Canada’s Trevali Mining Corporation, listed on the TSX, has announced that it has entered into definitive agreements with Glencore and certain of its subsidiaries whereby it will acquire a portfolio of zinc assets from Glencore, including an 80 % interest in the Rosh Pinah mine in Namibia, a 90 % interest in the Perkoa mine in Burkina Faso and an effective 39 % interest in the Gergarub project in Namibia. The deal is worth approximately US$400 million.
Trevali says that the transaction will deliver high-quality, long-life zinc production to Trevali’s existing portfolio, improving asset and geographic diversification, and create a premier TSX-listed global zinc producing company. It will more than double Trevali’s current production scale to approximately 410 million payable lbs of annual zinc production,to position the company as a top-10 global zinc producer
The transaction builds on Trevali’s long-standing strategic relationship with Glencore, which will become a cornerstone investor (25 %) in Trevali
“The acquisition of Rosh Pinah and Perkoa is a historic event and unique opportunity for Trevali shareholders, and sets the stage for a multi-asset, low-cost global zinc producer,” comments Dr Mark Cruise, President and CEO of Trevali. “The assets provide strong upside to shareholders in the current strengthening macro-zinc environment through scale of production as well as an attractive package of exploration ground.”
Daniel Maté, Glencore’s Head of Zinc Marketing, adds that Trevali has a proven track record in the sector demonstrated by the success in opening up the Santander mine in Peru and the Caribou mine in Canada. “We have been working together as partners since their first mine was built and we share the same vision for the future growth of the business through value-creating organic and inorganic growth opportunities,” he says. “We are excited to form part of this unique global zinc vehicle, providing pure zinc exposure across a wide geographic footprint.”
The Rosh Pinah mine, an underground operation,is located in south-western Namibia, approximately 600 km south of Windhoek. It is owned 80,08 % by Glencore and 19,92 % by Namibian empowerment companies. It has been producing zinc since 1969 and is expected to produce for at least another14 years. Production guidance for 2017 is 100-105 million payable lbs of zinc at an AISC of US$0,68-0,72/lb.
The Perkoa zinc mine, also an underground operation, is located in the Sanguie Province of Burkina Faso, approximately 120 km west of the capital city of Ouagadougou. It is owned 90 % by Glencore and 10 % by the Government of Burkina Faso. It has been in production since 2013 and its remaining life is more than six years. It is expected to produce 165-170 million payable lbs of zinc at an AISC of US$0,83-0,87/lb in 2017.