Lundin Mining achieves 2019 production targets

Lundin Mining Corp. [LUN-TSX; LUMI-Sweden] on Thursday January 23 released weaker-than-anticipated operating results in the fourth quarter of 2019, largely driven by lower grades at its Candelaria mine in Chile.

Lundin is a diversified Canadian base metals mining company with operations in Chile, the United States, Portugal, Sweden and Finland, primarily producing copper, nickel and zinc. Lundin also holds an indirect 24% equity stake in the Freeport Cobalt Oy business, which includes a cobalt refinery in Kokkala Finland.

However, despite a somewhat softer end to the year, 2019 production guidance was achieved at every asset, and there were no changes to the company’s previously announced production forecasts.

On Thursday, Lundin shares eased 2.5% or 19 cents to $7.30 on volume of 2.5 million. The 52-week range for the shares is $5.47 and $8.08.

In the fourth quarter of 2019, attributable copper production of 59,000 tonnes was 8% below Scotiabank forecasts of 64,000 tonnes. This was largely a reflection of a weaker performance at Candelaria due to below mine plan head grades, and to a lesser extent, the performance of the Chapada copper-gold mine in Brazil.

Despite the softer fourth quarter operational results, total 2019 consolidated copper, zinc and nickel production of 235,000 tonnes, 152,000 tonnes and 13,500 tonnes all met or slightly exceeded the most recent annual guidance ranges of 227,000-245,000 tonnes, 149,000-157,000 tonnes and 12,000-15,000 tonnes respectively.

Lundin has recently said it anticipates strong growth in its metal production.

The company said copper production is expected to rise by over 20% in 2020 compare to 2019, with full year contributions from the Chapada copper-gold mine and Candelaria mining complex.

The company said zinc production is forecast to increase by over 15% in the same period while nickel production will jump by over 25%.

Lundin acquired a 100% interest in the Chapada copper-gold mine from Yamana Gold Inc. [YRI-TSX; AUY-NYSE] for US$800 million. A traditional open-pit truck and shovel operation, Chapada was previously expected to produce approximately 54,500 tonnes of copper and 100,000 ounces of gold this year (75,000 tonnes of copper equivalent) at a co-product cash cost of between US$1.60 and US$1.80 a pound for copper and US$430 per ounce for gold equivalent.

The three-year production outlook for Chapada is based on a NI 43-101 technical report that was filed on SEDAR on October 10, 2019. Copper production is forecast to be between 51,000 and 56,000 tonnes over the next three years based on the current 24 million tonne per-year throughput rate.

Chapada gold production is expected to be 70,000 to 95,000 ounces over the next three years, marking a significant increase in Lundin’s upstream gold output.

At Candelaria, copper production is expected to increase during the next two years, primarily on the back of improving copper head grades and as the benefits of reinvestment initiatives are realized.

Copper production there is forecast to average approximately 180,000 tonnes annually over the 10-year period from 2020 to 2029.

Meanwhile, after an expected increase of 25% next year, nickel production is expected to remain at this increased level over the three-year period as higher grade ore from the Eagle East mine in Michigan contributes to mill feed. Eagle is a 2,000 tonnes-per-day underground nickel-copper mine.

Additionally, the Neves-Corvo Zinc Expansion Project (ZEP) in Portugal is advancing on schedule for phased ramp-up in 2020. Following next year’s 15% rise, zinc production is forecast to increase by a further 30% in 2021, over 2020, with a full year contribution from ZEP.

Centerra resumes gold production in Kyrgyzstan

Centerra Gold Inc. [CG-TSX; OTC-CAGDF] said Thursday January 23 that it has received all the necessary approvals and permits to restart open pit mining operations and to continue milling activity at its Kumtor gold mine in Kyrgyzstan for the remainder of 2020.

The announcement comes after two employees went missing following a significant rock movement in the Lysii Waste Rock Dump early on the morning of December 1, 2019.

Centerra said the country’s state agencies have also approved the company’s 2020 mine development plan for the Central Pit, including the revised waste dumping plan and special safety measures to place waste rock material in the Central Valley waste rock dump and the Sarytor waste rock dump.

Open pit mining operations are currently ramping up and are expected to be in full mining production early next week, while the mill continues to process stockpiled ore as planned for 2020. In addition, Kumtor is continuing its own internal review and co-operating with the Kyrgyz authorities’ inquiries in relation to the Lysii Waste Rock Dump.

