Santander Mine
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Located in Lima Department, Peru, the Santander Mine enjoys ease of accessibility and quality infrastructure, including a processing/concentrate plant, a hydroelectric power generating facility and staff accommodations. Between 1958 and 1991, mining of the Santander Pipe produced approximately 8 million tonnes grading +7% zinc, 1 to 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.
Resource definition drilling performed by Trevali from 2008-10 on the 44-km2 Santander Property confirmed very significant exploration potential. Specifically, in three newly discovered deposits, almost all of the 165 drillholes (32,000 metres) intersected polymetallic mineralization over significant intervals from surface to approximately 350 metres vertical depth. Mineralization remains open for expansion to depth and to the East.
An updated independent NI 43-101 resource estimate performed by Golder Associates in November 2010 significantly increased indicated resources to 498 million contained lbs zinc, 174 million lbs lead and 8.25 million ozs silver in 5,858,000 tonnes at an average grade of 3.86% zinc, 1.35% lead and 44 g/t silver using a 3% ZnEQ* cut-off grade. Additional inferred resources of 538 million contained lbs zinc, 46 million lbs lead and 3.2 million ozs silver in 4,806,000 tonnes at 5.08% zinc, 0.44% lead and 21 g/t silver was also reviewed using the same cut-off grade. (Please review Disclaimer)
Trevali, together with its partner Glencore International, has completed a definitive development agreement for the Santander mine project that will see Glencore provide and operate a 2,000-tonne-per-day mill/concentrate plant, undertake contract mining operations and enter into a long-term concentrate offtake agreement for 100% of Santander project production at International Benchmark 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.It is accessible by road from Lima, either via the town of Huaral and continuing through the villages of Acos and Tingo to Santander (distance of 215 km) or via the town of Canta to Santander, a distance of 200 km (Fig. 1).
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, including a 1,000-person camp, associated support facilities and an ore-processing/concentrate plant, 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
The infrastructure includes a historic 1,000-person camp (now fully refurbished to a modern 500-person camp) and associated support facilities. Glencore International, as part of the formal agreement, is providing and will operate a modern 2,000-tonne-per-day concentrate plant to produce silver-lead and zinc concentrates. Additionally, the Tingo hydroelectric generating facility is located approximately 17 km down-valley to the West and is connected to the mine site.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.Total production is estimated to be about 8 million tonnes averaging +7% zinc, 1 to 4% lead and 60 g/t silver with additional copper credits. Mineralization remains open at depth with reported zinc grades of 11% in multiple replacement or manto bodies.
An initial due diligence study in late 2007 undertaken by the Company confirmed the high-grade nature of the former producer with values up to 39.8% zinc, 8.98% lead, 324 g/t silver and 1.6% copper (see NR-07-01 for details) determined through re-sampling of outcropping mineralization and historical drillholes.
Typically, such Carbonate Replacement Deposits (CRDs) comprise multiple lens and orebodies 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).
Current Work
The aim of the current round of drilling (2011) has been focussed on resource expansion to known mineralization, in particular along predicted deposit plunges. In this regard, the results to date have been extremely successful, and all three Magistral deposits and the Puajanca South prospect remain open for expansion. click to view enlarged |  click to view enlarged |