News Release

Trevali Announces Positive Mine Development Decision for Santander Silver-Lead-Zinc Project in Peru

August 25, 2009

Strategic partnership with Glencore to fast-track production

Glencore providing US$2 million financing to Trevali


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Vancouver, British Columbia...Trevali Resources Corp. ("Trevali" or the "Company") (CNSX: TV, Frankfurt: 4TI, Pink Sheets: TREVF) is pleased to announce a positive production decision from an internal mine development study on the Santander Silver-Lead-Zinc mine project in west-central Peru conducted in partnership with Glencore International AG ("Glencore") of Switzerland.

"The positive results from our joint study with Glencore confirms that our Santander project will be one of just a few new base metal producers to be coming on-stream in the current metals cycle -- with planned concentrate sales providing Glencore a long-term, secure supply of zinc and lead," stated Trevali president and CEO Dr. Mark Cruise. "Achieving the production milestone and our strategic partnership with Glencore will give Trevali a strong platform to build upon our successes to date as well as the potential to open up additional opportunities."

Development plans include:

  • Commencement of production from reprocessing of existing tailings prior to transitioning to hard rock mining.
  • Open-pit development of the Magistral North and South deposits (Figure 1) providing initial hard rock production.
  • Subsequent underground extraction utilizing sub-level stoping methods.
  • Continued exploration to expand the current Magistral deposits and discover additional resources going forward.

The joint Trevali-Glencore mine development study is internal only and does not qualify as an independent National Instrument 43-101 report. However, based on the positive results of this study and Glencore's global experience on this deposit type -- it plans to immediately commence site preparation for the mineral processing circuit at Santander and mobilization of the 2,000 tonne-per-day mill and concentrating circuit it is contributing to the mine development project.

Click to Enlarge

Figure 1. Mine plan for the Magistral South, Central and North deposits from the joint Trevali-Glencore internal mine development study indicating planned open pits on the South and North deposits, and underground development modeling.

This joint mine development study with Glencore follows a Memorandum of Understanding entered into on May 15, 2009 (see NR-09-09) regarding the proposed development of and metal concentrate sales from the Company's Santander project. Key highlights of the planned joint business venture, structured to minimize dilution to Trevali and its shareholders, are as follows:

  • Glencore will provide and operate a 2,000-tonne-per-day (tpd) concentrate plant, thereby allowing production at Santander at significantly higher levels than the 1,250 tpd production initially envisaged.
  • Trevali can acquire the plant and associated infrastructure contributed by Glencore over time on a 'toll' basis, thereby acquiring 100% ownership in the new mill and processing complex over the coming years.
  • Trevali will maintain its full control and ownership of the Santander project.
  • Glencore will provide its operational expertise on a 'contractor / toll basis' from mining through to concentrate production.
  • Glencore will provide to Trevali US$2 million, in the form of a convertible financing, to cover exploration, resource definition, development and operational requirements. An advance of US$500,000 can be drawn by Trevali upon the recent execution of a Head of Terms agreement with the balance available on upon execution of the Final Agreements. Terms of the financing include: interest at Libor 3-month +2.5%, payable quarterly in arrears; repayment in equal installments over 3 years commencing the later of 6 months from the date of first commercial production from the Santander project, or 20 months from the date of drawdown; Glencore will have the option to convert to Trevali shares any time after second anniversary of drawdown based on trailing 30 day VWAP at conversion date, subject to a minimum floor conversion price of $0.45 per share, subject to Exchange approval; with security for the financing being the Santander tailings resource.
  • Trevali has secured a long-term concentrate off-take sales agreement whereby Glencore will buy 100% of the Santander project area life-of-mine production at benchmark terms.

Project Background

The Santander silver-lead-zinc mine project is located approximately 215 km by road from Lima, in the western extent of Peru's prolific Cerro de Pasco mineral district. The mine operated from 1958-1993 targeting a single Carbonate Replacement Deposit--type pipe and manto structure, the Santander Orebody.

Substantial site infrastructure at the formerly producing operation includes a fully refurbished 200-man camp and associated support facilities, an ore processing / concentrator plant (including various crushers, mills, flotation cells and filters able to produce zinc, lead-silver and copper concentrates) undergoing refurbishment, and the Tingo hydroelectric power-station located 17 km down-valley to the west. The Santander project and the considerable existing infrastructure form a highly strategic asset in this mining district. The Company commenced exploration at Santander in November 2007 discovering four new high-grade silver-lead-zinc replacement and massive sulphide bodies to date.