On Thursday, Centerra shares eased 2.2% or 22 cents to $9.65 on volume of 634,574. The shares are currently trading in a 52-week range of $6.27 and $13.00.

Centerra halted open pit operations at its Kumtor Mine after the two employees went missing in early December.

Kumtor said it initiated an emergency evacuation of all mine personnel from the area and an immediate cessation of mining operations. It said two Kumtor employees who were working in the area did not report to the emergency gathering area and remain missing.

However, after six weeks, the search operation for the company’s two missing employees at Lysii Waste Rock Dump returned no sign of the two missing employees. With the consent of the families and the relevant Kyrgyz state agencies, including the Ministry of Emergency Services, the decision was made to stop the search effort.

A funeral prayer was held at the site attended by family members, relatives and community supporters. “Our thoughts, condolences and prayers are with our employees, families and our deepest appreciation is to all those involved in the search efforts,” Centerra said.

The Kumptor mine is one of two flagship assets in the Centerra Gold portfolio. The other is the Mt. Milligan Mine, which is located in British Columbia. The company’s portfolio also includes the Oksut Gold project in Turkey and the late stage Kemess development project in B.C.

At the time when the two miners were reported missing, Centerra said the Kumtor mill would continue uninterrupted processing ore that has been stockpiled on surface and there was no change to the company’s production outlook for 2019.

Kumtor is the largest gold mine operated in Central Asia by a Western-based company. Mining operations are carried out using conventional open-it mining methods.

Higher grades and recoveries at Kumtor and higher gold grades at Mt. Milligan enabled Centerra to produce a better than expected 206,000 ounces of gold and 21.2 million pounds of copper in the third quarter of 2019. That includes 150,305 ounces from Kumtor and 55,355 ounces from Mt. Milligan

Centerra recently raised its 2019 gold production guidance to 730,000-765,000 ounces from an earlier forecast of 705,000-750,000 ounces.

The company said construction at the Oksut Project in Turkey is now 79% complete and remains on scheduled with the first gold pour expected in January of 2020.

President of the Republic of Sierra Leone to attend Mining Indaba 2020

The President of the Republic of Sierra Leone, Brig. Rtd. Julius Maada Wonie Bio, is confirmed to attend the 2020 Investing in African Mining Indaba, taking place in Cape Town from 3 – 6 February 2020. President Bio was elected as the 5th President of the Republic of Sierra Leone in May 2018 and is popularly referred to as the “Father of Democracy” because of his contribution towards the restoration of democracy and attainment of peace in the country.

Sierra Leone has large reserves of diamonds, iron ore, rutile and bauxite as well as small-scale artisanal mining of gold and diamonds. The country possesses one of the largest rutile reserves in the world. Whilst mining contributes about 20% to the national GDP, it is said to account for around three quarters of the country’s exports.

Prudent management of natural resources is a stated pillar of the national Agenda for Prosperity, and there is a strong commitment to using the Extractive Industries Transparency Initiative (EITI) as a tool to bring reforms that will attract much-needed investment in Sierra Leone.

As part of their drive to attract investment, Sierra Leone will be exhibiting at Mining Indaba and their delegation will also include the Minister of Mineral Resources, Hon. Foday Rado Yokie who will be presenting a  country case study –  “The new direction for Sierra Leone’s mining sector” –  where he will be reporting on the recently completed airborne geophysical survey and the achievements that the country has made in formalising the artisanal mining sector which has not only benefitted local communities, and women in particular, with a source of income but also the economy as a whole. Minister Yokie will also be participating in the West Africa panel discussion as part of the Intergovernmental Summit on Wednesday at Mining Indaba.

President Bio’s vision for the future of Sierra Leone is underpinned by his belief that the key to economic development lies in the investment in human capital – 20% of the national budget supports free, quality education, and women admitted to university to study science, technology, engineering and mathematics receive a full scholarship.

“We will have a healthier, better educated and highly skilled young population fit for the 21st century global economy, and that will lead and drive the country’s national development. They will be well-equipped to deploy science, technology and innovation which in term will attract investment.” Explains President Bio.

“The theme for Investing in African Mining Indaba 2020 is Optimising Growth and Investment in the Digitised Mining Economy – and His Excellency Julius Maada Wonie Bio is the new generation African leader recognising that innovation and technology with drive mining investment on the continent.” comments Tom Quinn, Head of Content for Mining Indaba.

