% per year through 2022.

APPROX 40%Utilized in die-casting,

production of brass and bronze,

and into oxides and chemicals.

Galvanizing59%

Brass/Bronze11%

Zinc diecast alloys13%

Zinc chemicals9%

Zinc Semis5%

APPROX 60%Utilized for its corrosion

resistance (galvanized

steel, rebar, autos, structural steel)

Other2%

Initiatives propelling

new potential uses

of zinc include:

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.

28TSX: TV | www.trevali.comSource: International Zinc Association; Zinc.org


Appendix – Provisional Pricing

29

The decline in zinc prices in 2018, along with sales volume volatility, significantly impacted final concentrate sale

settlement prices

▪ Provisional pricing reflects two components:

1) Final settlement of sales (sales that have closed and are no longer open to adjustment)

2) Mark-to-market of open contracts that have not yet settled

▪ Provisional pricing sensitivity will vary quarter to quarter and depends on numerous factors, including:

▪ Quantity of metal provisionally priced (96.3 mm lbs Zn at $1.10/lb and 5.1 mm lbs Pb at $0.93/lb, as of Sept. 30, 2018)

▪ Final timing of settlements for each of the four mines

▪ Settlement periods generally range from one to six months after shipment

▪ Actual zinc price movements throughout the quarter

▪ Settlement price is at average LME for the month of settlement

▪ 3-month forward average zinc price for the last month in the quarter (mark-to-market pricing adjustment)

▪ Quantity of other Zn sales made during the quarter, which impacts the mark-to-market quantity



Cautionary Note Regarding Mineral Reserves and Mineral Resources:

30

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.

http://www.sedar.com/


Cautionary Note to U.S. Investors:

31

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

or any part of an inferred mineral resource exists, that it can be economically or legally mined, or that it will ever be upgraded to a

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.


Trevali Mining CorporationSuite 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 StakiwVice President, Investor Relations and

Corporate Communications

[email protected]

Direct phone:1-604-638-5623

investor santander caribou presentation€¦ · global top-10 zinc producer 2019 consolidated zinc...

Documents