The Caribou mine will restart in February after a diminishing zinc price and the COVID-19 pandemic caused it to be suspended in March 2020. Courtesy of Trevali Mining Corporation.

Trevali Mining Corporation announced on Jan. 15 that it would be restarting its New Brunswick-based Caribou zinc-lead-silver mine with an updated production plan to improve the mine’s economics.

Caribou’s temporary suspension was announced on March 26, 2020, a result of the dual pressures of the “deteriorated” global zinc market and the global spread of the COVID-19 pandemic. No timeline for a restart was given at the time, and the company withdrew its 2020 guidance as well. Prices for zinc fell to a low of US$1,848 per tonne in mid-March 2020 according to Business Insider’s commodity price index, part of a continuous slide for the commodity that had been ongoing since its peak of US$3594.50 per tonne in February 2018.

However, the price of zinc has been steadily climbing since then, with a Jan. 11 spot price of US$2,715.70 per tonne. This improved market, plus the “implementation of several operational and commercial enhancements,” has led the company to go ahead with the restart of the Caribou mine in early February, with first payable zinc production expected by the end of March.

“Out team has worked diligently to reduce the overall cost structure of the Caribou mine, and I am pleased that we are in a position to restart mine operations in a manner that we expect will generate positive cash flow,” Trevali president and CEO Ricus Grimbeek said.

Related: After the federal government rejected purchase by a Chinese mining company, Agnico Eagle seizes opportunity to purchase TMAC

The improved economics are the results of partnerships with two companies that will allow Trevali to cut production costs and avoid the effects of a potential drop in zinc prices. The company will be partnering with Redpath Mining as an underground contractor at Caribou, which will be able to mobilize people and equipment quickly, which Trevali says will support a timely ramp-up of mining activities. The company is estimating an all-in sustaining cost of between $0.84 and $0.90 per pound of zinc in 2022.

Trevali has also entered into a 21-month fixed pricing arrangement with an affiliate of Glencore for “a significant portion of the forecasted production from the mine.” According to the announcement, the affiliate has agreed to purchase 155 million pounds of zinc at an average of $1.25 per pound, which represents approximately 80 per cent of the mine’s forecasted zinc production over the next two years. Trevali says it is looking into similar agreements for both lead and silver as well.

The pricing arrangement will extend to the end of Caribou’s current two-year mining plan, and, according to Grimbeek, the company “will continue to study the potential to extend [its] initial mine plan, as well as explore further potential in the Bathurst mining camp.”