VANCOUVER — Trevali Mining (TV-T) has added significantly to the resource base at its Santander mine in Peru as it advances the project towards production.
The resource update, the first since November 2010, increases inferred resources by 188% and indicated resources by a more modest 7% based on roughly 10,000 metres of additional drilling.
Using a 3% zinc equivalent cut-off, the overall indicated resource now stands at 6.3 million tonnes grading 43 grams silver per tonne, 1.3% lead, 3.62% zinc and 0.07% copper for 8.7 million oz. silver, 180 million lbs. lead, 500 million lbs. zinc, and 10.2 million lbs. copper. The inferred resource, using the same cut-off, stands at 13.8 million tonnes grading 21 grams silver, 0.4% lead, 4.62% zinc, and 0.11% copper for 9.4 million oz. silver, 121 million lbs. lead, 1.41 billion lbs. zinc, and 34.9 million lbs. copper.
The additional inferred resources, representing 162% more zinc, 162% lead, 194% silver, came largely from exploring beneath the Magistral Central and South deposits as well as from within the formerly-producing Santander Pipe deposit. The Magistral North and Puajanca South deposits remained unchanged from 2010.
Company CEO Mark Cruise stated that the exploration potential on the company’s holdings in the Central Peruvian Mineral Belt is good-to-excellent and low-to-moderate risk, with the company having identified 17 km of permissive mineral fairway and only drill tested 800-900 metres of it. Cruise also stated that the increase in mineralization provides an excellent foundation for the company to potentially double production in the short-to-medium term once the initial 2,000-tonne-per-day mine is up and running.
Trevali expects to commission initial production at Santander later this year, mining the three Magistral deposits by open-pit for 18 to 24 months before transitioning to underground stope mining.
Back in Canada the company continues to ramp up production to 2,000 tonnes per day at its Halfmile polymetallic mine in New Brunswick’s Bathurst mining camp. In early June the company reported recovery results from the first 30,000 tonnes of ore shipped to Xstrata’s nearby Brunswick-12 processing plant, with zinc, the principle product, coming in at an 86.16% recovery.
To help advance Halfmine Trevali has secured a US$5-million receivables working capital line of credit with Auramet Trading. At the end of May the company had about $15 million in cash.
The company will also be increasing its position in the Bathurst camp thanks to a deal signed in mid-May to acquire the Caribou milling and mine complex, sitting only about 20 km from its Halfmile operation. Trevali has made a deal to acquire privately-owned Maple Minerals, which controls the complex, for 20 million Trevali shares and 4 million share purchase warrants. Based on Trevali’s May 11 share price the deal is worth about $24 million.
The Caribou complex includes a 3,000-tonne-per-day concentrate processing plant, the past-producing mine, and a $4.67-million environmental closure bond already in place.
The Caribou mine hosts 3.8 million measured and indicated tonnes grading 7.5% zinc, 3.26% lead, and 92 grams silver, plus 3.9 million inferred tonnes grading 7.36% zinc, 3.59% lead, and 107 grams silver, all based on a 9% combined zinc and lead cut-off grade.
Stratmat, the company’s other project in the Bathurst camp, hosts 5.5 million inferred tonnes grading 6.11% zinc, 0.4% copper, 2.59% lead, and 54.21 grams silver based on a 5% zinc equivalent cut-off.
Trevali’s share price closed unchanged on the resource update at 97¢ with 2.5 million shares traded. The company has 161 million shares outstanding.
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