Trevali Mining Corporation
TSX : TV
TSX : TV.WT
OTCQX : TREVF
LMA : TV
FRANKFURT : 4TI

Trevali Mining Corporation

February 01, 2012 08:58 ET

Trevali Provides Santander Mine Project Status Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 1, 2012) - Trevali Mining Corporation ("Trevali" or the "Company") (TSX:TV)(TSX:TV.WT)(OTCQX:TREVF)(LMA:TV)(FRANKFURT:4TI) is pleased to provide a status update of its Santander mine project in Peru.

CONSTRUCTION SUMMARY

  • Experienced Peruvian project development and operations team in place.
  • Site and Mine Infrastructure advancing well - will be largely complete by end of Q1-2012.
  • Plant decommissioning advanced at Glencore's Rosaura mine site with transport of the 2,000-tonne-per-day mill and processing circuit currently underway. Commissioning of the 'new' Santander Plant is currently scheduled for Q2-Q3 2012.
    • The Company is evaluating methods to expedite commercial operations in consultation with Merit Consultants International Inc. and TWP Sudamerica, and under supervision of Trevali senior operations management.
  • Permitting on-track - Plant Construction permit anticipated to be in hand by February and the Mine Environmental Impact Permit (EIA) before the end of the First Quarter.
  • Underground development presently scheduled to commence in April 2012. Mine plan optimization and scheduling in progress.

PROCESSING PLANT

Plant Demobilization and Construction contract has been awarded to Cemprotech Ingeneria and commenced in Q4 of last year under supervision of the Glencore team. Approximately 40% of the Plant has been dismantled to date.

All equipment has undergone preventive maintenance and is being fully over-hauled (sand-blasted, anti-corrosion work and painted) prior to mobilization to Santander by GALEN, a specialist transportation company, supervised by RANSA Comercial S.A., a Logistics Operator. The first shipment of equipment to Santander occurred in late December 2011 and all equipment scheduled to be on site in February 2012.

Specific progress as follows:

  • Crusher's dismantled - 4,000tpd capacity.
  • Hoppers, vibrating feeders and ancillaries dismantled.
  • Primary and Secondary Mills empty of charges and currently being dismantled. Tertiary Mill dismantled and out.
  • Cell-House (Zn-Pb) dismantled and cells, impellors and pumps out.
  • Zn, Pb & Tailings thickeners in process of being X-rayed prior to disassembly.
  • Compressor house dismantled and compressors (3) and blowers (2) packed and ready to move.
  • Majority of piping removed.
  • New equipment - Zinc Cells, Filter, Rock-breaker cleared through Customs at Lima Port (Callao) and is on site at Santander.

MINE INFRASTRUCTURE

Mine infrastructure and development is advancing well - majority of works will be completed in the first quarter of 2012.

Key advances to date include:

  • Portal preparation complete (4.5-by-4.5-metres - capable of accommodating 30-tonne haul trucks) (Figure 1).
  • Closed Mine Water system (no surface water mixing) advanced.
  • Foundations and support for Compressor house, Lunch, Training Room, Lamp-Room, Offices and UG Fleet Maintenance shops in place.
  • Explosive Magazines (3) fully permitted.
  • Presently planning to commence underground development in April 2012.
  • Remaining civil-work will occur in Q1/2 2012 and includes; increased industrial water storage capacity that will be completed prior to 'dry' season; construction of 60,000-tonne coarse mineral-stock pile (one month's mill capacity) and temporary waste dumps and upgrade Tailings Management Facility to a closed system.

MINE POWER

New main substation at Santander Mine largely complete - ABB transformers and switches all delivered and installed.

  • Long-term Power Purchase Agreement (PPA) in place with SNP Power - which allows for an initial 2.4Mw of power.
  • Upon completion of the Tingo Hydro Power Plant, Santander will have access to approximately 15Mw of power from two different sources that should facilitate any potential production increases going forward.
  • Santander - Shelby Transmission Line (TL) - 75% of total project completion - estimated that line will be fully operational in Q1/Q2-2012.
  • Shelby Substation complete and transformer and switch-gear were delivered mid-December.

CAMP INFRASTRUCTURE

Accommodations, Mess facilities, ER and Medical Facilities, and Offices all complete.

PLANT BENEFICIATION CONSTRUCTION PERMIT

Positive notice received from the Ministry of Energy and Mines (MEM) in late November. Successfully completed the standard 30-day Notice Period and it is anticipated that final permit will be awarded within the following 30 days.

MINE PERMIT

Minor comments to the Mine EIA were received from MEM & Department of Agriculture in late November - early December and responses were lodged prior to year-end. Anticipating receipt of Mine EIA permit in late Q1-2012 based on latest feedback.

MINE MODEL / SCHEDULING

Optimization ongoing and is largely unchanged.

