Trevali Arranging US$20M Loan For Peruvian Hydro Project

VANCOUVER– Banco Internacional del Peru (Interbank) and law firm Estudio Eschecopar are helping Trevali Resources (TV-C, TREVF-O) arrange a US$20-million debt facility through Interbank’s credit committee.

Trevali plans on using the loan to pay for an upgrade of its Tingo hydroelectric project in Peru, the impetus for which is to provide electricity to Trevali’s Santander poly-metallic project, about 200 km northeast of Lima.

It would use the funds to increase generating capacity to 8.8 megawatts from 1.2 megawatts, improve transmission lines between Tingo and Santander, buy out Tingo water rights and infrastructure (of which it already owns about 91%) from Compania Minerales de Santander, and, finally, to connect Tingo to the national energy grid.

Addressing the latter point, Trevali president and CEO Mark Cruise noted in a statement that not only could the upgraded Tingo provide sufficient power to run a mine at Santander but that it could also sell excess electricity.

At the past-producing Santander project, Trevali has outlined significant silver, lead, zinc and copper mineralization and is in the midst of calculating a resource estimate. It has also begun refurbishing existing infrastructure, which now includes a 200-man camp, mills and crushers.

In recent months, an engineering firm esimated it would cost about $3 million to refurbish the existing Santander mill to an initial 1,500- tonne-per-day capacity.

In 2008, Trevali concentrated its drills on three silver-lead-zinc mineralized mantos known as the Magistral zones, located a few kilo-metres northwest of a previously mined orebody. The three zones are called Magistral Norte, Sur and Central.

At Magistral Norte, the company recently intersected a new near-surface mineralized zone. Hole 98 hit 13.6 metres grading 54.76 grams silver per tonne, 4.2% lead, 4.37% zinc and 0.19% copper starting about 33 metres down-hole.

Such grades are similar to those encountered in drill holes throughout Magistral Norte and Central zones. Magistral Sur tends to be richer in base metals than the other two zones.

The company recently announced that it has discovered and reassayed historic core from the Puajanca target at Santander. The results, which included a 105.4-metre section of 24.3 grams silver per tonne, 0.29% lead and 1.35% zinc, confirm Puajanca as a fourth mineralized body at the project.

Trevali says that over about 25 years, historic production at Santander totalled about 8 million tonnes grading about 60 grams silver, at least 7% zinc, between 1% and 4% lead and included additional copper credits.

On news of the arrangement, Trevali’s share price jumped 9¢ to close at 70¢. At presstime, the stock, which has traded in a 12-month range of 45.5¢-$2.57, was trading at 83¢. Plans are to attain a TSX listing this year.