Trevali Mining Corporation (TSX:TV) announced positive Q3 financial results. The Santander mine did as good as expected and the Caribou mine was profitable, although it hasn’t reached its full capacity. Trevali produced 32.4 million lb zinc, 9.7 million lb lead and 362,776 toz silver, which equals to 47.33 million lb of zinc equivalent. The total cash costs were $0.4/lb of zinc equivalent ($0.33/lb at Santander and $0.46/lb at Caribou). The cash costs were lower than expected, moreover they should decline further, as the Caribou mine throughput rate should grow steadily. The plant processed 2,200 tonnes of ore per day in Q3, but according to the earnings call, the throughput is at the 2,900-3,000 tonnes per day level right now, which is approximately the projected full capacity. The management expects that the cash costs should decline by 5-10%, or to $0.36-0.38/lb of zinc equivalent.


  • Trevali’s financial results improved in Q3 and this trend should continue also in Q4.
  • The Caribou mine operates almost at full capacity now.
  • The Halfmile-Stratmat PEA is expected in early 2017.
  • An expansion of the Santander mine is almost warranted.
  • A significant zinc market deficit is expected for the foreseeable future.

Trevali is up by 129% year-to-date and given the improved zinc and lead prices and a higher production from Caribou, it should keep on growing. Using the approximate average metals prices for the first half of Q4 ($1.1/lb zinc, $0.94/lb lead and $17.5/toz silver) and assuming that the Caribou production will be 25% higher, while Santander production will remain unchanged, it is able to expect that Trevali should produce approximately 52.28 million lb of zinc equivalent in Q4. At cash cost of $0.38/lb of zinc equivalent, the net income should climb at least to $7.5 million, which equals to EPS of almost $0.02.

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