Operations

RP2.0 Expansion

Trevali had positive results from the independent Rosh Pinah Expansion “RP2.0” NI 43-101 Feasibility Study (“FS”) at its 90%-owned Rosh Pinah mine in Namibia. The Feasibility Study is based on a scenario to expand the current throughput from 0.7 Mtpa to 1.3 Mtpa through the modification of the processing plant, construction of a paste fill plant, and development of a dedicated portal and ramp to the WF3 deposit. All figures are stated in United States dollars on a 100% ownership basis unless otherwise stated.

Representation of Rosh Pinah Expansion “RP2.0”

Representation of Rosh Pinah Expansion “RP2.0”

Highlights of the Expansion Feasibility Study include:

  • Planned 86% increase in mill throughput from 0.7 Mtpa to 1.3 Mtpa.
  • Assuming a positive investment decision:
    • Detailed engineering and procurement of long-lead items expected to commence in Q4 2021, with construction expected to commence mid-year 2022; and
    • Commercial production expected around mid-year 2024.
  • Incorporates previously announced 15-year solar power purchase agreement with EMESCO for the supply of solar power of approximately 30% of the required power.
  • Addition of a water treatment plant in conjunction with the paste fill plant anticipated to reduce water intensity of the operation from 1.54 m3/t to 0.65 m3/t of ore processed.
  • Production and Operating Costs (post-Commercial Production):
    • Average annual zinc payable production: 135 Mlbs.
    • Average AISC1: $0.67/lb .
    • Average annual lead and silver payable production: 23.7 Mlbs and 303 Koz, respectively .
  • Proven and Probable Mineral Reserves
    • 12.35 Mt containing 1,744 Mlbs of zinc, 370 Mlbs of lead, and 7,858 Koz's of silver (see Table 5 below).
  • Project CAPEX of $111 million:
    • Modifications to the existing process plant to include a single stage SAG mill, crushing and ore blending area, increased zinc and lead flotation circuit capacity;
    • Addition of a paste fill plant and reticulation system including a water treatment plant;
    • Dedicated portal and decline to the WF3 deposit with new material handling system; and
    • Mine surface and underground infrastructure.
  • Project economics (after-tax) using $1.17/lb zinc, $0.96/lb lead and $24.47/oz silver price assumptions:
    • NPV8%: $156M.
    • Free cash flow: $290M.
    • IRR: 58%.
    • Payback period: 4.6 years.

Rosh Pinah Expansion “RP2.0” Feasibility Study

Processing Plant: The FS incorporates a planned upgrade to the comminution circuit to include a new, single-stage SAG mill and pebble crusher. The expansion also includes primary crushing upgrades and an ore blending area, along with other circuit modifications intended to provide increased flotation, thickening, filtration and pumping capacity to achieve the target throughput of 1.3 Mtpa. The upgrade will also include several flowsheet modifications aimed at improving both the concentrate grade and metal recoveries.

Underground Development and Infrastructure: A dedicated portal and decline to the WF3 deposit will be constructed to support the increase in mine production levels and to reduce operating costs. The planned trucking decline is 3.9 km in length, excluding level access and stockpiles. The trucking decline will act as an additional fresh air intake within the ventilation network and will enable direct ore haulage from the WF3 zone to a new surface primary crusher station utilizing large-scale (60 tonne) trucks. Ore sourced from other areas (EOF, SF3, SOF, and BME) will be transported to the existing underground crushing system using the existing 30 tonne truck fleet and conveyed to surface via the existing conveying system.

Paste Fill Plant: A paste fill plant designed to operate at both the current 0.7 Mtpa and the 1.3 Mtpa targeted throughput rate has been included. Paste filling the stopes rather than leaving them void is expected to improve ground stability, increase ore recovery, and reduce dilution, and also to reduce surface tailings as a portion of new tailings will be redirected underground to be used as paste fill. A water treatment plant has been added to the paste fill plant system which is expected to significantly reduce water consumption. The system in conjunction with the paste fill plant system is anticipated to reduce the water intensity of the Rosh Pinah operation from 1.54 m3/t to 0.65 m3/t of ore.

