Trevali opens the Halfmile mine

Trevali Mining (tv-t) has kicked off the New Year by transitioning from a development-stage company to a producer by starting up the Halfmile polymetallic massive sulphide project near Bathurst, N.B.  

The company began production from the mine’s upper levels on Jan. 6, pushing its shares up 15% to close at $1.09. The mine should ramp up to 2,000 tonnes per day by March.

Trevali’s development team brought the zinc-lead-silver-copper mine online under budget and within nine months, the company’s president and CEO, Mark Cruise, explained in a statement. The company spent $16 million to build Halfmile, which currently employs 60 people, including members from the Mi’gmag First Nation and local communities. At full production, Halfmile should create a total of 130 to 140 full-time positions.

The company will use Xstrata‘s (xta-l) Brunswick 12 concentrate plant to stockpile, treat and process the ore. Xstrata will buy all of Halfmile’s production at the London Metal Exchange’s average pricing as part of a toll milling and off-take agreement it signed with Trevali last fall.

That agreement is effective until Xstrata closes the mill, a move that is expected within the next two to three years. 

After which Trevali may buy the complex or build its own mill, says the company’s corporate communications manager, Steve Stakiw, in an email.

“While Trevali would certainly be interested in evaluating the opportunity to acquire the Brunswick 12 processing facility once Xstrata’s mining operations cease, we are moving forward with a full feasibility study on developing our own stand-alone mill facility, and are evaluating other opportunities.”

Currently, the company is adding flexibility to the Halfmile deposit by deploying an underground development crew to deepen a ramp to access the mine’s lower levels.

By 2013/2014 if all permits are in hand, it plans to start mining Halfmile’s sister deposit, Stratmat, at a rate of 2,000 tonnes a day. 

Halfmile-Stratmat should run at the combined daily rate of 4,000 tonnes for another 17 years based on its current resources.

Halfmile has 6.2 million indicated tonnes grading 8.13% zinc, 2.58% lead, 0.22% copper and 30.78 grams silver per tonne, plus another 6 million tonnes in inferred at lower grades. The Stratmat deposit has 5.5 million inferred tonnes at 6.11% zinc, 2.59% lead, 0.40% copper and 54.21 grams silver.

In October 2011, the company initiated a 5,000-metre resource conversion and expansion program to upgrade Stratmat’s resource. The results should be out in the second quarter.

By mid-year, Trevali plans to start mining the 2,000-tonne-per-day Santander zinc-lead-silver project in Peru.

Some 17 km from the mine, the company is upgrading the Tingo run-of-river hydroelectric plant from its current capacity of 1.6 megawatts to 8.8 megawatts to sustain production at Santander. As the mine is expected to consume about 4 to 5 megawatts, Trevali plans to sell the excess power to third parties using the Peruvian national energy grid. The upgrade should be completed by mid-2013.

Trevali’s other Peruvian asset is the past-producing Huampar silver mine, sitting 80 km from Santander. Huampar hosts a historic, non-compliant reserve of 874,412 tonnes grading 209 grams silver, 1.3 grams gold, 3.31% lead and 3.63% zinc along with minor copper mineralization.

Stakiw says the company is working on permitting a drill program at Huampar, and has refurbished a 60-man camp.

In northern Manitoba, Trevali has recently expanded its land position around the past-producing Ruttan copper-zinc mine to 48.9-sq.-km, by staking five additional claims totaling 11.3-sq.-km. The company will be undertaking desktop engineering studies to evaluate the current resource and examine the potential of bringing it back online, Stakiw notes. 

Ruttan previously operated in 1973-2002, and has a compliant inferred resource of 19.75 million tonnes of 1.17% copper and 1.47% zinc.