Trevali Resources Corp.
FRANKFURT : 4TI
TSX : TV
OTCQX : TREVF

Trevali Resources Corp.

January 05, 2011 10:01 ET

Trevali Sampling Expands High-Grade Silver Mineralization at Puajanca North Target on Santander Zinc-Lead-Silver Mine Project in Peru

1.45 km of aggregate veining averaging 1 metre wide at 5.3 oz/ton silver (182.7 g/t), 14.3% lead and 2.0% zinc

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 5, 2011) - Trevali Resources Corp. ("Trevali" or the "Company") (TSX:TV)(OTCQX:TREVF)(FRANKFURT:4TI) is pleased to announce that detailed, systematic surface channel sampling of the high priority Puajanca North target has significantly increased the size of the silver-rich target. Structurally controlled vein and stockwork silver mineralization has been mapped and sampled over an area of approximately 400 metres N-S and 330 metres E-W. Mineralization remains open for expansion. 

High-grade silver structures are interpreted to potentially represent the upper-most levels of a significant polymetallic mineral system similar to the three recently discovered Magistral deposits and thus a compelling, high priority target. Aggressive follow-up is scheduled for early 2011 as part of the Company's 10,000-metre exploration and resource definition drill program.

Key highlights:

  • Individual samples include 1.2 metres of 39.9 oz/T (1369.1 g/t) silver, 83% lead and 18.4% zinc.
  • Individual veins include 180m-long structure averaging 515.4 g/t (15.0 oz/T) silver, 33.95% lead and 2.02% zinc.
  • Excellent potential to identify new structures in addition to expanding known structures alongstrike and down dip extensions.

"Given our 100% success record whereby four exploration targets have been drill tested resulting in four new polymetallic deposits, that remain open for expansion; we are confident that Puajanca North has the potential to become a significant mineralized body," stated Dr. Mark Cruise, Trevali's President and CEO. "With the current robust silver price, which is forecast to climb higher in 2011, we are obviously very excited to get the drill rigs turning at the silver-rich Puajanca North target."

TARGET SUMMARY

Structurally-controlled mineralization at Puajanca North is spatially associated with a robust, 'productive' alteration assemblage, polymetallic replacement mineralization at Puajanca South (that remains open), the productive Magistral North 'feeder' zone and a very large geophysical anomaly (Figure 1: http://media3.marketwire.com/docs/t1c.pdf). 

In this regard, this zone shares many similarities with the three recently discovered Magistral deposits prior to drill-testing. Metal ratios (lead values significantly higher than zinc) and alteration assemblages in the area are interpreted to indicate that silver mineralized structures in the Puajanca North Zone are located in the uppermost portions of a 'fertile' and well preserved polymetallic mineralizing system. Diamond drilling will test this concept during the forthcoming 10,000-metre 2011 exploration and resource expansion campaign.

TABLE 1 - Summary assay results – Puajanca North Structures ordered north to south
Structure   Average Width (m)   Length (m)   Ag g/t - (oz/T)   Pb %   Zn %   Number of Samples
Fault-13   1.0   180.0   515.4 - (15.0)   33.95   2.02   12
Relay-1a4   0.8   140.0   54.51 - (1.6)   4.78   3.57   16
Incl -   0.3   100.97 - (2.9)   8.78   6.90   7
Fault-23   1.1   350.0   165.92 - (4.8)   14.28   2.51   35
Incl -   0.5   302.73 - (8.8)   26.45   3.52   18
Relay-2a   1.1   90.0   266.53 - (7.8)   22.34   0.60   7
Incl -   0.8   348.35 - (10.2)   29.20   0.77   6
Relay-2b4   0.8   130.0   136.47 - (4.0)   10.11   1.66   13
Incl -   0.4   262.38 - (7.7)   19.05   2.33   8
Fault-33   1.2   430.0   119.12 - (3.5)   9.92   2.04   40
Incl -   0.7   193.08 - (5.6)   16.05   3.00   29
Relay-3a1   1.0   50.0   198.15 - (5.8)   17.16   1.24   7
Incl -   0.7   232.52 - (6.8)   20.63   0.84   6
Relay-3b   1.0   80.0   96.37 - (2.8)   8.97   0.83   7
Incl -   0.6   148.63 - (4.3)   13.92   0.58   5
3 Superscript numbers indicate number of samples included from previous November 02, 2009 News Release.
Spacing between individual channels along a structure is approximately 20m, see Figure 2.

RESULTS IN DETAIL

The Puajanca North Zone is located 2.5 kilometres NE of the Santander Plant site and 1 kilometre NNE of the Magistral North deposit (Figure 1: http://media3.marketwire.com/docs/t1c.pdf).

PUAJANCA NORTH

The principle vein-filled faults were systematically channel-sampled at approximately 20m intervals. Each channel was oriented perpendicular to the principal structure and was comprised of several discrete samples traversing from foot-wall through the structure and into the hanging-wall. Additional channel sampling was carried out along networks of relay mesh-structures where exposure permitted (Figure 2: http://media3.marketwire.com/docs/t2c.pdf).

Mineralized structures strike NE to E-W and have sub-vertical dips. Structures range in width from approximately 0.3m to 1.2m and typically host additional mineralization within hanging- and foot-wall damage zones. Mineralization is dominated by argentiferous galena with lesser marmatite and trace chalcopyrite (Figure 3: http://media3.marketwire.com/docs/t3c.pdf).