The programme content for 2020 is geared towards exploring the key drivers of investment decisions within the African mining market and forging the future direction of the African mining industry. The Ministerial and Government programmed is set to attract some 38 ministers from across the African continent and beyond, cementing Mining Indaba’s reputation as the world’s largest mining investment event.

Following the success of the 25th anniversary, Mining Indaba 2020 is gearing to attract even more junior, mid-tier and major mining companies and even more investors with the aim of facilitating deal-making and investment opportunities. 2020 will also bring industry-leading content including the brand-new General Counsel Forum, Mining 2050, the Intergovernmental Summit, resource nationalism, innovations in technology, Battery Metals Day and the return of the popular Investment Battlefield.

About Mining Indaba

Investing in African Mining Indaba is the largest mining investment event in Africa. With a proven track record of bringing together Heads of State, Ministers, senior Government representatives, Mining Companies, Mid and Junior Miners, Investors, services and equipment providers, Mining Indaba is the place to meet everybody who’s anybody in the African and global mining industry. It is the must-attend event that drives the mining industry forward, provides attendees with an unmatched access to the entire value chain and the most influential players in African mining for four days of high-quality content, deal-making and networking opportunities.

Joanna Kotyrba

Investing in African Mining Indaba
joanna.kotyrba@miningindaba.com

R&A Strategic Communications

Katherine Bester
+27 11 880 3924
indaba@rasc.co.za

Kukielski named permanent CEO at HudBay

HudBay Minerals Inc.  [HBM-TSX, NYSE] on Wednesday January 22 said its board of directors has formally appointed Peter Kukielski as the company’s permanent President and CEO. Kukielski has served as interim CEO since July, 2019 following the departure of Alan Hair, who spent more than 20 years with Hudbay and was instrumental in the company’s growth, serving as chief operating officer from 2012 to 2015 before being appointed President and CEO in 2016.

Kukielski has more than 30 years of extensive global experience within the base metals, precious metals and bulk materials sectors, having overseen operations across the globe.

On Wednesday, Hudbay shares eased 1.7% or $0.08 to $4.54. The shares are currently trading in a 52-week range of $3.98 and $10.42.

Having put management uncertainty behind it, HudBay is expected to refocus now on developing its growth initiatives.

News of Hair’s departure comes after HudBay and Waterton Global Resource Management Inc. recently reached a settlement agreement regarding the proxy contest for HudBay’s board of directors.

Waterton Global Resource Management is a private equity firm, which owns 12% of HudBay’s outstanding shares.

Under the agreement, Waterton won the right to appoint three of the 11 board seats. The board pledged to launch the search for a new Chair.

The deal was viewed as positive because it eased fears that Waterton might dump its Hudbay shares if it lost the proxy battle.

HudBay is an integrated mining company, primarily producing copper concentrate (containing copper, gold and silver), zinc concentrate and zinc metal. The company owns four polymetallic mines, four ore concentrators and a zinc production facility.

The operations are located in northern Manitoba and Saskatchewan, Peru and Arizona.

The Waterton board nominees were Peter Kukielski, Daniel Muniz Quintanilla, and David Smith.

HudBay’s current Chair Alan Hibben agreed to remain in that position until a successor is found. He is expected to retire from the board at the 2020 annual general meeting.

Waterton and HudBay recently clashed over media speculation that HudBay was in talks to buy Mantos Copper SA, a Chilean private miner owned equally by Audley Capital and Orion Mine Finance. Published reports said Mantos was seeking a buyer to fund its expansion plans.

Waterton responded by saying it was opposed to the idea. It expressed the view that HudBay should not be pursuing growth for the sake of empire building.

Waterton also said if HudBay intended to begin construction of the Rosemont copper project in Arizona in the first quarter of 2019, it could face an imminent funding requirement of $1.1 billion. “This reinforces, from a capital allocation perspective, the need to terminate any potential negotiations for new acquisitions immediately, and specifically acquisitions like the Mantos transaction,” Waterton said.

HudBay recently announced that it has completed the permitting process at its Rosemont Project. Rosemont is an open-pit copper-molybdenum-silver porphyry-skarn deposit located in Arizona. It is expected to be one of the largest copper mines in the U.S., accounting for 10% of total U.S. copper production.

HudBay said the project has achieved a key milestone after receiving the approved Mine Plan of Operations (MPO) from the U.S. Forest Service.  The issuance of the MPO is the final administrative step in the permitting process.