Mobile Equipment: The existing, small-scale underground trucks and load-haul dump (LHD) fleet will continue to be used primarily in the current mining areas. As mining extends deeper and average haulage distances increase in WF3, new large-scale trucks and LHDs are planned to be purchased for the more efficient transportation of material to surface which is expected to reduce costs over the life-of-mine.

Renewable Solar Energy Power Purchase Agreement: Trevali has entered into a fifteen-year Power Purchase Agreement (the "PPA") with Emerging Markets Energy Services Company ("EMESCO"). The PPA with EMESCO is anticipated to deliver 30% of Rosh Pinah's power requirements during the life of the agreement. EMESCO will be responsible for the design, permitting, financing and implementation of a solar energy system on a neighbouring property at no cost to Trevali. EMESCO will sell the power generated to Trevali at a fixed rate that is expected to reduce energy costs by 8% over the fifteen-year term of the agreement.

Onsite Operating Costs: Once the project is commissioned, onsite operating costs are expected to reduce by approximately 26% on a per tonne milled basis. Mining costs per tonne milled are expected to be reduced due to the planned change in the mining method to include paste fill allowing for increased ore recovery and reduced mining dilution. Mining costs are also expected to benefit from the dedicated underground decline to the WF3 deposit which should allow for more efficient material handling and reduced cycle times. The processing unit costs are expected to decrease as a result of treating increased tonnages following the upgrade. Fixed on site costs on a per tonne milled basis are also expected to decrease as the mine ramps up from 0.7 Mtpa to the FS target of 1.3 Mtpa as a function of higher annual throughput.

Figure 1: Rosh Pinah Expansion “RP2.0” Annual Ore Production Schedule1 with Metal Grades

Figure 1: Rosh Pinah Expansion “RP2.0” Annual Ore Production Schedule<sup>1</sup> with Metal Grades

Figure 2: Rosh Pinah Expansion “RP2.0” Annual Payable Metal Production Schedule2 and AISC1

Figure 2: Rosh Pinah Expansion “RP2.0” Annual Payable Metal Production Schedule<sup>2</sup> and AISC<sup>1</sup>

Table 1: Life of Mine and RP2.0 FS Expansion Economics

PROJECT METRICS

UNIT

LOM (2021 – 2032)

POST EXPANSION (2024 - 2032)

Mine life

Years

12

9

Total ore production

Kt

12,3512

10,432

Zinc grade (average)

%

6.5

6.6

Lead grade (average)

%

1.4

1.4

Silver grade (average)

g/t

19.8

19.3

Payable Zinc metal

T

592,542

517,127

Payable Lead metal

T

108,138

92,612

Payable Silver metal

Oz

3,079,951

2,681,453

Capital costs – project

US$M

111

-

Capital costs – sustaining

US$M

120

66

Capital costs – closure

US$M

6

6

C1 cash costs1

US$/lb

0.63

0.60

All-In-Sustaining-Cost “AISC”1

US$/lb

0.72

0.67

Post-tax free cashflow

US$M

290

373

Post-tax NPV (8%)

US$M

156

-

Post-tax IRR

%

58

-

Payback Period After-tax

Years

4.6

-

Table 2: Expansion Capital Cost Summary in US$M

Item Description

TOTAL

Processing

 

Processing plant upgrade

50.2

Mine Infrastructure – Surface

 

Boxcut / Portal (WF3)

0.7

Paste and Backfill Plant (incl. RO WTP)

18.6

Replacement of NamPower OHL

2.2

Upgrading of 66kV Yard @ RP Mine

2.4

Office, Control Room & Network Upgrades

1.7

Other

0.2

Mine Infrastructure – Underground

 

Paste Fill Reticulation

4.0

Electrical

1.3

Dewatering

0.6

Ventilation

2.2

Other

1.2

Sub-Total

85.4

EPCM Contractor

14.2

Owners Team

2.6

Contingency

8.8

Total

111.0

 

