DISCLAIMER
Certain statements contained in this document, including, without limitation, those concerning the economic outlook for the mining industry, expectations regarding metal prices and production, the completion and commencement of commercial operations of certain of Trevali Resources Corp. (TRC) projects, and its liquidity and capital resources and expenditure, contain certain forward‐looking statements regarding TRC’s economic performance and financial condition. Although TRC believes that the expectations reflected in such forward‐looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward‐ looking statements as a result of, among other factors, changes in economic and market conditions, success of business initiatives, changes in the regulatory environment and other government actions, fluctuations in metal prices and exchange rates, and business and operational risk management. TRC undertakes no obligation to update publicly or release any revisions to these forward‐looking statements to reflect events or circumstances after the date of the annual report. All subsequent written or oral forward‐looking statements attributable to TRC or any person acting on its behalf are qualified by the cautionary statements herein.
A member of the Cardero Group of Companies
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1. Overview and Corporate Structure 2. Santander Project 3. Community Relations 4. Tingo Hydroelectric Station 5. Investment RationaleOverview and Corporate Structure
¾ Silver‐Lead‐Zinc PRODUCTION targeted for 2010 from the Santander
Project located 215km by road from Lima in Peru’s Central Mineral Belt
¾ Estimated mine life based on 2009 Resource Estimate of approximately
10 years with estimated annual production of approximately 45‐50
million lbs. zinc, 20 million lbs. lead and 800,000 – 1M ozs. silver
¾ Strategic partnership with Glencore International AG providing 2000tpd
plant, contract mining and manpower in exchange for LOM concentrate
offtake agreement – mitigates both financial and technical risks
¾ Trevali retains full ownership in Santander project and can acquire
ownership of Glencore’s processing plant through a modest toll charge
Overview and Corporate Structure
¾ CAPEX – modest due to existing infrastructure and Glencore
providing 2,000 tpd processing plant and contract mining fleet
¾ OPEX expected to be lower quartile – significant silver/lead credits
¾ Very significant exploration potential to expand silver‐lead‐zinc
resource
¾ Tingo hydroelectric power generating facility – low cost, renewable
power supply – surplus capacity can provide significant future
revenue stream or sufficient power for a 4,000tpd operation
¾ Evaluating options to maximize value from silver production and
surplus power generation from the wholly‐owned Tingo
hydroelectric facility
¾ Full TSX listing application submitted – to be followed by Lima
senior‐board listing
Shares Issued: 52,868,790 Fully Diluted: 66,389,877
Number Expiry Price Warrants 339,119 Dec 2010 $1.20 Warrants 1,089,625 May 2011 $1.30 Warrants 735,294 Oct 2012 $1.00 Warrants 6,070,170 Dec 2012 $1.15 Options 300,000 Apr 2010 $2.00 Options 355,000 Jan 2011 $0.72 Options 220,000 May 2011 $1.05 Options 2,800,000 Dec 2012 $1.00 Options 1,611,879 Dec 2012 $0.95 Management/Insiders: Approx. 10% Peru Group: Approx. 10% Funds/Institutions: Approx. 35% Listings CNSX*: TV Frankfurt: 4TI Pinksheets: TREVF *Full TSX listing application submitted MARKET CAPITALIZATION: ~CDN$80M
CAPITAL STRUCTURE
TREVALI MANAGEMENT
Dr. Mark Cruise, President & CEO
A carbonate‐hosted base metal deposit specialist. Project experience from grass‐ roots exploration through resource definition to permitting and production in Europe and the America’s on behalf of Pasminco Exploration, Anglo American & the Cardero Group. Part of the technical team that defined, permitted and put the 22Mt underground Lisheen Zinc – Lead Mine into production (Anglo American).
Carlos Ballon, Chairman
A mining engineer (Colorado School of Mines) who owned and operated the Santander Mine from 1985 to 1993. Previous VP‐South America for Corriente Resources and Director of Thiess South America (Australia’s largest contract miner) managing major engineering works at Tintaya and Yanacocha. Associated with the Cardero Group since 1999.
