Trevali opens Halfmile mine in NB

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 mine near Bathurst, N.B.

The company began production in 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, Mark Cruise, the company’s president and CEO, explains in a statement. The company spent $16 million to build Halfmile, which employs 60 people, including members from the Mi’gmag First Nation and local communities. At full production, Halfmile could create 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 offtake agreement it signed with Trevali late in 2011.

That agreement is effective until Xstrata closes the mill, which is expected within three years.

Afterwards Trevali may buy the complex or build its own mill, the company’s corporate communications manager, Steve Stakiw, says 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.”

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

If all permits are in hand by 2013-2014, it plans to mine Halfmile’s sister deposit, Stratmat, at a rate of 2,000 tonnes a day.

Halfmile-Stratmat could run at the combined daily rate of 4,000 tonnes for another 17 years, based on its 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 resources 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, the company initiated a 5,000-metre resource conversion and expansion program to upgrade Stratmat’s resource. The results are expected before June.

By mid-year, Trevali plans to mine 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 capacity of 1.6 megawatts to 8.8 megawatts to sustain production at Santander. The mine is expected to consume 4 megawatts to 5 megawatts, and 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 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 expanded its land position around the past-producing Ruttan copper-zinc mine to 48.9-sq.-km, by staking five claims totalling 11.3 sq. km. The company will be undertaking desktop engineering studies to evaluate the resource and examine the potential of bringing it back online, Stakiw notes.

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