A recently completed independent NI 43-101 resource estimate of the three Magistral deposits by Golder Associates Engineers (see NR-09-06) reviews a total Indicated Mineral Resource of 5,298,000 tonnes with an average grade of 3.34% zinc, 1.27% lead and 38 g/t silver (using a 2% ZnEQ* cut-off grade) -- for a contained metal inventory of 390 million lbs. zinc, 149 million lbs. lead and 6.5 million oz. silver in the Indicated category. An additional Inferred Mineral Resource of 2,244,000 tonnes grading 2.92% zinc, 0.50% lead and 18 g/t silver was also reviewed in the three deposits using the same cut-off grade -- for contained metals of 144 million lbs. zinc, 25 million lbs. lead and 1.3 million oz. silver. All three Magistral bodies remain open at depth and to the East.

Additionally, a further 100 million contained lbs. of zinc are estimated to be present in the 1,656,000 indicated tonnes grading at 2.74% zinc (using a 2.0% zinc cut-off grade) within the Santander Tailings Impoundment.

*ZnEQ = ((Ag Price(g) x Ag Recovery x Ag Grade) + (Pb Price(t) x Pb Recovery x (Pb Grade(%)/100)+(Zn Price(t) x Zn Recovery x (Zn Grade(%)/100)))/Zn Price(t). Golder Associates utilized the three year rolling average price for all three metals. Price for silver is per gram ($0.43339) and that for Pb ($1,983) and Zn ($2,742) is per tonne. A recovery of 85% was applied to Ag, 94% for Pb and 91% for Zn based upon Trevali's metallurgical testwork. A 2% ZnEQ* cut-off grade is the nominal base case estimated grade of material that can be mined and processed considering all applicable costs.

Qualified Person and Quality Control/Quality Assurance

EurGeol Dr. Mark D. Cruise, Trevali's President and CEO and a qualified person as defined by National Instrument 43-101, has supervised the preparation of the scientific and technical information that forms the basis for this news release. Dr. Cruise is not independent of the Company, as he is an officer and shareholder.

The work programs at Santander were designed by, and are supervised by, Dr. Mark D. Cruise, President & CEO, Trevali, and Tim Kingsley (independent geological consultant), who together are responsible for all aspects of the work, including the quality control/quality assurance program. On-site personnel at the project rigorously collect and track samples which are then security sealed and shipped to ACME Laboratories, Vancouver, for assay. ACME's quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025: 1999. Analytical accuracy and precision are monitored by the analysis of reagent blanks, reference material and replicate samples. Quality control is further assured by the use of international and in-house standards. Blind certified reference material is inserted at regular intervals into the sample sequence by Trevali personnel in order to independently assess analytical accuracy. Finally, representative blind duplicate samples are routinely forwarded to ACME and an ISO-compliant third party laboratory for additional quality control.

The resource estimates on the Magistral North, Central and South deposits were conducted by and under the supervision of Kevin Palmer P.Geo., an independent qualified person employed by Golder Associates Ltd. of Vancouver, Canada.

About Trevali Resources Corp.

The Company in conjunction with partner Glencore International A.G. has successfully completed a positive internal mine development study examining initiating mining operations on the newly discovered Magistral deposits at the Santander polymetallic project in west-central Peru.

Trevali and Glencore have entered into a definitive development agreement for the Santander project that will see Glencore provide and operate a 2,000-tonne-per-day concentrate plant, undertake mining operations on a 'contractor/toll basis' and enter into a long-term concentrate offtake agreement for 100% of Santander project production at benchmark terms.

Additionally, through its wholly owned subsidiary Trevali Renewable Energy Inc., the Company is undertaking a significant upgrade of the Tingo run-of-river hydroelectric generating facility along with transmission line upgrades and extensions to allow the potential sale of surplus power into the Peruvian National Energy Grid.

The common shares of the Company are currently listed on the CNSX (symbol TV). For further details on the Company, readers are referred to the Company's web site ( and to Canadian regulatory filings on SEDAR at

About Glencore

Glencore International AG is one of the world's largest suppliers of a wide range of commodities and raw materials to industrial consumers. Headquartered in Baar, Switzerland, Glencore directly or indirectly employs over 2,000 people worldwide in some 50 offices in over 40 countries at its marketing operations. In its industrial operations, Glencore directly or indirectly employs over 50,000 people in 16 plants in 12 countries.

On a consolidated basis, Glencore's turnover for the 2008 fiscal year was US$152.2 billion, Total Assets were US$61.3 billion and Total Glencore Shareholders' Funds were US$15.4 billion at December 31, 2008.

On Behalf of the Board of Directors of

"Mark D. Cruise" (signed)
Mark D. Cruise, President

Contact Information:
Steve Stakiw, Manager -- Corporate Communications

Phone: (604) 488-1661 / Fax: (604) 408-7499

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adequacy or accuracy of this release.