Rosemont is expected to produce approximately 127,000 tonnes of copper annually at a cash cost of US$1.14 per pound (net of by-product credits) over the first 10 years of operations.

Jervois ups Idaho cobalt estimate by 22%, stock advances

Jervois Mining Ltd. [JRV-TSXV, ASX; JRVMF-OTC; IHS-FSE] said Wednesday January 22 that it has increased the contained Measured Resource at its Idaho cobalt project by 22%.

Jervois shares advanced on the news, rising 5.3% or $0.01 to 20 cents. The shares are currently trading in a 52-week range of 13 cents and 24 cents.

Jervois is focused on becoming a global supplier in the emerging battery metals market. In keeping with that focus, the company swallowed eCobalt Solutions Inc. last year in a $57.6 million deal, a move that gave Jervois Mining access to eCobalt’s Idaho Cobalt Project, a high-grade cobalt deposit located in Idaho.

Idaho Cobalt Operations (ICO) is Jervois’ flagship primary cobalt deposit located in Idaho near the town of Salmon. Over the course of 20 years, approximately US$100 million has been invested in developing the mine.

It is fully environmentally permitted for ore processing capacity of up to 1,200 tons/day and has high cobalt and copper grades, with a gold by-product.

The ICO is located in the heart of the Idaho Cobalt Belt, a unique mineral rich, prolific metallogenic district unique to North America, which historically produced 2 million tons of contained cobalt between the early 1900s through to the 1960s.

The project consists of 243 contiguous unpatented lode mining claims and is situated in an area ranging in elevation from 6,100 feet to 8,100 feet. Vehicle access is via a series of public-access gravel roads.

The company said Measured and Indicated Resources at the site now stand at 5.2 million tonnes, grading 0.44% cobalt (50.1 million pounds), 0.69% copper (80.1 million pounds), 0.53 g/t gold (89,000 ounces). The estimate is based on a 0.15% cobalt cut-off.

Jervois said it updated the Measured Resource estimate after completing 3,125 metres of drilling in 19 holes to support its bankable feasibility study. The updated model uses modified methodology to improve estimation using industry standard applications for narrow orebodies, with Jervois also adopting a more appropriate approach to stope and mine plan design.

“This has involved block rotation and adoption of a smaller cell size than previously used, as the previous MRE released by eCobalt Solutions on February 7, 2018 was unrotated and used cell sizes not conducive to the narrow high-grade interzone intercepts found in the Main Ram Zone, the company said in a press release.

Jervois also said the bankable feasibility study remains on track for completion by the end of March 2020, with first concentrate production scheduled in the fourth quarter of 2021.

Cobalt is generally mined as a by-product of copper and nickel

“Battery demand for cobalt is expected to rise sharply, and ethical, non-Democratic Republic of Congo, low capital sources of supply outside the Idaho Cobalt Operations are essentially non-existent,” the company said.

Meanwhile, mine design and scheduling are progressing as is plant design, the company added.

In a separate development, Jervois also released an update on drilling at its Kilembe and Bujagali area properties in central and western Uganda following a partial receipt of confirmed assays from 2019 exploration.

Drilling at the Kilembe area properties targeted surficial gold copper mineralization detected through earlier geochemical programmes.  Drilling at Bujagali targeted the Waragi anomalies detected through earlier geochemical and geophysical anomalies with 1,740 metres completed.

The company said the latest drilling results and high-grade rock chip samples provide further encouragement to continue with the current exploration pace on the Ugandan projects for both copper-cobalt and copper-gold.

X-Terra steps up New Brunswick gold drilling

X-Terra Resources Inc. [XTT-TSXV; XTR-FSE] shares rallied on Wednesday January 22 after the company said it is planning to do additional drilling on high priority targets on its Grog and Northwest properties, located in Restigouche County, New Brunswick.

The targets were defined as a result of the fieldwork and data processing completed during exploration in 2019.

X-Terra shares advanced on the news, rising 19% or $0.02 to 12.5 cents on active volume of almost 1.5 million. The shares are trading in a 52-week range of $0.07 and 18 cents.

X-Terra is a Quebec-focused gold exploration company. Its flagship Veronneau Project lies on the Colomb-Chaboullie greenstone belt about 200 km north of Matagami.

X-Terra currently has the option to acquire an interest in 34 mining claims that included the Grog, Rim, Dome and Bonanza mining properties, which are located approximately 30 km southwest of the town of Campbellton. It can acquire a 70% stake in the properties over four years.

