The Gold Report - Thu, Sep 14, 2017

Target Price Increased as Zinc Producer Closes Acquisition

Raymond James raised its target price on this base metals mining company and analyzed what the new asset could offer in terms of production.

Rosh Pinah Zinc Mine, Namibia

A Sept. 11 research report announced that following a site visit to Trevali Mining Corp.'s (TV:TSX; TV:BVL; TREVF:OTCQX) past-producing Rosh Pinah zinc mine in Namibia, Raymond James raised its "target price to CA$2/share from CA$1.80/share to reflect the longer mine life and higher throughput," wrote analyst Brian MacArthur.

Today, the Rosh Pinah mine could run for about 7.5 years solely on "current reserves of about 5Mt grading 8.8% zinc, 1.45% lead and 20.7 g/t silver" or for roughly 15 years were Measured and Indicated (M&I) and Inferred resources to be incorporated as well, MacArthur explained.

However, he emphasized that "drilling has the potential to add more resources," which "could increase the mine life and/or support higher production. . .future drilling is targeting higher grade zinc, and regionally we expect over 5 Mt could be added."

The opportunity to add resources is ripest in the WF3 zone of Rosh Pinah, he purported, "which has M&I resources of about 6.5 Mt at 8.2% zinc" and "where mining is shifting." MacArthur suggested that "the possibility exists to more than double that at higher grade through drilling expected to begin in 2018."

As for increased throughput, the analyst said, "We believe the mine infrastructure over time could (subject to development) support up to 3 Ktpd (especially if more resources are found in WP3 as we expect)." In comparison, "production has recently been closer to 1.8 Ktpd" and "capacity of the plant is about 2 Ktpd."

MacArthur suggested that increasing production at Rosh Pinah, however, requires "improving plant output," which Trevali plans to address in two phases.

Underway is the phase 1 "flotation upgrade, which should increase concentrate grade and recoveries as well as reduce penalties, for about $8M," detailed MacArthur. Phase 2, to come, is a "milling upgrade, which should allow throughout (even given harder ore) to exceed 2 Ktpd, for about another $7M."

In recapping the possibility for Rosh Pinah, MacArthur noted, "Assuming [Trevali] is successful with the drilling and can convert potential [ounces] at WP3, we believe for another $10–15M, production could be increased to about 3 Ktpd."

In its financial model, Raymond James revised its post-2019E production estimate for the mine "to 2.1 Ktpd but note the potential to go higher longer term," wrote MacArthur.

The research firm has an Outperform rating and updated CA$2 per share price target on Trevali, whose stock is currently trading at around CA$1.40 per share.

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Trevali Mining Corp. Streetwise Reports does not accept stock in exchange for its services. Click below for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. publishes interesting contributor articles in addition to its own content. We have not verified any of the above details.

Sign-up at (or for our Small Cap Stock Observer newsletter, and to set-up your own My Portfolio, My Watchlist & Alerts and News by Email preferences, or to post at our Bulletin Boards. Free!

Please note that nothing in this report should be taken as a recommendation in any way, and that everything from is subject to the terms of our Privacy Policy and Disclaimer.

comments powered by Disqus

Detailed Quote Portal

symbol lookup | (TSX add :ca)

Membership Privileges

  • Investors Guru Small Cap Stock Observer - newsletter emailed monthly!
  • Featured Stock Profiles - emailed on occasion!
  • News by Email - as it's released, according to your My Preferences!
  • My Portfolio - login to view or update your holdings, or have it emailed daily!
  • My Watchlist & Alerts - login to view or update your stock radar list, and set price triggers for email alerts!
  • Bulletin Boards - no need to request boards, just Quote it! Social Sign-on & Share your ideas, observations & trends!
  • Find it all! Find it Fast! Comprehensive stock research webpages. No more endless clicking!

Email: (see Privacy Policy)
Password: (4-15 characters)
Username: (4-15, BB posts etc)

unsubscribe anytime

Bookmark and Share

 Subscribe in a reader

Our Mobile Site