Trevali finds more copper and gold at Stratmat in New Brunswick

Trevali Mining (TSX: TV; US-OTC: TREVF) is hitting the right notes with its drill programs in Peru and New Brunswick, discovering three zones over the last three months.

In June, the zinc-focused junior identified two zones of high-grade polymetallic mineralization at its Santander zinc–lead–silver underground mine in Peru.

The new Fatima North and Fatima South zones are near Santander’s Magistral Central deposit, one of the mine’s three deposits, and similar to the high-grade Rosa zone that it found in 2013.

In September the firm reported its third discovery: a copper–gold multi-lens zone at its Stratmat polymetallic project in New Brunswick. The zone is between the S1 and Main zones where there is little historic drilling, and starts at 360 metres below surface.

Trevali has drilled seven holes to test the zone, with results pending from two holes. The best intercepts received to date include: 15.4 metres grading 1.1% copper, 0.39 gram gold per tonne and 7.7 grams silver per tonne from the discovery hole; and 52.3 metres of 1.05% copper, 0.27 gram gold and 5.5 grams silver from a stepout hole.

All of the new intercepts are outside of Stratmat’s 5.5-million-tonne inferred resource of 6.1% zinc, 2.6% lead, 0.4% copper, 54 grams silver and 0.6 gram gold.

Trevali originally targeted the zone by compiling historic data and resuming exploration on the property, where it employed 3-D geological modelling and borehole geophysics.

“The fact that after approximately 50 years of property-wide exploration the Trevali exploration team, using the latest exploration technology, can model, predict, target and discover significant new blind massive sulphide mineralization is highly encouraging and bodes well for ongoing future discoveries at Stratmat and within the Bathurst mining camp,” Mark Cruise, the company’s president and CEO, said in a statement.

Cruise added that while the junior’s near-term goal is to restart mining operations at its Caribou zinc mine and mill in New Brunswick next year, it is looking for discoveries and ways to expand its resource base.

The new zone at Stratmat remains open for expansion, and the company is defining the zone’s limits.

Meanwhile in Peru, Trevali reported five drill holes at the Fatima zones in August. Intercepts include 10.4 metres of 6.8% zinc, 2.3% lead and 74.9 grams silver, and 13.8 metres of 5.7% zinc, 2.8% lead and 99.2 grams silver.

“Consistent with the drill results announced in June 2014, the highlighted assays returned grades that were significantly higher than the current grades for the existing indicated resource estimate at Santander of 6.3 million tonnes grading 3.6% zinc, 1.3% lead and 43 grams silver per tonne,” Raymond James analyst Adam Low writes.

The company is mining the upper portions of the Rosa zone in conjunction with Santander’s Magistral North deposit, and feeding the mill. “We expect Fatima zone material to hit the mill in the fourth quarter, as it is sequenced along with feed from Magistral Central,” company vice-president of investor relations Steve Stakiw explains.

Low says the Rosa and Fatima zones could account for 10–15% of the mill feed before October.

As a result, Low predicts the company will beat its 2014 production guidance of 42 million to 45 million lb. zinc, 15 million to 17 million lb. lead and 700,000 to 720,000 oz. silver for Santander.

Low has increased his target price for Trevali shares to $1.55 from $1.35, and has an “outperform” rating.