Trevali Mining (TSX: TV) is accelerating its business improvement program targeting the overall reduction in all-in sustaining costs (AISC) to $0.90/lb by 2021, a year earlier than originally planned.
Of the original target of $50 million in annualized sustainable efficiencies, the program is forecasting to deliver $43 million of recurring, annualized efficiencies in 2020, of which $30 million has been delivered at the end of Q2 2020.
The company has undertaken immediate one-time cost reductions in 2020 of $37 million, up from the previously estimated $41 million in Q1 2020.
The company reported production of 66 million pounds of zinc at an AISC of $1.05 per pound in Q2, a drop of 34% compared to 99 million pounds of Q1 2020.
The Perkoa underground mine in Burkina Faso, Rosh Pinah mine in Namibia and Santander in Peru are all operating at full capacity. Operations at Caribou were placed on care and maintenance on March.
Trevali issued updated guidance for 2020 with production guidance for H2 2020 between 148 – 163 million pounds of payable zinc, C1 cash costs of $0.80 – $0.88/lb and AISC of $0.89 – $0.97/lb.
“In the second quarter we continued to optimize the business and were able to reduce our costs despite covid-19 related impacts at Santander and lower overall group production,” CEO Ricus Grimbeek said in the media statement.
According to the company, exploration capital expenditures will be focused on restarting drilling at Perkoa. Trevali also said it expects to publish the Rosh Pinah 2.0 Expansion Project pre-feasibility study in Q3 2020.
The company has secured additional liquidity of up to $45 million from its syndicate of lenders and its largest shareholder, Glencore.
Trevali entered into a second amendment and restarted credit agreement with lenders for an up to $150 million first lien secured revolving credit facility. The miner also entered into an up to $20 million second lien secured facility with Glencore Canada.
Midday Friday, Trevali’s stock was up 18% on the TSE. The company has a C$104 million market capitalization.