Trevali, government talk re Caribou mill start-up plans

2012-08-02 08:58 MT - News Release

Dr. Mark Cruise reports

TREVALI PROVIDES CARIBOU MILL UPDATE-ADVANCES FOCUS TO 'STAND-ALONE' OPERATIONS IN LIGHT OF POSITIVE PROGRESS WITH PROVINCE OF NEW BRUNSWICK

Trevali Mining Corp. has provided an update on its progress to move to stand-alone mineral processing operations in the Bathurst mining camp of New Brunswick.

Caribou transaction

Since the announcement of the transaction to acquire the former Caribou mill and mine complex from Maple Minerals in May, 2012 (see NR-12-14 for details), the company has been working closely with the Province of New Brunswick in order to facilitate restart of milling operations in a timely manner.

In the intervening period the company has submitted a stand-alone site restart business plan in addition to a final site closure plan to the Province, and progress to date has been excellent. Trevali and provincial officials are working toward a definitive agreement whereby the Province will approve Trevali to operate the Caribou site. The company cautions that the new environmental liability agreement is currently being drafted and requires Cabinet-level sign-off, however based on progress to date it is anticipated that Trevali may be in a position to close the transaction by the end of third quarter 2012.

Focus on stand-alone operations

In light of these positive developments the company has commenced to shift its efforts from short-term toll milling to long-term underground development and mine planning in order to facilitate the anticipated restart of Caribou mill in 2013.

Underground development and initial (precommercial) production mining to date have been very instructive and have provided excellent information on ground conditions, potential production rates for a fully ramped operation and metallurgical recoveries to produce saleable zinc, lead-silver and copper-gold concentrates. This information will enable further optimization and streamlining in order to support stand-alone mineral processing operations at the Caribou mill as well as preserving the Upper zone of the Halfmile deposit for anticipated lower cost stand-alone operations.

The company plans to drive the main Halfmile ramp to the thicker and higher grade zones of the deposit where NI 43-101 indicated resource grades are estimated to increase from 6.72 per cent to 8.68 per cent zinc, 2.31 per cent to 2.81 per cent lead and 16.95 to 37.94 grams per tonne silver.

Table 1: Halfmile Deposit - Indicated Resource Estimate at 5% ZnEQ 
Cut-Off after Wardrop-Tetratech                                      
                                                                        
------------------------------------------------------------------------
Zone            Tonnes      ZnEQ       Zn%       Pb%       Cu%    Ag g/t
------------------------------------------------------------------------
Upper        1,192,700      7.96      6.72      2.31      0.43     16.95
------------------------------------------------------------------------
Lower        4,472,200      9.65      8.68      2.81      0.12     37.94
------------------------------------------------------------------------
North          597,200      7.56      6.78      1.40      0.49      4.84
------------------------------------------------------------------------
Total        6,262,100      9.13      8.13      2.58      0.22     30.38
------------------------------------------------------------------------

Debt facilities

The company also continues to make major progress on securing a corporate-level debt facility in order to support the Caribou mill restart where the company plans to add a copper circuit and modify the mill so that it can treat all three of its deposits in the Bathurst mining camp; Halfmile, Stratmat and Caribou (upon closure of the transaction).

Seven financial institutes and/or end-users have signed confidentiality agreements and due diligence is progressing well. The company hopes to be in a position to announce implementation of a facility in late summer.

The Company cautions that failure to finalize an agreement with the Province of New Brunswick by Dec. 31, 2012, will result in delays to the company's plans to move to stand-alone mining/milling operations and could jeopardize the announced Caribou transaction.

The company also cautions that failure to secure such a debt facility will result in delays/deferrals to stand-alone operations until either a workable debt facility is secured and/or anticipated cash flow from its Santander operation is sufficient to enable a restart.

Qualified person and quality control/quality assurance

Dr. Mark D. Cruise, EurGeol, Trevali's president and chief executive officer, 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.

We seek Safe Harbor.