"The recent acquisitions will help to position Trevali Mining Corp. (TV:TSX; TV:BVL; TREVF:OTCQX) as an intermediate producer with a strong base to build from," concluded Pierre Vaillancourt, analyst with Haywood Securities, in a Sept. 14 research report following a visit to the Rosh Pinah mine in Namibia and a meeting with management from the Perkoa mine in Burkina Faso. "Trevali, in our view, is better positioned as a smaller producer to add value to the mines."
Vaillancourt added that efforts to improve production at both mines are "in progress."
At Rosh Pinah, upgrades are being implemented, "which should be complete by year-end and are expected to increase throughput and lower costs," indicated Vaillancourt. "Most notably, changes to the flotation plant are expected to lead to recovery and concentrate grade increases."
At Perkoa, due to a change in mining contractor earlier in 2017, "the mine has improved production results," Vaillancourt noted. "It has higher stope flexibility, has successfully implemented cement rock fill and mining of secondary stopes and has higher equipment performance and capacity on site, which led to record production for August, 2017." To reduce costs, the "decision on a heavy fuel plant for Perkoa" should be made in October.
In terms of reserves at both operations long term, the "outlook is attractive," the analyst wrote, and drill programs at both properties continue.
At Rosh Pinah, there are the life-of-mine reserve of "7.6 years based on 5 Mt at 8.8% Zn" along with Measured and Indicated resources of 6.5 Mt at 8.2% Zn and a conceptual resource of 13 Mt at 10% Zn," Vaillancourt detailed.
At Perkoa, he added, which "is wide open," the high-grade deposit is open to depth" and "45 targets along the Perkoa mine horizon" have been identified.
Haywood Securities has a Buy rating and CA$2 per share price target on Trevali, whose stock is currently trading at CA$1.42 per share.
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