Strategic partnership with Glencore to fast-track production
Glencore providing US$2 million financing to Trevali
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 08/25/09 -- Trevali Resources Corp. ("Trevali" or the "Company") (CNSX: TV)(PINK SHEETS: TREVF)(FRANKFURT: 4TI) is pleased to announce a positive production decision from an internal mine development study on the Santander Silver-Lead-Zinc mine project in west-central Peru conducted in partnership with Glencore International AG ("Glencore") of Switzerland.
"The positive results from our joint study with Glencore confirms that our Santander project will be one of just a few new base metal producers to be coming on-stream in the current metals cycle - with planned concentrate sales providing Glencore a long-term, secure supply of zinc and lead," stated Trevali President and CEO Dr. Mark Cruise. "Achieving the production milestone and our strategic partnership with Glencore will give Trevali a strong platform to build upon our successes to date as well as the potential to open up additional opportunities."
Development plans include:
- Commencement of production from reprocessing of existing tailings prior to transitioning to hard rock mining.
- Open-pit development of the Magistral North and South deposits (Figure 1) providing initial hard rock production.
- Subsequent underground extraction utilizing sub-level stoping methods.
- Continued exploration to expand the current Magistral deposits and discover additional resources going forward.
The joint Trevali-Glencore mine development study is internal only and does not qualify as an independent National Instrument 43-101 report. However, based on the positive results of this study and Glencore's global experience on this deposit type - it plans to immediately commence site preparation for the mineral processing circuit at Santander and mobilization of the 2,000 tonne-per-day mill and concentrating circuit it is contributing to the mine development project.
To view Figure 1, please click on the following link: http://media3.marketwire.com/docs/tv825.pdf
Figure 1. Mine plan for the Magistral South, Central and North deposits from the joint Trevali-Glencore internal mine development study indicating planned open pits on the South and North deposits, and underground development modeling.
This joint mine development study with Glencore follows a Memorandum of Understanding entered into on May 15, 2009 (see NR-09-09) regarding the proposed development of and metal concentrate sales from the Company's Santander project. Key highlights of the planned joint business venture, structured to minimize dilution to Trevali and its shareholders, are as follows:
- Glencore will provide and operate a 2,000-tonne-per-day (tpd) concentrate plant, thereby allowing production at Santander at significantly higher levels than the 1,250 tpd production initially envisaged.
- Trevali can acquire the plant and associated infrastructure contributed by Glencore over time on a 'toll' basis, thereby acquiring 100% ownership in the new mill and processing complex over the coming years.
- Trevali will maintain its full control and ownership of the Santander project.
- Glencore will provide its operational expertise on a 'contractor / toll basis' from mining through to concentrate production.
- Glencore will provide to Trevali US$2 million, in the form of a convertible financing, to cover exploration, resource definition, development and operational requirements. An advance of US$500,000 can be drawn by Trevali upon the recent execution of a Head of Terms agreement with the balance available on upon execution of the Final Agreements.