contents
A member of the Cardero Group of Companies
1. Overview and Corporate Structure
2. Santander Project
3. Community Relations
4. Tingo Hydroelectric Station
Santander Project
SANTANDER PROJECT LOCATION
¾44‐sq. km property in the world‐class Central Peruvian Polymetallic Belt – globally the No. 1 Silver, No. 2 Zinc & No. 4 Lead Producing District ¾215 km from Lima by road – government upgrading all access routes ¾Wholly‐owned Tingo run‐of‐river hydroelectric generating station 17 km from mine site ¾Fully supported 200‐man camp currently being expanded to 350‐man capacity to support mine construction and operation500m 500m – – remains open remains open Histo ric drilling suggests Histo ric drilling suggests Mine raliza tion e xtend s min. 200m Mine raliza tion extend s min. 200m ¾ 1958 – 1992: Production from Santander Pipe – approx. 8Mt to produce Zn, Pb‐Ag and Cu concentrates ¾ Mining ceases at 480m depth in mineralization due to adverse metal prices and underlying hyper‐inflation in Peru ¾ Mid‐2007: Trevali recognizes significant exploration potential for new mineral bodies ‐ acquires property ¾ Dec 2007: Geophysical (magnetics) anomalies supported by historic data and recon mapping triggers exploration drill program – numerous anomalies significantly larger than surface expression of mineralization
EXPLORATION
Santander Project Schematic Santander Pipe¾ May 2009 Golder initial 43‐101 Resource Est. ¾ May 2009: Trevali & Glencore International form partnership to develop Santander Project ‐ production anticipated in late 2010. ¾ Oct 2009 – present: Ongoing resource expansion and mine development
EXPLORATION
Massive sulphide – Magistral Sur
Santander Project Santander Project ¾ Early high‐grade intercepts initiate 20,000m Magistral exploration/ resource definition drill program of the Magistral ore bodies: ¾ DDH SAN‐0002 ‐ 28.4m @ 5.16% Zn, 3.66% Pb, 90g/t Ag & 0.12% Cu ¾ Parallel 1000+m drill program delineates zinc resource in historic tailings.
GLENCORE AGREEMENT
¾ Trevali will maintain its full control and ownership of the Santander
project and Tingo hydroelectric generating station
¾ Glencore will provide and operate a 2,000 tpd processing and
concentrate plant, and provide its operational expertise on a
‘contractor‐toll basis’ from mining through to concentrate production
¾ Trevali can acquire the plant contributed by Glencore on a ‘toll’ basis
(approx $1‐1.50/tonne)
¾ Glencore is providing Trevali a US$2 million convertible financing
¾ Trevali has secured a long‐term concentrate off‐take sales agreement
whereby Glencore will buy 100% of the Santander project area life‐of‐
mine production at benchmark terms
MINERALIZATION & DEPOSITS
Santander Project Magistral Deposits Puajanca Discovery Santander PipeMagistral North, Central and South Deposits resource expansion progress – updated NI43‐ 101 estimate anticipated in early Q2‐2010. Mineralization, defined to approx. 350m depth and remains open in multiple directions.
Santander Tailings contain 100Mlbs zinc (indicated resource) that can be reprocessed. Puajanca South Zone fourth sulphide body discovered to date. High level in the system – silver‐lead rich mineralization. Drilling underway.
Exploration continues to explore large land package (44km2), using a multidisciplinary
approach with proven exploration models for controls on mineralization.
¾ Two prospective mineral fairways recognized to date:
¾3km long Santander Pipe – Puajanca Zone ¾14km long Magistral structural trend
350 meters
MAGISTRAL DEPOSITS
All zones open to depth
Looking east-southeast
All zones open to east
North Central South 5.8m @ 5.28% Zn (MN Hole SAN-098: 4.45m @ 107.4g/t Ag, 9.92% Pb, 10.31% Zn & 0.49% Cu from 38m) Potential Eastern Zones
All zones outcrop
Depth of Mine Plan
Santander Project
10.6m @ 110.6g/t Ag, 2.14% Pb, 7.62% Zn & 0.28% Cu
6.3m @ 62.8g/t Ag, 4.74% Pb, 4.18% Zn
Contained
Tonnes % Zn % Pb g/t Ag Zn (mil lbs.) Pb (mil lbs.) Ag (mil ozs.) Indicated Resource Total Indicated 5,298,000 3.34% 1.27% 38g/t 390.4 148.7 6.5 Total Inferred 2,244,000 2.92% 0.50% 18g/t 144.3 24.9 1.3 Santander Tailings: Indicated Resource 1,656,000 2.74% ‐ ‐ 100 ‐ ‐ 634.7 173.6 7.8
2009 RESOURCES
(Golder Associates) Santander Project Resources in 3 Magistral deposits – all open ¾Approximate discovery cost of <0.5‐cent per lb Zn‐Pb ¾Current 2009‐2010 exploration has intersected some of the highest‐grade and thickest mineralization to date – anticipate increased tonnes and head‐ grade: ¾NORTH – 31.75 metres at 118 g/t (3.4 oz/t) silver, 4.86% lead, 7.46% zinc ¾CENTRAL– 41.25 metres at 71.1 g/t (2 oz/t) silver, 0.8% lead, 8.2% zinc ¾SOUTH ‐ 10.85 metres at 10% zinc ¾Resource update planned for early‐Q2 2010INTERNAL MINE DEVELOPMENT STUDY
