Vancouver-based Trevali Mining Corporation released its third quarter financial results on Monday, and its Caribou zinc mine near Bathurst, New Brunswick figured prominently.
As the company announced a record third quarter EBITDA (earnings before interest, taxes, depreciation and amortization) of $14.8 million and a profit of $2.4 million, the fact the mine started commercial production in the third quarter received top billing.
This is a big deal for Trevali and for the Bathurst region, but in a press release announcing the third quarter financial results, company CEO Mark Cruise said the milestone was not without its struggles.
“We are particularly proud of our Caribou team. In summary, Caribou has overcome both technical and exceedingly challenging financial hurdles during the first half of 2016 to successfully commission the operation. This includes posting positive Q3 operational results despite the mine not yet being fully ramped. This is an encouraging indicator of the upside at Caribou as we continue to ramp toward the full nameplate 3,000-tpd operating rate. Caribou has been steadily increasing performance and throughput in Q4 in tandem with strengthening zinc and lead commodity prices.”
Trevali has one other producing mine – the Santander zinc mine in Peru – but it’s focused a lot of attention on the Caribou mine in the past two years as it worked on getting it into commercial production.
The company declared commercial production at the mine, located 50 kilometres west of Bathurst, on Canada Day – July 1, 2016.
During the third quarter the mine generated US$19.519 million in revenue. The average “head” grades (the mass of metal or mineral in the ore) were 5.91 per cent for zinc, 2.6 per cent for lead and 65-70 grams per ton for silver. Trevali said the the cash costs per tonne milled for the zinc during the third quarter was US$58.88.
Trevali says Caribou remains on track to produce 37-41 million pounds of payable zinc, 14-15 million pounds of payable lead and 380,000-420,000 ounces of payable silver by the end of 2016.
It’s also hopeful it will be able to bring down operating costs – a key goal for any junior miner during these lean financial times when finding investment capital is difficult. Trevali says it expects operating costs to modestly decrease as it renegotiates major mining and supplies contracts and as mining operations become more efficient.
It hasn’t been a great 12 months for the New Brunswick mining sector. PotashCorp. closed the Picadilly potash mine near Sussex in January of 2016, putting over 400 people out of work. Meanwhile, Northcliff Resources Ltd.’s plan to build a tungsten-molybdenum mine in New Brunswick is in regulatory limbo.
The fact that Trevali’s Caribou mine has had a strong start is a shot in the arm for the industry that can really use one.