Under an agreement, X-Terra pledged to issue 7.0 million shares to the optionor and spend $3.1 million on exploration. Three of the mining claims are known as the Grog property, which is subject to a 1% net smelter return royalty payable to the former owner. Dome, Bonanza and Rim are collectively known as the Northwest property.

X-Terra said it completed its due diligence over the properties in October, 2018, which it said confirmed the potential of a large disseminated gold system at Grog Brook. It said the best gold values were obtained over the Northwest property and include 1,205.06 g/t gold at the Rim section of the Northwest property, 149.97 g/t gold at Bonanza and 47.88 g/t at the Dome section.

X-Terra recently said geochemical surveys, a high-resolution magnetic survey and induced polarization were completed last year across the Grog and Northwest properties, in addition to the trenching and structural mapping that produced a first drilling plan.

The company said Grog gold mineralization targets correspond to an area of about six km along the Northeast McKenzie Fault Zone.

The Northwest veins system is located about 25 km further south in a distinct geological environment composed of wacke sediments metamorphosed to the greenschist metamorphism facies.

In this context, low sulfides, free gold-bearing quartz veins are hosted in strongly-dipping shear zones marked locally by drag folding.

The objective of the first drill holes was to confirm the position of gold-bearing structures, evaluate the geometrical parameters such as dip and thickness, and recover information that will validate geological controls on gold mineralization.

X-Terra has previously said that six distinct high-priority targets were modelled to be tested first with one or two shallow drill holes. The company was planning to drill between one and three shallow holes per target.

However, based on the success and observations in the field, the company said it has decided to add additional holes to certain targets in order to gain a better understanding of the underlying geological system and mineralized corridors.

Lord Conrad Black says Canada should do more to develop its resources

By Peter Kennedy

Former media baron Conrad Black warned a Vancouver mining conference about the need to prevent the “victimization” of energy producing provinces like Alberta and Saskatchewan.

In a speech to the Cambridge House International Vancouver Resource Investment Conference (VRIC) on Sunday, Black touched on a number of other topics, including the political situation in the United States, the impact of climate change on public policy and the virtues of capitalism.

“The only economic system that works is capitalism because it is the only one that is aligned with the universal human desire to have more,” he said.

Black is a controversial figure to be sure. A founder of the National Post daily newspaper, he was once at the helm of a media empire that included English Daily Telegraph, the Post in Jerusalem and the Chicago Sun-Times. He was convicted of felony fraud and obstruction of justice by a U.S. district court in 2007. The charges were later upheld by the country’s Supreme Court. In 2018, he wrote a biography of Donald Trump and was granted a full pardon by the U.S. President in May, 2019

However, the decision to name him as keynote speaker as this year’s VRIC conference was clearly a popular one. Many investors showed up an hour early to hear him give a 35-minute speech without the aid of notes. He later participated in a panel discussion with former Canaccord Financial Chairman Peter Brown and Fraser Institute President Niels Veldhuis.

As Black was asked to speak about the current state of Canada in a natural resources context, it was no surprise to hear him discuss public policy and the impact on the oil and gas sector.

“On the issue of equitable treatment of resource [producing provinces] I think we get a stark F,” he said. “The oppression of Saskatchewan and Alberta in particular is a disgraceful and outrageous thing.”

This was clearly a reference to Canada’s failure to complete major pipeline projects which are required to get domestic oil and gas production to international markets outside of the United States.

Resource industry officials have complained that Federal legislation such as Bill C-69, which aims to overhaul the way that major energy projects are approved in Canada, is actually driving away investment by making it more difficult to get projects like pipelines approved.

He also expressed his view that the collapse of the former Soviet Union has prompted people on the left of the political spectrum to use the environmental movement as a powerful battering ram to attack capitalism.

Black said the current level of alarm surrounding the threat of climate change was unjustified.

“There is no scientific unanimity about climate change, no unanimity at all that it is bad or that it is influenced by what people do,” he said.

Meanwhile, as Trump prepared to face an impeachment trial in Washington, Black reiterated his support for the U.S. President, saying he has had the best first term of any President in history, with the exception of Abraham Lincoln, Franklin D. Roosevelt and Richard Nixon.

“I think his tax cuts have worked, his regulation has worked. I think his reduction of illegal immigration has worked,” he said. Trump should be praised for standing up to China, Black said.

“He has a good chance of getting re-elected because the Democratic Party contenders are so unimpressive.”

