Trevali gets the cash to build

Trevali Mining’s (TV-T) ambition to build itself into a substantive zinc miner has taken another significant step forward.

The company has signed a deal that will give it access to US$60 million in debt financing, which should put it in a good position to be a supplier of the metal just as mines representing roughly 15% of global zinc production near their end of life.

While some of the money will go towards repaying current debt, the rest will go towards getting production out of its flagship zinc mine in the Bathurst Camp of New Brunswick.

RMB Resources, the financing division of the FirstRand Group of South Africa is supplying the financing, which breaks down into a US$30-million corporate facility repayable over a 5-year term bearing interest of LIBOR plus 5.5% per year and another US$30-million pre-paid gold and silver facility based upon spot prices at the time of closing.

FirstRand Group is one of the largest publicly traded financial service companies in South Africa. The deal comes with an arrangement fee of 4%, a break fee of USD$250,000. Both facilities can be pre-paid without penalty.

The injection of capital will let Trevali accelerate underground development at its Halfmile mine in New Brunswick and reactivate operations at the Caribou mill and mine complex— provided it finalizes the acquisition of Maple Minerals.

Back in May Trevali announced its intention to buy the privately held Maple for $23.8 million worth of Trevali stock.

Halfmile has indicated resources of 6.3 million tonnes grading 8.13% zinc, 0.22% copper, 2.58% lead and 30.78 grams silver per tonne. Caribou has measured and indicated resources of 3.8 million tones grading 7.5% zinc, 3.26% lead and 92 grams silver per tonne.

Halfmile along with the Caribou mine and mill all sit within the Bathurst Mining Camp of northern New Brunswick.

Trevali managed to push Halfmile into initial production earlier this year and is currently ramping up towards a planned production rate of 3,000 tonnes per day. That ore will feed the Caribou mill once the deal with Maple is finalized.

 The company is also nearing production at its Santander zinc-lead-silver mine the Central Peruvian Polymetallic Belt. Commissioning is scheduled for the fourth quarter with a ramp-up to 2,000 tonnes per day to follow shortly thereafter.

 In Toronto on September 26 Trevali shares were up a penny to $1.24 on roughly 700,000 shares traded.