DEBT & WORKING CAPITAL FACILITIES

Debt discussions with West LB, a German financial institution have been terminated. The Company is presently in advanced discussions with several other financial institutions regarding provision of Working Capital facilities as it advances Santander to production.

GRANT OF OPTIONS

The Company further announces that, pursuant to its Stock Option and Stock Bonus Plan, it has granted incentive stock options to certain of its directors, officers and consultants to purchase up to an aggregate of 2,695,000 common shares in the capital stock of the Company. The options are exercisable on or before February 1, 2014 at a price of $1.19 per share.

ABOUT TREVALI MINING CORPORATION

Trevali has two advanced-stage polymetallic (zinc-lead-silver-copper) deposits in Canada and Peru - the Halfmile and Santander mine projects respectively. In Canada, Trevali owns the Halfmile Mine and Stratmat polymetallic deposit in the Bathurst Mining Camp of northern New Brunswick, and the past-producing Ruttan copper-zinc mine in northern Manitoba. Production from the Halfmile Mine commenced in early 2012 and will ramp up to a planned production rate of 2,000-tonnes-per-day.

In Peru, the Company has the Santander zinc-lead-silver mine project and the former-producing Huampar silver mine, both located in the Central Peruvian Polymetallic Belt. Mine commissioning is anticipated to commence at the Santander operation in mid- 2012 with ramp up to full 2,000-tonne-per-day production to follow shortly thereafter. Additionally through its wholly-owned subsidiary Trevali Renewable Energy Inc., Trevali is undertaking a significant upgrade of its wholly-owned Tingo run-of-river hydroelectric generating facility along with transmission line upgrades and extensions to allow, in addition to supplying power to the mining operation on the property, the potential sale of surplus power into the Peruvian National Energy Grid.

The common shares of Trevali are listed on the TSX (symbol TV), the OTCQX (symbol TREVF) and on the Lima Stock Exchange (symbol TV). Warrants to purchase common shares of Trevali are listed on the TSX (symbol TV.WT). For further details on Trevali, readers are referred to the Company's web site (www.trevali.com) and to Canadian regulatory filings on SEDAR at www.sedar.com.

On Behalf of the Board of Directors of TREVALI MINING CORPORATION

Mark D. Cruise, President

This news release contains "forward-looking statements" within the meaning of the United States private securities litigation reform act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results and the company does not intend, and does not assume any obligation to, update such statements containing the forward-looking information. Such forward-looking statements and information include, but are not limited to statements as to: the accuracy of estimated mineral reserves and resources, anticipated results of future exploration, and forecast future metal prices, anticipated results of future electrical sales and expectations that environmental, permitting, legal, title, taxation, socio-economic, political, marketing or other issues will not materially affect estimates of mineral reserves. These statements reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies.

These statements reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors, both known and unknown, could cause actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements contained in this news release and the company has made assumptions and estimates based on or related to many of these factors.

Such factors include, without limitation: fluctuations in spot and forward markets for silver, zinc, base metals and certain other commodities (such as natural gas, fuel oil and electricity); fluctuations in currency markets (such as the Peruvian sol versus the U.S. dollar); risks related to the technological and operational nature of the Company's business; changes in national and local government, legislation, taxation, controls or regulations and political or economic developments in Canada, the United States, Peru or other countries where the Company may carry on business in the future; risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological or structural formations, pressures, cave-ins and flooding); risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards; employee relations; relationships with and claims by local communities and indigenous populations; availability and increasing costs associated with mining inputs and labour; the speculative nature of mineral exploration and development, including the risks of obtaining necessary licenses and permits and the presence of laws and regulations that may impose restrictions on mining,; diminishing quantities or grades of mineral reserves as properties are mined; global financial conditions; business opportunities that may be presented to, or pursued by, the Company; the Company's ability to complete and successfully integrate acquisitions and to mitigate other business combination risks; challenges to, or difficulty in maintaining, the Company's title to properties and continued ownership thereof; the actual results of current exploration activities, conclusions of economic evaluations, and changes in project parameters to deal with unanticipated economic or other factors; increased competition in the mining industry for properties, equipment, qualified personnel, and their costs. Investors are cautioned against attributing undue certainty or reliance on forward-looking statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements or information, other than as required by applicable law.

Trevali's production plans at Halfmile-Stratmat and Santander are based only on Indicated and Inferred Mineral Resources and not Mineral Reserves and do not have demonstrated economic viability. Inferred Mineral Resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is therefore no certainty that the conclusions of the production plans and Preliminary Economic Assessment (PEA) will be realized. Additionally where Trevali discusses exploration/expansion potential, any potential quantity and grade is conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.

To view the photo associated with this press release, please visit the following link: http://media3.marketwire.com/docs/120201_Trevali.pdf

The TSX has not approved or disapproved of the contents of this news release.

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