Black also praised publisher Rupert Murdoch. “He has made the Wall Street Journal a great newspaper.”

Meanwhile, with the copper price trading near an eight-month high, investors could be in for a good couple of years, Peter Brown said during the panel discussion. Copper is the metal that will face the most shortages, he said. The forecast came amid speculation that renewed global growth concerns could support safe havens like gold.

Cantex says Fipke has not sold shares

Cantex Mine Development Corp. [CD-TSXV; CTXDF-OTC] issued a statement Tuesday January 21 saying that it wanted to clarify recent System For Electronic Disclosure By Insiders (SEDI) filings related to the Yukon silver-lead-zinc explorer.

Cantex said it has been advised that, contrary to recent SEDI filings, neither Chairman Dr. Charles Fipke, nor any entity associated with him has sold any shares of Cantex.

“The recently reported dispositions were all Christmas gifts of shares to family members and employees of CF Minerals, and the SEDI filings have been amended accordingly,” the company said in a press release. Headed by Fipke, CF Mineals is a Kelowna, B.C.,based specialist in heavy mineral geochemistry.

Cantex is a company that set out to define a world class silver-lead-zinc deposit on its 100%-owned North Rackla claim block, which is located approximately 100 km northeast of Mayo in central Yukon.

It has launched the search roughly 30 years after Fipke discovered Canada’s first commercial diamond mine (Ekati) in the Northwest Territories

Covering 14,077-hectares, the Yukon project is also situated to the northeast of both Atac Resources Ltd.’s [ATC-TSXV] Rackla gold property and Victoria Gold Corp.’s [VIT-TSXV] new Eagle Mine.

Hopes that Fipke is onto another big find sparked a steady rise in the value of Cantex shares from 18 cents in October, 2018 to a recent high of just under $7.00 in August, 2019. But the stock price has plunged to below 60 cents this week.

On Tuesday, the shares were down 1.5% or $0.01 to 65 cents and now trade in a 52-week range of 56 cents and $6.99.

Last year, the company was hoping to take a significant step towards its goal by drill testing almost 1 km of strike length on the massive sulphide zone to a depth in places of up to 550 metres. Should we intersect mineralization similar to that intersected last year, this will be a significant deposit, the company has said.

However, in a January 6, 2020, update, the company said it had completed 139 holes totalling 38,174 metres of core drilling at Rackla North, substantially more than the 18,000 metres proposed at the start of 2019.

The 2019 drill program is now complete and drilling is expected to resume when field conditions allow in late spring (2020), the company said in the update.

“With the onset of winter, avalanche hazard limited the area in which it was safe to work,” the company said. “Drills which were testing the continuity to depth beneath pad MZ 5 of the Extension Target and the strike extent of the mineralization at the Discovery Target were relocated to the flat till covered area between these two targets,” the company said.

Cantex went on to say that the till in this area is up to 50 metres thick, making targeting difficult as prospecting and soil-talus sampling were ineffective. “In addition, ground geophysical surveys (including gravity, electromagnetics, induced polarization and resistivity) were unable to define known massive sulphide mineralization, preventing their application.”

In spite of these challenges, Cantex said it successfully intersected significant sulphide mineralization.

The company said poor weather conditions towards the end of the year hampered air support to the project, delaying the shipment of core samples from the site. However, it said conditions did improve just prior to Christmas, allowing the samples to be sent out.

Cantex said the samples have arrived at CF Mineral Research, where they are being crushed and pulverized prior to be sent to ALS Global in North Vancouver for assaying.

Trevali posts record zinc production

Trevali Mining Corp. [TV-TSX, LMA; TREVF-OTCQX; 4T1-FSE] said Monday January 20 that it is positioned to be a 400-million-pound annual zinc producer with a reduced cost profile until 2022.

The prediction came as Trevali released its preliminary fourth quarter and full-year production results as well as operating, capital and exploration spending guidance for 2020.

Trevali is a Vancouver-based mining company. The bulk of its revenue is generated from base metals mining at four operations. They are the 90%-owned Perkoa Mine in Burkina Faso, the 90%-owned Rosh Pinah Mine in Namibia, the wholly-owned Caribou zinc-lead-silver mine in New Brunswick, and the wholly-owned Santander Mine in Peru.

On Monday, the company said it exceeded its 2019 zinc production guidance by producing a record 417 million payable pounds of zinc last year.

