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Trevali starting to extract ore from Santander's Rosa zone

Bnamericas Published: Monday, August 18, 2014

Vancouver-based Trevali Mining has started extracting ore from a new, higher grade area of its Santander zinc-lead-silver mine in Peru.

Ore from the mine's Rosa zone will account for 10-15% of mill feed by late third quarter, CEO Mark Cruise said Friday in a conference call to discuss second quarter financial results. Ore grades will rise to 2-2.5% lead from 1.2-1.5% and silver grades are expected to rise to 2-3oz/t from 1.5oz/t, he said.

An optimization program at Santander aims to trim costs by a further 10% by the end of the year, Cruise said. Contractor Andean Drilling is working on deep drilling at the mine, he said. Two drill rigs are working on a 5,000m drill program at the Fatima and Rosa deposits and extensions to the Magistral South deposit.

"We will start to see pretty significant mineralization being delivered to the mill from the Rosa zone in the second half of the year," Cruise said. "This will result in increased lead-silver mineralization being delivered to the mill as well."

The company, which is also building the Caribou mine in Canada, posted a Cdn$4.5mn loss (US$4.1mn) in the second quarter on Cdn$19.9mn in sales due to a non-recurring item related to the sale of its Tingo hydroelectric plant in July.

Trevali sold 11.8Mlb payable zinc, 4.2Mlb payable lead and 180,795oz payable silver to partner Glencore in the quarter. The company aims to produce 42-45Mlb zinc, 15-17Mlb lead and 700,000-720,000oz silver this year.

Santander is Peru's first new zinc mine since Votorantim Metais unit Milpo started up the Cerro Lindo operation in 2005. Peru is the world's third largest zinc miner.

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