Resource World Magazine

A P R I L / M A Y 2 0 1 8 www.resourceworld.com 29 Glencore, in reintroducing zinc to the mar- ket, will be key to prolonging the zinc rally, by capping zinc prices close to current lev- els and keeping high-cost production from re-entering/flooding the market with sup- ply," Nagle said in a report. Global zinc production amounts to roughly 14 million tonnes annually. About 60% of that material is used for galvanized steel, rebar, autos and structural steel. New initiatives that are driving zinc con- sumption include agriculture (nutrient/ fertilizer), batteries, renewable power stor- age applications and fuel cells. Trevali Mining Corp. [TV-TSX, Lima, TREVF-OTCQX; 4T1-FSE] President and CEO, Mark Cruise, believes zinc prices could go higher this year. "I think there is the potential for it to spike as [the sup- ply of] concentrates is incredibly tight at the mine level," he said. Cruise expects the price to remain high for the balance of this year and start to soften in 2019. One reason for his optimism is the absence of a production response from China, the world's largest producer. When prices rise, Chinese mom and pop opera- tions respond by ramping up production. But due to environmental constraints some of those operations have been shut down for good. For the first time in more than a decade, Chinese zinc mine production was down 6% in 2017. In 2017, China imported 80,000 tonnes of zinc metal. "It is the first time that this has happened in history," Cruise said. The high zinc price is particularly wel- come at Trevali, which has the highest earnings leverage to zinc of any company in the global mining space. Trevali has four operating zinc mines in Peru, Canada, Namibia, and Burkina Faso. Companies like HudBay Minerals and Lundin Mining produce large quantities of zinc, but their earnings leverage is lower because zinc remains a much smaller por- tion of their overall metals production. Two of Trevali's zinc mines – Perkoa in Burkina Faso and Rosh Pina in Namibia – were acquired in August 2017 from Glencore, which has a 25% stake in Trevali and takes all of the company's production of concentrates. In 2018, Trevali expects to produce between 400-427 million pounds of zinc, 44-46 million pounds of lead, and 1.4-1.5 million ounces of silver, with operating costs of US $60-$66/tonne or US $0.67-$0.73/lb of zinc cash cost (net of by-products). It rarely rates a mention in travel magazines but Ireland ranks high up as a major centre for zinc exploration and development. Mining industry household names, including Sweden's Boliden AB [BOL-STO], Teck Resources, Glencore Ag of Switzerland, and Lundin Mining have either held or continue to hold zinc opera- tions in Ireland. In 2015, Ireland was the world's tenth largest zinc producing nation with 230,000 tonnes produced. Despite the closure of Vendanta Resources PLC's Lisheen zinc mine in January 2016, the surge in the zinc price to a 10-year high last year has sparked a fresh wave of exploration in the Emerald Isle, with companies like Group Eleven Resources Corp. [ZNG-TSXV] and Hannan Metals Ltd. [HAN-TSXV; HANNF-OTC; C8M-FSE] leading the charge. In the last three years, Group Eleven has assembled the largest zinc ground position in Ireland, comprising 99 prospecting licenses covering 3,200 km 2 across four main proj- ect areas. The properties are located within the established Irish Zinc District, which has been a source of zinc production since the 1960s and is currently home to some of Europe's largest zinc projects, including the Navan (Tara) Zinc-lead mine (Boliden), the Pallas Green deposit (Glencore) and the past producing Lisheen (Vendanta) and Galmoy (Lundin Mining) mines. "The good thing about Ireland is, its cheap exploration, and drilling tends to be cost effective," said Mark Cruise, who Trevali Mining's Caribou zinc-lead-silver mine in the Bathurst Mining Camp of northern New Brunswick, Photo courtesy Trevali Mining Corp. CONTROL OF CANADA'S TWO PREMIER ZINC CAMPS • Pine Point Camp, Northwest Territories (development-stage) • The Bathurst Mining Camp, New Brunswick (advanced-stage exploration) AGGRESSIVE PROJECT DEVELOPMENT STRATEGY • Combined 100,000 metre drill program at both camps • One of the largest drill campaigns within the base metals space at this moment MANAGEMENT AND BOARD KNOW-HOW AND PAST SUCCESS RATE • Ability to rapidly advance projects thanks to the synergy with the Osisko Group of companies; sharing experience, technical ability and access to capital WELL CAPITALIZED; NO DEBT WWW.OSISKOMETALS.COM TSX-V: OM ZINC

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