Canadian zinc producer Trevali sees strong global zinc prices persisting at least two years as it moves to boost production and mill throughput at its mines in Canada, Peru and Africa, company officials said Wednesday.
"We're of the opinion that zinc should strengthen from here," Mark Cruise, president and CEO of the Vancouver-based company, told analysts and investors in a conference call to discuss the company's third-quarter results.
Steve Stakiw, Trevali's vice president of investor relations and corporate communications, added "we see a couple of years, if not more, of stronger zinc prices."
Stakiw said some metals experts were forecasting an average zinc price of around $1.76/lb, or $3,880/mt, in 2018. Three-months zinc closed Wednesday on the London Metal Exchange at $3,151.50/mt.
Trevali mined 552,385 mt and milled 567,552 mt of ore in Q3, up from 397,864 mt mined and and 402,039 mt milled the year-ago quarter. Income from mine operations jumped more than 250% to a record $28.4 million from $8.1 million in Q3 2016.
But Trevali posted a Q3 net loss of $7.8 million, mainly related to its August acquisition of the Rosh Pinah and Perkoa zinc mines in Africa from Glencore. In Q3 2016, it posted net income of $1.8 million.
Rosh Pinah, in Namibia, produced 8 million lb of payable zinc and 1.3 million lb of payable lead in Q3.
Perkoa, in Burkina Faso, turned out 15.1 million lb of payable zinc in the one month Trevali owned the mine. Cruise said Perkoa "is a remote site" requiring the use of diesel power.
At Caribou, in the Bathurst mining camp of Canada's New Brunswick province, Trevali was "continuing a trend of increased production," Cruise said. Caribou's Q3 output was 20.8 million lb of payable zinc, 7.3 million lb of payable lead and 220,012 oz of payable silver.
The mine sold 20.6 million lb of zinc, 7.8 million lb of lead and 231,438 oz of silver in Q3 for revenue of $43.7 million at average realized metal prices of $1.40/lb for zinc, $1.08/lb for lead and $17.09/oz for silver.
Trevali's Santander mine in Peru produced 14.6 million lb of payable zinc, 3.9 million lb of payable lead and 194.214 oz of payable silver in Q3. Santander generated revenue of $27.9 million at average realized metal prices of $1.40/lb for zinc, $1.08/lb for lead and $17.25/oz for silver.
Expansion plans at Santander had been delayed because "we had some water issues at the mine this year, and we're putting in pretty significant pumping capacity at the moment," Cruise said. Trevali hoped to make a Santander expansion decision by the end of 2018, he added.
