Trevali Mining Corp

Good day, everyone, and welcome to the Trivalli Mining Corporation third quarter 2021 financials and earnings conference call and webcast. After the speaker 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 Creaney, Tribali's Chief Financial Officer. Thank you, sir. You may begin.

Thank you, April, and good day, everyone, and thanks for taking the time to join the call this morning. Before we get started, I would like to direct your attention to our forward-looking language on slide two. The 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 being different from the estimates contained in our forward-looking statements, please refer to our latest MD&A filed on CDAR for the period ended September 30, 2021. I would 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 events section and the corporate presentation section of Trivali's website under the investors tab. The link to our live webcast is also on Trivali's website under events. Moving to slide three, our main presenters today are Rickus Grimby, Trivali's president and CEO, and he will be accompanied by Derek Dupree, Trivali's chief technical officer, and myself as Trivali's chief financial officer. Rickus, over to you.

Thank you Brendan, and starting on slide four, our safety records saw an increase in recordable injuries However, the severity of injuries declined. There were 13 recordable injuries reported, with 70% of these injuries being medical treatment cases, which resulted in an immediate return to work. Importantly, high potential incidents continued to decline in 2021, with a 35% reduction year over year. The third quarter was marked by a relatively stable zinc price, with the metal price averaging $1.36 a pound. We achieved production of 82.4 million payable pounds of zinc at a C1 cash cost of $0.84 and an all-in sustaining cost of $0.99 per pound. Rospina and Pocoa delivered another strong performance, both increasing their production over the previous quarter. Gabo contributed positive EBITDA, increasing from a previous quarter, but production was negatively impacted due to poor ground conditions localised to a specific area in the mine. Work to mitigate the impact and allow for further flexibility in the mine plan has progressed well, and we will speak to this in more detail later in the presentation. Santander was also impacted early in the quarter due to lower production caused by mobilisation of a new mining contractor. Adjusted EBITDA for the company was at $20.5 million and was impacted by decreased production during the quarter and the timing of sales due to shipping delays at Pacoa and Rospina. We've decreased our net debt by $27 million to $82 million, which is driven largely by the collection of receivables that built up at the end of the second quarter. 2021 production guidance is being reconfirmed at the lower end of the range and cost guidance at the higher end of the range. Guidance is expected to be adjusted for the sale of Santander post-closing of the transaction. Since the third quarter ended, the zinc price has been extremely volatile. The price increased rapidly to a high of $1.74 a pound in mid-October and has since receded to about $1.50 a pound, where there is fundamental price support. We are well positioned to take advantage of the opportunities provided by the positive momentum in the zinc market. Turning to slide five, we announced the sale of Santander Mine to Cerro de Pasco Resources on November the 8th. This divestiture of Santander is consistent with our disciplined capital allocation strategy of focusing on corporate debt reduction and preparing to make an investment decision on RP2.0 expansion project at Roche Prieta. We thank the team at Santander for their commitment and dedication and we wish them continued success as part of Cerro de Pasco. We will work closely with the team to ensure a smooth transition. Total consideration to Trevali for the sale of Santander is 10 million shares in Cerro de Pasco, resources subject to certain escrow provisions. We will also receive $1 million Canadian in cash, subject to adjustments to the extent that there is more or less than $7.5 million of working capital remaining in Santander at closing. Trevali will also receive a net smell to return royalty equal to 1% on the areas of the Santander mines outside of the current defined resources at Magistral and Santander pipe deposits. Lastly, a contingent payment of $2.5 million payable to Trevali in the event that the LME average zinc price for 2022 is equal to or greater than $1.30 per pound. We expect the transaction to close in a fourth quarter. In addition to the sale, Trevalier has provided the TSX notice of the intent to proceed with share consolidation on a 10 to 1 basis, reducing the number of issued and outstanding shares from 989 million shares to 98.9 million shares. The company anticipates the completion of the consolidation by the 1st of December 2021. Trevalier will continue to trade on the TSX and all other exchanges. At Pakoa, payable zinc production for Q3 2021 was £40.9 million, a 3% increase over the Q2 due to a higher zinc head grade and partially offset by lower milk throughput caused by lower all-stock fire levels. Mine production was impacted by underground development due to equipment and operator availability. Full-year guidance remains unchanged. At Ras Pena, the operation continued with a very strong throughput this quarter, producing 19.7 million pounds of payable zinc at an all-expanding cost of 88 cents per pound. Our ongoing focus on execution at Raspina is continuing to bear fruit, with higher throughput rates expected for the remainder of the year. A smaller lead shipment in Q3 reduced the by-product credits relative to the last quarter, which led to a higher unit cost. Within the quarter, we also published positive results for the IP 2.0 feasibility study, which we will cover in more detail later in the presentation. At Santander, zinc production was 8.2 million pounds, reduced at an all-in sustaining cost of $1.36 a pound. Production was impacted due to a slow ramp-up of the mining activities following the mobilization of a new mine contractor, as well as lower zinc head grades due to lower grade stoves being mined. Mine production rates have recovered towards the end of the quarter, with target productivities being met. As previously mentioned, we've announced the divestment of Santander, which we expect to close in the fourth quarter. At Caribou, the operation produced 13.5 million pounds of zinc at an all-in-sustaining cost of $1.10 per pound. Caribou was impacted by temporary suspension of mining in a localized area where we experienced poor ground conditions, which we will speak to in further detail on the next slide. We also continue to study the potential to extend Caribou's mine life beyond the initial two-year restart plan through conventional mining and milling methods. And in parallel, we are also continuing the rapid oxidative leach project with FL Schmidt. I move to Derek to provide more detail in operational and other growth projects.