Trevali Mining Corp

Good day, ladies and gentlemen, and welcome to the True Valley Mining Corporation third quarter 2020 financials and earnings conference call or webcast. After the speaker's remarks, there will be a Q&A session. If you would like to ask a question during that time, please press star 1 on your telephone keypad. You may press star 1 at any time during the call to enter the queue. I would like to remind everyone that this conference call is being recorded. I would now like to turn the call over to Brendan Green, Free Valley's Vice President of Investor Relations and Interim Chief Financial Officer. You may begin your conference.

Thank you, Chantal. Good day, everyone, and thanks for taking the time to join the call this morning. your attention to our forward-looking got language on slide two. Our discussion today will contain forward-looking information about the company's future performance. Although forward-looking statements are based on what management believes to be reasonable assumptions, actual results may turn out to be different to these forward-looking statements. For a complete discussion of the risks, uncertainties, and factors which may lead to actual operating and financial results, MD&A filed on CDAR dated September 30, 2020. I'd also like to mention that this conference call is being recorded and a replay webcast will be available one hour after today's call. In conjunction with this conference call, there is an accompanying PDF presentation available on the event section and the corporate presentation section of Trevally's website under the Investors tab. The link to our live webcast is also on Trevally's website under Event. The main presenter today is Rikas Grimbeek, Trevally's president and CEO, and he will be accompanied by Derek Dupree, Trevally's chief technology officer, and myself as Trevally's interim chief financial officer. Rikas, over to you.

Thank you, Brendan, and good day from my side to everyone on the call, and thank you very much for your time. Starting on slide four, the quarterly results for Q3 highlight significant turnaround for our business, both from a macroeconomic perspective and operationally. The zinc price averaged $1.06 per pound for the quarter, up from $0.89 per pound in Q2, and ended September at $1.09 per pound. Today the price hits the $1.17 and our view is that these prices will sustain and may go higher in the near term due to market forces which I will speak to later in the presentation. For the third quarter, this depreciation in zinc price contributed positively to the revenue and earnings. We also took the opportunity to put in place a hedging program to lock in some of these cash flows while retaining the exposure and leverage to the higher zinc price. Having executed on this hedging program, we are forecasting compliance with our financial covenants related to our credit facilities over the coming quarters. At the current zinc price, we are also meaningfully cash flow positive. With the business healthier and our debt maturing only in September 2022, this also means that the urgency to act under the strategic review process has diminished and we have more time to choose the best value-enhancing option for our business and our shareholders. Operationally, we produced over 74 million pounds of zinc, a 13% increase to the previous quarter. C1 cash cost of 81 cents per pound and an all-in sustaining cost of 91 cents per pound. This represents a 13% decrease in cash cost to the previous quarter, despite a temporary shutdown of operations at Santander related to COVID-19, where we lost the better part of a month's worth of production. Lastly, I'm pleased to confirm our previous revised guidance for the year that we put out as part of our second quarter results. Turning to slide five, I will step through the operations in detail. Starting with Pakawa, payable zinc production for Q3 2020 was at 39.3 million pounds. A 19% increase over the prior quarter due to improved zinc upgrades as higher grade stoves were mined in accordance with the revised mine plan that was developed when we updated our guidance in Q2. The average grade for the quarter was 12.7% zinc. In the quarter, we also restarted drilling on the T3 deposits, which lies below the hanging wall of the mainland and has the potential to extend the mine life of the cover. We will have initial drill results in the fourth quarter. In addition to the exploration activities related to T3 deposits and near mine exploration targets, we are also soliciting interest from potential partners to explore the regional land package that is further afield from the mine. At Raspina, we delivered the pre-feasibility study for the IP 2.0 extension project, which Derek will speak to the highlight in coming slides. I would like to point out that we have begun some of the initial work related to the final feasibility study, and we are now forecasting the completion of the study by mid-year 2021. We are also looking at solar energy to reduce energy costs at Raspina. We've submitted an application to become an approved market participant to the Namibian Electricity Regulator and have also expressed interest to sign a DAWA purchase agreement to purchase solar energy equivalent to 30% of our annual energy consumption. With respect to cost and production, a good performance from Raspina with production of 20.9 million pounds at an all-in sustaining cost of 90 cents, which did not have the benefit of the lead concentrate shipment this quarter and therefore a by-product credit. We will see the lead concentrate shipment in the fourth quarter as per plan. At the end of the third quarter, we had zinc concentrate build up in the inventory of approximately 12,000 tons, and so our payable sales were down, but this is just the timing issue which we will catch up in the fourth quarter. At Santander, as I mentioned on the previous slide, we restarted the operation on July 15th and are currently operating at full capacity with a reduced workforce focused on production. While we were impacted by the temporary shutdown, I'm happy to report that our production was medium to higher than Q2 at $14 million. and our all-in sustaining costs came in at 92 cents a pound due to the focus on production over development. This 92 cents a pound all-in sustaining cost is an especially good showing as it includes about $750,000 or about 5 cents a pound of COVID-related costs tied to the temporary shutdown. At Caribou, we continue to study a number of value-enhancing opportunities while the operation remains on care and maintenance. Over to you, Derek. Thank you, Lucas.