Entering text into the input field will update the search result below

Trevali Mining Hits A Jackpot


  • Trevali Mining will acquire 75% of Puma Exploration's Murray Brook deposit.
  • Murray Brook contains 1.234 billion lb of zinc equivalent (using the current metals prices).
  • The current market value of the contained metals is $1.852 billion.
  • Trevali will pay only $0.0063 per 1 lb of zinc equivalent.

Last Friday Trevali Mining (TREVF) announced that it entered into a LOI with Puma Exploration (PUXPF) for the acquisition of an option to acquire an interest in the Murray Brook Deposit. Trevali should provide up to $5.81 million (C$7.5 million) to Puma. Puma should use the money to complete the acquisition of the Murray Brook Property from its former owners, Votorantim and El Nino (ELNOF) and to repay a recent C$2 million loan. After the deal is completed, the Murray Brook deposit will be 75% owned by Trevali and 25% owned by Puma and the Murray Brook East property will be 51% owned by Trevali and 49% owned by Puma. Trevali will also participate on a private placement and it will purchase units worth $387,597 (C$500,000), at a price of C$0.12/unit (each unit consists of 1 common share of Puma and 1/2 of a warrant).

The Murray Brook Project contains measured & indicated resources of 659.9 million lb zinc, 225 million lb lead, 69.1 million lb copper, 12.1 million toz silver and 111,000 toz gold. At the current metals prices of $1.5/lb zinc, $1.1/lb lead, $3.1/lb copper, $16.75/toz silver and $1,335/toz gold, there are 1.208 billion lb of zinc equivalent. Further 26.027 million lb of zinc equivalent are contained in the inferred category. The current market value of the contained metals (measured + indicated + inferred) is almost $1.852 billion.
Source: Author's own table, using data from Trevali Mining.

Moreover, it is very probable that the resource estimate will keep on growing. A Puma's news release from last April states that the deposit is still open at depth and according to Puma's president:

The potential to grow the Mineral Resource is significant according to the drill ready targets located along strike and toward the Caribou Mine.

During the autumn drill

This article was written by

Peter Arendas profile picture

I am an associate professor at the University of Economics in Bratislava, Department of Banking and International Finance. My dissertation was focused on commodity markets and my habilitation was focused on the calendar anomalies. I have more than 15 years of investing experience. My investments mostly focus on small- and mid-cap companies in the resource sector. Since May 2019, I have been preparing regular monthly reports focused on the precious metals royalty & streaming industry. Based on positive feedbacks and numerous inquiries, I decided to launch a Marketplace Service named "Royalty & Streaming Corner", which provides an in-depth analysis of this exciting market segment, as well as investment ideas from the mining industry.

Analyst’s Disclosure: I am/we are long TREVF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (32)

Today TV results are coming out for the year and quarter any bets?
Michu profile picture
What are your current top picks?

I am wondering if it makes sense to buy those mining stocks which are at a multi year low. Of course, only selected stocks make sense which have a fair chance to recover.

See also this article about lows: "Return reversal in UK shares".
"...that is, portfolios of shares showing the worst total return performance over a three or five year period subsequently significantly outperform portfolios of shares made up of prior period „winners‟, and the market portfolio, over the long horizon. This out-performance is remarkably high: extreme prior losers outperform extreme prior winners by 5-10 per cent per year. Studies from around the world have drawn similar conclusions."
Peter Arendas profile picture
It's an interesting study. However, I'm not sure whether results for highly cyclical sectors (such as the mining sector) would be similarly impressive.
asuwad profile picture
09 Mar. 2018
Analists here estimate a target share price for TV at $2.12. So no matter what the current fluctuations or shor term downside of zinc price is, isnt buyin TV at $1.10 a bargain?
sliman21 profile picture
If you believe the analyst. TREVF does business with brokerage firms so analyst may be influenced.
Analysts work also for banks and investment firms that might have another agenda other than what they say to clients ... We should not go with these conspiracy theories. You want to know the real price of the stock you crunch the numbers and look at the potential.
TV has a good balance sheet, quality brownfield projects, a good market so things could only get better...
Very nice article Peter, I was looking on adding more TV, how low can this go we are getting close to the 1.20 Glencore got per share... I would like to see them diversify a little maybe take a shot at some Cobalt or copper properties. Maybe Nickel
Peter Arendas profile picture
I agree, especially a quality cobalt asset could be a good addition.
What do you think of last quarter and year?
Peter Arendas profile picture
I didn't have enough time to take a closer look at it, but the Q4 EPS of $0.03 looks good. If you annualize it, you have $0.12, which means that Trevali's P/E is less than 9 right now.
Lazer65 profile picture
Thanks Peter. I own TV and will be picking up more today.
Peter Arendas profile picture
I would probably wait for a little longer, as zinc is down again today. It is possible that you will get a better entry price next week.
09 Mar. 2018
Great review Peter... insightful reply re zinc price ... when marin katusa asked Rick Rule re zinc, RR replied " increased too much too fast " :-)
Oliver Sudden Jr profile picture
Matt, you and Peter are 2 of my favorites on SA.
Trend Investing profile picture
Oliver - Thank you. Same here ha ha !!!
Actually there is some new zinc supply coming soon so that may be a factor also. A quote from my article:
"Zinc price could fall back sharply due to oversupply. That's possible, but zinc is currently heading into deficit. Ivanhoe Mines (OTCQX:IVPAF) will develop the very high-grade Kipushi and bring on significant production volumes, along with the Vedanta Resources (OTCPK:VDNRF) Gamsberg mine expansion. Together they might add ~1mtpa into a 13.5mtpa zinc market, or an ~8% increase. This is within the next two years, so it's only a mild concern. However, this new supply could be absorbed by increasing market demand and the zinc price would not be too affected."
Peter Arendas profile picture
Thanks :)
Matt you wrote a piece on Fortune minerals that I also own. Would be nice to see a JV with Trevali don't you think? Do you see this possible?
FlyTight profile picture
Thank you Peter. Nicely analyzed and written up. Charts look inviting here, so bought a position today at $1.34. Metals not holding up all that well right here, so may get hurt a little, but given your analysis, this stock should do well. We may owe you a good bottle of wine. Cheers
Was expecting more in terms of share performance but may this just needs some time to be reflected in the share price
This adds long term stability for TREVF in a safe mining district.

Update on zinc inventory levels at the LME: With a burn rate of some 30-40,000 tons per month, I thought that the LME would run out of zinc in about 3-4 months. Then 2-3 days ago, some 70-80,000 tons were added to the London Metals Exchange stockpiles. OUCH! This pushes things back a bit and zinc prices have softened considerably as a result.
Paul German profile picture
Despite the recent rise, still look like pretty low levels historically - http://bit.ly/2G9ip84
sliman21 profile picture
If this is a jackpot why is the stock going down?
Peter Arendas profile picture
It's going down along with the zinc price.
sliman21 profile picture
TREVF has lagged zinc price for the last year and over 5 yrs. Market so far is not buying the "jackpot" claim.
CityShark profile picture
Great article!
Peter Arendas profile picture
junior conquest profile picture
I've been in the stock before and it might be time to jump back in. Thanks for the article.
Peter Arendas profile picture
I would wait for the zinc price to stabilize.
Trend Investing profile picture
Peter - Great work. Thank you.
Peter Arendas profile picture
You're welcome.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.