¾ Internal Mine Development Study in mid‐2009 resulted in a positive
production decision
¾ Planned initial open pit production from Magistral North & South
transitioning to UG development from all three Magistral deposits (price
assumptions of $0.65/lb Zn, $0.60/lb Pb and $14/oz Ag)
¾ Deposits amenable to low‐cost bulk mining methods – sub‐level stoping
¾ Anticipated to be within lower quartile of cash‐cost curve due to existing
infrastructure and silver/lead credits
¾ Excellent exploration potential for discovery of additional resources:
Eastern and depth extensions to Magistral deposits
Puajanca Zone
El Toro Zone
Geophysical targets
Santander ProjectGLENCORE MINE MODEL
METALLURGY
¾ Coarse grained mineralogy provides good recoveries to produce clean concentrates 90% Lead recovery at 40% concentrate grade with 40‐50 oz/t silver 85‐90% Zinc recovery at 50% concentrate grade 80‐85% Silver recovery (to lead concentrates) ¾ Good potential for production expansion Santander Project
EXPLORATION – SIGNIFICANT UPSIDE POTENTIAL
Santander Project 10.65m @ 10% Zn 10.6m @ 110.6g/t Ag, 2.14% Pb & 7.62% Zn 6.3m @ 62.8g/t Ag, 4.74% Pb & 4.18% Zn 88.7m @ 8.14% ZnSantander Project
GEOPHYSICAL TARGETS
AT SANTANDER
Magistral Deposits Santander Mill Puajanca Discovery Santander Pipe¾ Strong correlation of magnetic
and electrical anomalies with
sulphide‐mineralization.
A member of the Cardero Group of Companies
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1. Overview and Corporate Structure 2. Santander Project 3. Community Relations 4. Tingo Hydroelectric Station 5. Investment RationaleCommunity Relations
SANTANDER COMMUNITIES & PERMITTING
Local communities on board and highly supportive:
¾ Proactive community consultation and dedicated Community Relations team; communities have signed off on all permits
¾ All required surface land rights obtained
¾ Tailings permitted
¾ Water rights permitted
¾ Mine Plan submitted – permit pending
¾ Detailed Processing Plant engineering underway – basis for final Plant permit
¾ Glencore committed to commence construction late March – early April with Plant commissioning approx. October – November 2010
A member of the Cardero Group of Companies
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1. Overview and Corporate Structure 2. Santander Project 3. Community Relations 4. Tingo Hydroelectric Station 5. Investment RationaleTingo Hydroelectric Station
TINGO HYDROELECTRIC GENERATING STATION
The Tingo run‐of‐river hydroelectric generating station is situated 17 km west, down‐ valley, from the Santander mine site and has operated since 1958 generating up to 1.6MW of electricity – partly servicing the power needs at the Santander mine.
US$15‐million financing rights agreement with Interbank of Peru to fund increase of generating capacity from current 1.6MW to approximately 10MW, upgrade the existing transmission line and extend the line to connect to the Peruvian National Energy Grid allowing for sale of excess power and cash flow to Trevali.
Conservative independent model suggests an NPV12 of US$10 million and after‐tax IRR of 20% with cashflow of US$5 million per annum. Life‐of‐project minimum 50 years (indefinite).
A member of the Cardero Group of Companies
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1. Overview and Corporate Structure 2. Santander Project 3. Community Relations 4. Tingo Hydroelectric Station 5. Investment RationaleInvestment Rationale GLENCORE Iskaycruz Business Unit MILPO VOTORANTIM N. Santander – P. Nuevo VOLCAN Alpamarca Mine TREVALI Santander Mill TREVALI
Tingo Power Station
TREVALI GOING FORWARD
Increase market value with ongoing exploration & development.
Trevali Renewable Energy Inc. offers significant additional upside.
Short Term Value Drivers:
¾ Production and cash flow targeted for 2010 ¾ Major strategic partner – Glencore (world’s largest metal trader) ¾ Highly leveraged for predicted Zn and Pb deficits in late 2010 ‐ 2011 ¾ Listings applications on major exchanges – Toronto & Lima ¾ Proven team ‐ resource expansion programs currently underway ¾ Exposure to silver market opportunitiesMedium Term Value Drivers:
¾ Potential for increased capacity (4,000 tpd) and improved efficiencies ¾ District Consolidation ‐ disciplined approach to acquisitions ¾ Examine further hydroelectric growth opportunities Investment RationaleTrevali Resources Corp.
1920-1188 West Georgia Street
Vancouver, BC, Canada, V6E 4A2
Phone: 1-604-488-1661
Fax: 1-604-408-7499
www.trevali.com
Contact:
Steve Stakiw, Manager – Corporate Communications
