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Trevali revenues rise 187%, Q1 earnings miss on Perkoa freight timing

The Santander mine, Peru

The Santander mine, Peru

Photo by Trevali Mining

11th May 2018

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

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VANCOUVER (miningweekly.com) – Pureplay zinc producer Trevali Mining has reported adjusted earnings a share of $0.04, missing average analyst earnings forecasts by a penny, on lower-than-expected sales from the Perkoa mine, in Burkina Faso, mainly owing to freight timing at the Port of Abidjan, in Côte d’Ivoire.

Vancouver-based Trevali advised after market close on Thursday that during the three months ended March 31, the company recorded after tax net income of $28.58-million, or $0.03 a share, compared with net income of $2.69-million, or $0.01 a share, for the comparable period a year earlier.

The higher net income is mainly attributable to increased sales from the Rosh Pinah mine, in Namibia, and at Perkoa year-on-year.

During the quarter, Trevali sold 89.5-million payable pounds of zinc and produced 98.7-million payable pounds of zinc, compared with the first quarter of 2017, when the company sold and produced 33.6-million and 31.9-million pounds of payable zinc, respectively.

"First-quarter production was in line with the annual guidance range and demonstrated the robust cash flow generation capacity of our mines. As previously stated, first-quarter production was planned to be lower than subsequent quarters, reflecting scheduled maintenance at Santander and winter conditions at Caribou. We are continuing to further optimise the operations and anticipate strong performance for the balance of the year,” stated president and CEO Dr Mark Cruise.

Gross profit from mining operations was $36.6-million during the period, compared with $9.68-million a year earlier.

The company recorded a 187% year-on-year rise in revenue to $114.72-million, on the sale of 98 171 t of zinc concentrate – up from sales of 38 928 t a year earlier – and containing 89.5-million pounds of payable zinc, and 10 169 t of lead-silver concentrate, compared with 13 034 t in the same period of 2017.

Trevali reported provisional realised commodity prices of $1.49/lb of zinc (up 18.25%), $1.09/lb of lead (up 3.8%), and $16.53/oz of silver (down 8%).

Total consolidated C1 cash costs for the quarter were $0.83/lb zinc, and all-in sustaining costs came to $0.97/lb zinc. C1 cash cost were slightly higher, as Rosh Pinah recorded no lead sales in the quarter resulting in a reduction of by-product credits. The company expects grades at Rosh Pinah to improve in the back half of this year to about 9% to 10% and has maintained its production guidance.

Trevali reiterated its full-year production guidance of 400-million to 427-million pounds of zinc, 43.8-million to 46-million pounds of lead, and 1.4-million to 1.47-million ounces of silver.

Several things are working in Trevali’s favour as the year progresses, with free cash flow generation expected to rise on the back of a reduction in inventory from both Perkoa and Rosh Pinah; an improvement in costs across all four operating assets; and lower benchmark zinc treatment costs, which were settled in the second quarter at $147/t from $172/t, but are retroactive to the start of the year.

Edited by Creamer Media Reporter

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