Global base metals miner Trevali has deferred its expansion plans for the Rosh Pinah zinc mine, in Namibia, to a future date, as it moves to preserve liquidity during the economic downturn.
The Vancouver-based company, which also owns mines in Peru, Canada and Burkina Faso, said on Wednesday that it would still publish the Rosh Pinah 2.0 expansion project prefeasibility study in the second quarter, but that an investment decision initially planned for 2020 would be deferred.
Trevali previously said that the expansion in Namibia would require an investment of between $60-million and $80-million to boost production by between 60% and 80%, reduce costs, and improve recoveries and concentrate grades.
The Rosh Pinah expansion formed part of the T90 programme that Trevali launched in November 2019.
President and CEO Ricus Grimbeek reported that the T90 platform had laid the foundation that allowed Trevali to swiftly respond to the current economic downturn. The group placed its Caribou mine, in New Brunswick, Canada, on care and maintenance at the end of March and delivered $30-million in sustainable efficiencies from its three other mines.
This supports the T90 goal of bringing all-in sustaining costs (AISC) to below $0.90/lb.
Grimbreek said that it would achieve its goal one year earlier than planned, which costs to fall to the targeted level at the beginning of 2021.
For 2020, Trevali also reduced its discretionary spending by cutting $41-million from its planned capital and exploration expenditures.
“While we are focused on the costs we can control, the zinc market continues to be disrupted. After hitting 15-year lows, the zinc price decline has reversed and has been steadily rising while off-site costs including treatment charges and shipping costs have been decreasing as the impact of global mine curtailments has begun working its way through the supply chain.
“Moving forward we will continue to operate with the health and wellbeing of our workers and communities at the front of mind while delivering on our T90 programme and capturing the value of an improving zinc market,” said Grimbreek.
Trevali produced 99-million pounds of zinc, at a C1 cash cost of $0.96/lb and AISC of $1.10/lb in the first quarter. This is a 6% decrease on the fourth quarter of 2019 and a 2% decrease on the first quarter of 2019.
Its lead production was 10.7-million pounds and its silver production was 0.3-million ounces in the first quarter.