All key mill circuits: Crushing — Grinding — Flotation — Concentrate Filters — Metallurgical & Geochemical Laboratories and Concentrate Handling have been either fully replaced, refurbished or repaired where necessary and are available for commissioning by Trevali’s Plant team.

Consultant DRA Americas Inc.’s metallurgical processing specialists are fully mobilized on site and focusing on operator training and troubleshooting, in addition to updating operational and preventative maintenance programs to de-risk commissioning and mill ramp-up periods to commercial operation. XPS Consulting & Testwork Services have also been retained to provide metallurgical support in addition to Glencore Technology for the IsaMills.

CARIBOU COMMISSIONING STRATEGY

Based on lessons learned during our successful 2013 Santander Mill commissioning, the Company has adopted a measured or phased commissioning plan for the more complex Caribou mineralization, including:

  • In order to ensure sufficient feed is available for commissioning, mining has produced an approximately 75,000-tonne surface mineralized mill-feed stockpile from underground ("UG") development and production stopes with an additional 28,000 tonnes of mill-feed drilled and readily available for blast and mucking through the new ramp system (Figure 1). UG development and production has been going exceptionally well, additional details are discussed below.
  • Initial commissioning will commence with low-grade material as the operators bring the grinding and flotation circuits up to specification. Positive-loop iterative optimization will occur during night-shift based on results obtained during the day with input from DRA and the various metallurgical support teams. Flotation and subsequent concentrate production will focus on the established Zn and Pb (Ag) circuits (Figure 2), with Cu (Au) circuit commissioning scheduled to commence later this year.
  • Once sufficient operational data is obtained, tentatively during July-August, Trevali will mobilize its senior metallurgical consultant to site to provide additional technical and metallurgical support capacity. Glencore will also make available several of their Australian IsaMill specialists during this period if required.
  • Concentrate trucking has been tendered and awarded with site specific training and orientation in progress. The Company will build a stockpile of concentrate on site prior to shipping and sale to Glencore at their adjacent Belledune smelting complex tentatively anticipated in late-Q2 to early-Q3.

CARIBOU MINING

Underground refurbishment, development and mining has been going exceptionally well year-to-date. There is presently 7.3 kilometres, within a total 13.3 kilometres of underground development, in 10 of 16 levels and sub-levels fully refurbished and available for production operations. In addition 619 metres of waste development, including a new 422-metre ramp to surface stockpile connection (the 2560 Portal) and 278 metres of development in sulphides has been completed since late February (Figure 3).

Experience to date is that ground conditions are better than modeled and are good-to-excellent within the massive sulphide production stopes. Localized areas of poor ground conditions are identifiable and predictable, and suitable support has been successfully planned and implemented ahead of schedule.

Underground optimization is already advanced with Trevali’s Drill and Blast specialist on site enhancing blast patterns, blast-hole diameters, powder factors and optimal mineral fragmentation.

Critically stope-cycle optimization has been ongoing and is better than planned with UG currently producing tonnage from 3 stopes versus 4 as modeled in the restart plans. Production is currently at 1800 tonne-per-day ("tpd") or 60% of nominal run-rate design from these 3 stopes. This is materially better than initial plans where modeled production required 6 stopes in the production cycle for 1800 tpd. The mine is currently producing from single stopes at 1200 tpd versus 500 tpd in the Caribou Preliminary Economic Assessment.

Initial reconciliation studies are positive with excellent correlation between the detailed geological block model — underground channel and blast hole sampling and the coarse feed stockpile.

Production stopes mined to date produced 33,000 tonnes at grades of 5.87% Zn, 2.27% Pb and 65.5 g/t Ag versus a block-modeled 33,000 tonnes at 5.88% Zn, 2.31% Pb and 55.7 g/t Ag. Production stope dilution to date is 7% with a 93% stope recovery versus planned 16% dilution and 94% recovery providing a high degree of confidence for mineral continuity in the deeper, as yet undeveloped levels, in the current mine plan and beyond. Regardless, the Company is currently tendering an approximately 10,000-metre predominantly UG drill campaign to provide additional detail for mine planning purposes that will commence later in 2015 and continue into H1 of 2016. The Caribou deposit remains open for expansion as evidenced by the recent intersection of 50.9 metres of massive sulphide mineralization grading 5.08% Zn, 1.76% Pb, 0.37% Cu, 59.66 g/t Ag and 1.63 g/t Au in drill hole BR-1014A approximately 200 metres from the currently defined deposit.

Dewatering is ongoing and continues to progress following a heavy Spring melt. The Company is currently in the process of upgrading the Water Treatment Plant from its 600 gallon-per-minute ("gpm") capacity to approximately 1200 gpm in order to provide excess capacity going forward.