The core of each structure contains the highest silver and lead grades with generally lower zinc values, while the damage zones on the margins are typically higher in zinc. Results from the sampling program demonstrate good continuity of high grade mineralization; all structures remain open along strike and at depth. 

Metal ratios (lead values significantly higher than zinc) and alteration assemblages in the area are interpreted to indicate that structures in the Puajanca North Zone are located in the uppermost portions of a 'fertile' and well preserved polymetallic mineralizing system. Consequently Puajanca may contain significant depth potential with opportunity to intersect larger replacement bodies. This interpretation (of the presence of a large hydrothermal system) is further supported by the observation that mineralization is spatially associated with, and sits above, the southeastern margin of a very large, approximately 1km2, geophysical anomaly (Figure 1: http://media3.marketwire.com/docs/t1c.pdf). All mineralization discovered to-date on the property has a strong geophysical response.

The upcoming 2011 exploration drill program will target down dip and along strike extensions of these high grade veins as well as potential replacement bodies at depth. The Company cautions that the Puajanca North target is a relatively early stage exploration target and that there is no guarantee that the forth coming planned exploration will result in significant polymetallic intercepts. 

SANTANDER PROJECT

The Santander zinc-lead-silver mine project is located approximately 215 km by road from Lima, in the western extent of Peru's Central Polymetallic Belt, globally a major producer of silver, zinc and lead. Site infrastructure includes a fully refurbished 200-man camp and the Tingo hydroelectric power-station located 17 km down-valley to the west. The Company commenced exploration at Santander in December 2007 discovering four new high-grade silver-lead-zinc replacement and massive sulphide deposits to date.  Mineralization remains open in all three Magistral deposits, the Puajanca zone and the past-producing Santander Pipe, and numerous high-priority targets remain to be tested.

A recently completed independent resource estimate update by Golder Associates reviews a total Indicated Mineral Resource of 5.858 million tonnes with an average grade of 3.86% zinc, 1.35% lead, 44 g/t silver and 0.08% copper (using a 3% ZnEQ* cut-off grade) for an estimated in-situ metal inventory of 498 million lbs. zinc, 174 million lbs. lead, 8.25 million oz. silver and 9.7 million lbs. copper. An additional Inferred Mineral Resource of 4.806 million tonnes grading 5.08% zinc, 0.44% lead, 21 g/t silver and 0.07% copper for an estimated in-situ metal inventory of 538 million lbs. zinc, 46 million lbs. lead, 3.19 million oz. silver and 7.8 million lbs. copper using the same cut-off grade.

Additionally, a further 100 million contained lbs. of zinc are estimated to be present in the 1,656,000 indicated tonnes grading at 2.74% zinc (using a 2.0% zinc cut-off grade) at the Santander Tailings Impoundment.

*ZnEQ = ((Ag Price(g) x Ag Recovery x Ag Grade) + (Pb Price(t) x Pb Recovery x (Pb Grade(%)/100)+(Zn Price(t) x Zn Recovery x (Zn Grade(%)/100)))/Zn Price(t). Golder utilized the three year rolling average price for all three metals. Price for silver is ($14.90/oz) and that for Pb ($2,174), Zn ($2,079) and Cu ($6,504) is per tonne. A recovery of 85% was applied to Ag, 90% for Pb, 85% for Zn and 60% for Cu for calculating the ZnEQ formula. The pounds metal are in-situ and have not had any mining factors applied to them.

Qualified Person and Quality Control/Quality Assurance

EurGeol Dr. Mark D. Cruise, Trevali's President and CEO and a qualified person as defined by National Instrument 43-101, has supervised the preparation of the scientific and technical information that forms the basis for this news release. Dr. Cruise is not independent of the Company, as he is an officer and shareholder.

The work programs at Santander were designed by, and are supervised by, Mark D. Cruise, President & CEO of Trevali, and Tim Kingsley (Senior Geologist), who together are responsible for all aspects of the work, including the quality control/quality assurance program. On-site personnel at the project rigorously collect and track samples which are then security sealed and shipped to ACME Laboratories, Vancouver, for assay. ACME's quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025: 1999. Analytical accuracy and precision are monitored by the analysis of reagent blanks, reference material and replicate samples. Quality control is further assured by the use of international and in-house standards. Blind certified reference material is inserted at regular intervals into the sample sequence by Trevali personnel in order to independently assess analytical accuracy. Finally, representative blind duplicate samples are routinely forwarded to ACME and an ISO compliant third party laboratory for additional quality control.

ABOUT TREVALI RESOURCES CORP.

The Company in conjunction with its partner, Glencore International A.G., has entered into a definitive development agreement for the Santander zinc-lead-silver project in west-central Peru that will see Glencore provide and operate on the property, a 2,000-tonne-per-day concentrate plant, undertake mining operations on a 'contractor/toll basis' and enter into a long-term concentrate offtake agreement with the Company for 100% of the Santander project's production at benchmark terms.

Additionally, through its wholly owned subsidiary Trevali Renewable Energy Inc., the Company is undertaking a significant upgrade of the 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.

Trevali has also recently entered into a Letter of Intent with Kria Resources Ltd. (Kria) to complete a business combination whereby Trevali will acquire all of the issued and outstanding common shares of Kria and Kria will become a wholly owned subsidiary of Trevali (see News Release NR10-18 for details).

The common shares of the Company are currently listed on the TSX (symbol TV). For further details on the Company, 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 RESOURCES CORP.

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.

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