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Be the first with the news that moves the market- Trevali Mining Corporation (TSX:TV) is implementing a number of cost saving measures to mitigate a lower-than-expected zinc price
- the company announced it was suspending operations at Caribou to preserve the value of the site’s orebody and has withdrawn its 2020 guidance
- Trevali has also accelerated its T90 efficiency program and plans to get its all-in-sustaining cost to C$0.90 per pound by the beginning of next year
- Since the beginning of the year, the price of zinc has fallen by around 20 per cent, to its lowest point in almost four years
- Trevali Mining Corporation (TV) is holding steady, with shares trading at 8 cents and a market cap of $64.6 million
Trevali Mining Corporation (TSX:TV) is implementing wide-spread cost saving measures, as the price of zinc continues to fall.
Since the beginning of the year, the price of zinc has fallen by around 20 per cent, to its lowest point in almost four years. This has been largely attributed to the COVID-19 pandemic’s ongoing economic impact.
Trevali currently operates the Perkoa Mine in Burkina Faso, Rosh Pinah Mine in Namibia and the Santander Mine in Peru, all of which produce zinc.
In addition, the company owns a number of properties in Canada, including the Caribou Mine in New Brunswick.
On March 26, the company announced it was suspending operations at Caribou to preserve the value of the site’s orebody. At the time, the company stated that, due to the low zinc price, production at Caribou simply wasn’t economically viable.
Currently, all the comapany’s other mines remain fully operational, with little to no impact from the pandemic.
Trevali also chose to withdraw its 2020 guidance until the market stabilised.
Late last year, the company implemented its T90 program to reduce cost inefficiencies and improve the all-in-sustaining cost of production to C$0.90 a pound.
Trevali had previously hoped to reach this target by the beginning of 2022. However, due to the success of the program and the recent economic pressures, the company has pushed that target forward to the in beginning of 2021.
In a further effort to cut costs, the company is retaining C$32 million, which was previously allotted for capital spending, exploration and development.
Ricus Grimbeek, President and CEO of Trevali, believes that these strategies are required to weather the coming months.
“As the pandemic continues to depress zinc prices, we have also taken strong measures to reduce cash outflows and preserve liquidity.
“We will continue to operate with the health and wellbeing of our workers and communities at the front of mind, while taking aggressive measures to steer us through the unprecedented market that is affecting us all,” he said.
Trevali Mining Corporation (TV) is holding steady, with shares trading for 8 cents at 10:39am EST.
