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Santander Mine

Technical Report


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As of February 1, 2014, Trevali Mining Corporation has achieved metallurgical plant commercial production at its Santander Zinc-Lead-Silver Mine in west-central Peru. The mill is operating at full nameplate throughput of 2,000-tonnes-per-day and the operation is producing zinc and lead-silver concentrates.

Santander Mill start-up commenced in August 2013 and from September through to January 31, 2014, the plant has delivered steady improvements to mill performance. As of the end of January 2014, the mill has processed approximately 310,000 tonnes of feed to produce approximately 22,000 tonnes of zinc concentrates and 7,000 tonnes of lead-silver concentrates.

2014 Santander production guidance in payable metals is approximately:
Zinc -- 42-45 million pounds
Lead -- 15-17 million pounds
Silver -- 700,000 to 720,000 ounces

Mill throughput for 2014 is estimated at approximately 670,000 to 690,000 tonnes with average head grades estimated at 4.0% to 4.2% zinc, 1.5% to 1.7% lead and 1.4 oz/ton to 1.6 oz/ton silver.

Underground development commenced in mid-2012 with more than seven kilometres of 5-metre-by-4-metre ramp and decline completed as of Q1-2014. Three portals have been developed to ultimately accommodate a possible mining capacity of plus-4,000 tpd from the three Magistral deposits via high-speed, one-way trackless mining.

The three Magistral deposits (North, Central and South), form the basis of the current NI43-101 mineral resource estimates of 6,264,000 indicated tonnes grading 3.62% Zn, 1.30% Pb and 43 g/t Ag (for a contained metal inventory of 500 million lbs. zinc, 180 million lbs. lead and 8.7 million oz. silver) and an additional inferred resource of 13,845,000 tonnes at 4.62% Zn, 0.40% Pb and 21 g/t Ag (for a contained metal inventory of 1.4 billion lbs. zinc, 121 million lbs. lead and 9.3 million oz. silver). The resource estimate is based on 190 drill holes (42,000.8 metres), 109 sawn channel samples (1,819.56 metres) and 10,585 geochemical assays, in addition to 318 historic drill holes (18,507.29 metres), 947 historic channel samples (5,245.55 metres) and 7,812 historic assays for the Santander Pipe deposit. The resource estimate was conducted by and under the supervision of Greg Greenough, PGeo, an independent qualified person and senior resource geologist at Golder Associates Ltd. of Mississauga, Canada, and utilized a 3-per-cent Zn-equivalent cut-off grade -- which is the nominal base case estimated grade of material that can be mined and processed considering all applicable costs. The mineral resources identified in the associated tables are based on ordinary-kriged (OK) capped values. (Please review Disclaimer)

Mining and mineral processing operations at Trevali's 100%-controlled Santander Mine are undertaken with development partner Glencore Xstrata plc that has provided the 2,000-tonne-per-day mill/concentrate plant and also serve as contract mill operator and contract miner, and report to senior Trevali personnel. Glencore has entered into a life-of-mine concentrate offtake agreement with Trevali for 100% of Santander project production (at 2,000tpd) at International Benchmark (market price) terms.

The Company's production decision is 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 decision 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.

Location

The Property is located on the western edge of the Altiplano, which forms the Western Cordillera of the Andes, in the Central Peruvian Polymetallic Belt.

Situated in Lima Department, Peru, approximately 200 northeast of Lima, the Santander Mine enjoys ease of accessibility with regional highway/road networks.

Ownership

The Company, through its Peruvian subsidiary, Trevali Peru S.A.C., has acquired from Compaņia Minerales Santander S.A.C. ("Santander") of Lima, Peru, owners of the Santander Property, the exclusive right for a period of 50 years (with an automatic 50-year extension) to engage in exploration, development, exploitation, processing and commercialization activities at the Santander Property. The agreement also allows for the exclusive use of the existing infrastructure as well as the lease of the Tingo hydroelectric plant.

In addition, the Company, through its Peruvian subsidiary, Trevali Peru S.A.C., has effectively acquired approximately 97% of the current outstanding qualified liabilities of Santander.
(Note: remaining ownership held by combination of Peruvian tax authorities and minor creditors)

Infrastructure

Infrastructure includes a 400-person camp plus associated support facilities. Glencore Xstrata, as part of the formal agreement, has provided and will operate (on a contract basis) the 2,000-tonne-per-day concentrate plant to produce zinc and lead-silver concentrates. The mine site is connected to the Peruvian National Energy Grid in addition to the Tingo run-of-river hydroelectric generating plant.

Property Background

The former Santander Mine is classified as a polymetallic High Temperature Carbonate (HTC) or Carbonate Replacement Deposit (CRD). Modern mining activities commenced on the principal Santander Pipe from 1958 until 1991 to an approximate depth of 480 metres. Approximately 8 million tonnes of mineralized material were mined historically grading +7% zinc, 1- 4% lead and 60 g/t silver with additional copper credits. Due to a combination of hyper-inflation and low metal prices, mining ceased in approximately 11% zinc mineralization at 480-500 metres below surface. Mineralization remains open at depth with reported zinc grades of 11% in multiple replacement or manto bodies.

Typically, such Carbonate Replacement Deposits (CRDs) can comprise multiple lens and have the potential to form significant mining camps.

The 4,455-hectare (44 km2) property contains numerous outcropping polymetallic mineralized bodies (Magistral North, Central, South and Puajanca South).

Photo Gallery

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Santander Surface Infrastucture and Processing Facilities
Santander Surface Infrastucture and Processing Facilities
Santander Mill Building
Mill Site Overview
Flotation Recovery Circuits
Flotation Recovery Circuits
Santander Grinding Mills
Santander Grinding Mills
Flotation Cells
Drilling Development Face
Scoop tram in Operation
Loading Underground Haul Truck
Santander mine portal

Maps & Figures


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Drilling and Geology Map for the Three Magistral Deposits (North, Central and South)

Conceptual Mine Plan 2009 Resources

Historic Property Geological Map Total Magnetic Field

Geological Long Section Santander Pipe Magistral

Geological Model Magistral Deposits Puajanca South Zone 2010 Drilling

Geology map Central Peru 2009

"Geophysics Detail Santander Pipe Magistral Deposits
   
 
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