Table 3: Zinc Price Sensitivity Estimates

FINANCIAL METRIC

UNIT

$0.90/LB

$1.00/LB

$1.10/LB

$1.17/LB

$1.20/LB

$1.30/LB

$1.40/LB

Post-tax free cashflow

US$M

83

161

238

290

316

393

471

Post-tax NPV (8%)

US$M

13

67

118

156

169

220

270

Mineral Reserve and Mineral Resource Estimates

Rosh Pinah Mineral Reserves as at March 31, 2021(1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13)

Classification

Tonnes

Grade

Contained Metal

 

(Mt)

Zn (%)

Pb (%)

Ag (g/t)

Zn (M lbs)

Pb (M lbs)

Ag (k oz)

Proven

6.14

6.26

1.5

18.8

847

203

3,713

Probable

6.21

6.55

1.22

20.8

897

167

4,145

Total

12.35

6.41

1.36

19.8

1,744

370

7,858

Notes

  1. CIM Definition Standards for Mineral Resources and Mineral Reserves (2014) were used for reporting of Mineral Reserves.
  2. Mineral Reserves were estimated at a full breakeven NSR cut-off value of US$50 per tonne.
  3. NSR values were calculated based on average metal prices of US$1.17/lb Zn, US$0.96/lb Pb, and US$24.47/oz Ag.
  4. The average processing recoveries used were 88.8% for zinc, 68.5% for lead, and 45.0% for silver.
  5. Average payable values used were 85% for zinc, 95% for lead, and 95% for silver.
  6. Dilution (Inferred and unclassified material set to zero grade) assumed as a minimum of 1.0 m on each hangingwall and 0.5 m on each footwall.
  7. Mining recovery factors assumed as a minimum of 60%, ranging to 95%, with a weighted average of 93%.
  8. Mineral Reserves are reported based on mined ore delivered to the plant as mill feed.
  9. The average exchange rate used was N$14.90 = US$1.00.
  10. Effective date of Mineral Reserves is March 31, 2021.
  11. The Qualified Person for the Mineral Reserve estimate is Mr Andrew Hall, MAusIMM (CP), of AMC.
  12. Totals may not compute exactly due to rounding.
  13. Mineral Reserves are stated on a 100% ownership basis.

Rosh Pinah Mineral Resource as at March 31, 2021(1, 2, 3, 4, 5, 6, 7, 8)

Classification

Tonnes

Grade

Contained Metal

 

(Mt)

Zn (%)

Pb (%)

Ag (g/t)

ZnEq (%)

Zn (M lbs)

Pb (M lbs)

Ag (k oz)

Measured

10.54

7.41

2.04

27.4

10.22

1,722

474

8,983

Indicated

7.92

7.48

1.46

23.8

9.60

1,306

255

5,863

M&I

18.46

7.44

1.79

25.8

9.96

3,028

729

14,845

Inferred

1.58

8.31

2.19

54.9

12.04

289

76

2,698

Notes:

  1. CIM Definition Standards for Mineral Resources and Mineral Reserves (2014) were used for reporting of Mineral Resources.
  2. The Mineral Resources are stated inclusive of Mineral Reserves.
  3. Mineral Resources are reported at a 4% ZnEq cut-off grade which approximates a Net Smelter Return value of US$40/t.
  4. Zinc equivalency was estimated as ZnEq = Zn (%) + Pb (%) + [Ag (g/t) * 0.028)].
  5. Effective date of Mineral Resources is March 31, 2021.
  6. The Qualified Person for the Mineral Resource estimate is Mr Rodney Webster, MAIG, of AMC.
  7. Totals may not compute exactly due to rounding.
  8. Mineral Resources are stated on a 100% ownership basis.

Additional Resources

Technical Report<br />Rosh Pinah Expansion “RP2.0” NI 43-101 Feasibility Study<br />Trevali Mining Corporation
Technical Report
Rosh Pinah Expansion “RP2.0” NI 43-101 Feasibility Study
Trevali Mining Corporation
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