Trevali Mining Corp

Good day, everyone, and welcome to the Trivalli Mining Corporation first quarter 2022 financials and earnings conference call and webcast. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star one on your telephone keypad. You may press star one 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 Craney, Trivalli's Chief Financial Officer. You may begin your conference.

Thank you, Erica. 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. 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 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 March 31, 2022. 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 events 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 events. Moving to slide three, I will be presenting the Q1 results with Derek DePriest, our Chief Operating Officer. Note that our CEO, Rick Escrumbik, is on site at Percoa in Burkina Faso supporting the efforts on the ground as we are at the critical phase of the search and is unable to attend today's call. Moving to slide four, we announced on April 16th that we experienced a flooding event at our Percoa mine in Burkina Faso. In the early morning of April 16th, an unprecedented heavy rainfall event occurred. After flooding stopped, the water level in the mine settled at approximately level 520, which is 520 meters from surface. The total depth of the mine is to level 710. While most workers were able to successfully evacuate the mine, eight workers, all of whom were working below the 520 level, remain unaccounted for. We are continuing our search to locate the eight missing workers, and we are imminently close to reaching the refuge chamber located on level 570. It is an incredibly trying and difficult time for everyone involved, especially the families and communities. Management has been working with representatives from the Burkina Be, Minister of Mines and Quarries, and multiple national, regional, local authorities, as well as the mining community in Burkina Faso, in our search efforts, while crews have added additional pumping and piping capacity to facilitate dewatering and search efforts. We have mobilized a tremendous amount of equipment and expertise in our response, We are providing support to and are in regular communication with the families of the missing workers and community to ensure they have what they need in these difficult times. Production and cost guidance for Pocoa has been suspended, and we are conducting a detailed investigation process to fully understand the incident before we determine how best to safely proceed. I, on behalf of Tribali, thank everyone in the Tribali team, but particularly the group at Pocoa, our mining contractor Burncut, and the Burkina Faso government who continue to work tirelessly in the search efforts. Turning to slide five, we achieved payable production of 62.3 million pounds in the first quarter at a C1 cash cost of $1.06 per pound and an all-in sustaining cost of $1.22 per pound of zinc. We note that inflationary pressures will likely add to unit cost volatility this year. Production and cost performance by operation is shown in the table on the bottom right of the slide. At Roche, Pena, and Caribou, production guidance is unchanged. We report adjusted EBITDA of $41.4 million in Q1, which was helped along by a strong average zinc price of $1.70 per pound for the quarter. Net debt increased slightly to $81.8 million in the quarter versus $78 million in Q4, largely due to receivables, which increased by $43.7 million in the quarter, some of which settled subsequent to quarter end. As of April 30th, net debt has reduced to $62.7 million. I'm pleased to announce that we've executed a mandate agreement to arrange a senior secured project finance facility of up to $110 million with Standard Bank towards a potential financing package to refinance existing debt and RP 2.0 project funding. We have also received fulsome, non-binding expressions of interest from several streaming and royalty companies. Although these are clearly positive steps, the Pocoa flooding event has created some uncertainty around the amount and timing of financing. Lastly, the RP 2.0 EarlyWorks program is tracking well on cost and schedule. Now over to Derek for an update on our operations.

Thank you, Brendan. Turning to slide six for our operations update. At Rospina, payable production declined to 17.1 million pounds of zinc from 21.1 million pounds in quarter four. primarily due to a 13% decrease in air grade as per our guidance and aligned with the mine plan. The lower oil and sustaining cost of 80 cents per pound decreased 35% as a result of the lead shipment that was delayed from December into January due to the unavailability of ships at the time, reflecting a tight shipping market. We will discuss the early works program on the RP2.0 project in detail later on in the call. but we spent 1.8 million in the quarter on the expansion. As announced at the end of March, our consolidated proven and probable mineral reserves tonnage increased by 28% year over year, with Rospina contributing significantly to the increase. At Berkowa, we achieved a strong production result of 36.3 million pounds of zinc in the quarter due to higher grades. The all-in sustaining cost declined to $1.16 per pound from $1.36 per pound in the fourth quarter. As mentioned earlier, we have suspended production and cost guidance at Pakawa due to the flooding event which took place on April 16th. At Karibu, production volumes were negatively impacted in Q1 by low-stope availability as a result of the geotechnical challenges encountered in the second half of 2021. that impacted stope availability during the quarter. Caribou delivered 9 million pounds of zinc at an all-in sustaining cost of $2.27 per pound versus 10.2 million pounds at an all-in sustaining cost of $1.44 in Q4 2021. Productivity enhancements are underway. Improvement in development meters during Q1 are anticipated to translate to an increase in the number of available production stoves for the balance of 2022 which will result in a more stable production rate. While the first quarter was weaker than anticipated given the increase of available production steps, we reconfirm our production guidance of 60 to 68 million pounds of zinc with higher levels of production anticipated in the second half of the year. Putting production aside, we continue to advance studies for conventional mine life extension beyond 2022 in parallel with investigating the potential to apply FL Smith's rapid oxidative leach, abbreviated as ROLL technology at Caribou. A PEA is underway for the ROLL technology, and it's anticipated to be completed by the end of June 2022. Moving to slide 7, we are providing an update on Caribou. Recall that Caribou was restarted in Q1 2021 with a two-year production plan. The restart of the mine occurred on time, however production performance was challenged in the ramp-up and was further impacted in the second half of 2021 due to the temporary suspension of mining in a localised area because of poor ground conditions. Mine resequencing and productivity challenges persisted into Q4 2021. Limited oil availability in 2021 due to low equipment availability, development productivity, and additional ground control requirements have been factored into the schedule for 2022, with production expected to be higher in the second half of the year. To provide information to support mine planning, an extensive ground monitoring campaign was conducted in a quarter. A seismic system was installed that is now being used to proactively manage ground activity and testing has been conducted to identify alternate types of support. We have also adopted a mix of mining methods to optimize recovery and provide more mining flexibility and implemented just-in-time development whenever possible in parallel lenses to limit ground deformation over time. We have two studies underway regarding extending mine life at Karibu. One is looking at a conventional mine life extension, and another one is investigating the potential to use FL Smith's roll technology to unlock further value in the gold and copper that's lost in the conventional flotation process. A PEA on the roll technology is planned for completion by the end of the first half of this year. A decision on the conventional mine life extension is expected around the same time. Our guidance of 60 to 68 million pounds of payable zinc production at Caribou in 2022 remains unchanged. This compares to the 40.6 million pounds produced last year. Moving to slide 8, we are highlighting our early works program on the RP 2.0 expansions. In parallel with project financing initiatives, we continue to advance certain aspects of the $111 million RP2.0 expansion project in order to maintain the project schedule and mitigate the risks associated with the project as outlined in the feasibility study filed on August 17, 2021. The Early Works Program, which has a 2022 capital budget of $20 million, is expected to be financed from internal cash flows and progress at The end of Q1 included delivery of mobile equipment to site has commenced. Upgrade of the bulk power supply system in collaboration with Nampower has commenced. Tender adjudications and purchase orders have been placed for the selected long-lead items for the Pace backfill plant. Adjudication of tender for earthworks and civil construction is in the final stages. Engineering design for the processing plant upgrade has progressed to a state that allows us to commence with inquiry preparations for long-lead items. We would like to reiterate that the project is tracking well and is on time and on budget. With that, over to you, Brendan.