Total lead and silver production also exceeded 2019 guidance with 50 million payable pounds of lead and 1.49 million payable ounces of silver produced in 2019.

The company also launched the T90 program, inclusive of the digital transformation program aimed at realizing $50 million in annual sustainable efficiencies and reducing all-in sustaining costs to $0.90 a pound by the beginning of 2022.

“In 2019, we started the transformation of Trevali,” said Trevali’s President and CEO Ricus Grimbeek. “The company meaningfully beat annual production guidance, the board was refreshed, a new management team was assembled and we launched the T90 program to modernize our operations and bring them down the cost curve,” Grimbeek said.

“The company is well positioned to be a 400-million-pound annual zinc producer with a reducing cost profile until 2022 when we intend to make a step change in production and cost as the RP2.0 expansion project at Rosh Pinah in Namibia is commissioned,” he said.

Trevali shares advanced on the news, rising 1.96% or $0.005 to 26 cents on volume of 1.19 million. The shares are currently trading in a 52-week range of 16 cents and 49 cents.

Consolidated production guidance for 2020 is estimated at between 380 million and 410 million pounds of payable zinc, 51 and 57 million pounds of payable lead, and 1.44 million and 1.58 million ounces of payable silver.

Consolidated cost guidance for 2020 for C1 cash costs is estimated at between $0.85 and $0.93 per pound of zinc. The all-in-sustaining cost (AISC) is expected to range between $0.98 and $1.08 per pound of zinc.

Capital expenditures for the group is forecast at $81 million, consisting of $57 million in sustaining capital, $12 million in exploration capital and $12 million in expansionary capital, which relates to initiatives under the T90 program, including deploying technology to improve productivity and decision making.

Marathon Gold ups M&I estimate by 15%

Marathon Gold Corp. [MOZ-TSX; MGDPF-OTC] has released an updated mineral resource estimate for its Valentine gold project in central Newfoundland. The new estimate is based on infill drilling last year at the Leprechaun and Marathon deposits.

The company said Measured and Indicated Resources now stand at 3.09 million ounces (54.9 million tonnes at 1.75 g/t gold), an increase of 400,000 ounces, or 15% in comparison with a previous estimate announced in October, 2018.

On top of that is an Inferred Resource of 960,000 ounces (16.8 million tonnes at 1.78 g/t gold), a decrease of 570,000 ounces, or 37%, compared with the previous estimate. This represents a conversion of 26% of the project’s Inferred Mineral Resources to higher confidence Measured and Indicated categories and a loss of 11%, with 63% remaining.

The company said the new estimate includes total high-grade, open pit Measured and Indicated Resources of 2.58 million ounces (30.6 million tonnes at 2.62 g/t gold) and low-grade, open pit Measured and Indicated Resources of 340,000 ounces (22.9 million tonnes at 0.47 g/t gold) available for use in the continuing Valentine gold project feasibility study.

On Monday, Marathon gold shares eased 1.9% or $0.03 to $1.52 on volume of 1.17 million. The shares are trading in a 52-week range of 78 cents and $1.76.

The Valentine Gold Camp hosts four near surface, mainly pit-shell constrained, deposits. The majority of the resources occur in the Marathon and Leprechaun deposits, which also have resources below the pit shell. Both deposits are open at depth and on strike.

Gold mineralization has been traced down over 350 metres vertically at Leprechaun and almost a kilometre at Marathon.

The four deposits outlined to date occur in a 30-km gold trend on the property, with much of the 24,000-hectare property having had little detailed exploration activity to date.

The Valentine Lake Gold Camp is accessible by year-round roads and is located in close proximity to Newfoundland’s electrical grid.

The project’s total Measured and Indicated Resources now stand at over 3.0 million ounces, continuing a trend that started in 2010. Most of the latest increase has come from the Leprechaun deposit, which now contributes over one million ounces of higher confidence mineral resources to the overall project inventory.

The new estimate incorporates the results of what is now over 270,000 metres of drilling, with drill spacing averaging 10 to 15 metres on 10-metre sections over core mineralized areas.

The Valentine Lake Project consists of two gold recovery operations: They include a milling/flotation/carbon and lead plant. The mill will process three million tonnes per year of high-grade mineralized material

The heap leach pad will process three million tonnes per annum of low-grade mineralized material from open pit operations and will consist of crushing, heap leaching and carbon-in-column gold absorption. The loaded carbon from the heap leach facility will be sent to the mill for gold recovery.