Three Valley Copper Suspends Mining Operations and Provides Strategic Review Update
FOR IMMEDIATE RELEASE
Three Valley Copper Suspends Mining Operations and Provides Strategic Review Update
TORONTO, January 24, 2022 (TSXV: TVC) (OTCQB: TVCCF) Three Valley Copper Corp. (“Three Valley Copper” or the
“Company”) provides a corporate and operating update on its 95.1% owned Minera Tres Valles (“MTV”) property
near Salamanca, Region de Coquimbo, Chile.
Operations Update
Don Gabriel
The underperformance of Don Gabriel, MTV’s open pit operation and primary source of ore for 2021 and 2022, has
continued. The Company’s previous belief was that this underperformance was temporary in nature, but Don Gabriel
has unfortunately continued to deliver less ore tonnes at lower grades than forecasted. This shortfall has called into
question the future economics of the Don Gabriel open pit and the immediate impact to MTV is materially lower
current and forecasted cash inflows and revenues resulting in a deteriorating liquidity position.
MTV has prudently decided to temporarily suspend operations and has undertaken to demobilize its contractors and
place Don Gabriel into care and maintenance until management and the technical teams have completed their
analysis of Don Gabriel and alternatives to the current mine plan.
Papomono
The initial construction of the Papomono block caving mine has been completed and has reached the stage where
the caving operation can commence. This timetable is consistent with what has been reported previously and
construction costs are in line with forecasted costs . However, MTV has chosen to temporarily halt the start of the
block caving operation as the expected cash flows are not sufficient to fully support the ramp-up of Papomono during
2022. Increasing production input costs and the continued underperformance of its open pit operations at Don
Gabriel has significantly impacted MTV’s ability to generate the necessary cash flows to fund the planned ramp-up
of the Papomono underground mine. MTV’s management and technical teams have concluded that in the absence
of taking this action, there would be a significant risk that Papomono would be destabilized if the caving operation
was to start without MTV having the funds to continue its orderly ramp-up of production.
Operating Guidance
The Company is now retracting its revised preliminary operating outlook for 2022 and 2023.
The Company’s revised operating guidance for 2021 was to produce between 4,500 and 5,500 tonnes of copper
cathodes. Actual production for 2021 was slightly lower than guidance at 4,209 tonnes which represents less than
25% of MTV’s overall copper cathode production capacity.
To further preserve liquidity, MTV has also temporarily suspended its exploration program, and suspended certain
sustaining and expansion capital expenditures. Notwithstanding these actions , based on MTV’s current cash flow
forecast, MTV will require additional financing in the next several months. Three Valley Copper currently maintains
working capital of approximately US$7 million separate from MTV but this is not sufficient to finance the expected
funding gap at MTV and fund the Company’s ongoing corporate requirements. Three Valley Copper is reviewing its
alternatives while preserving its cash resources.
The cessation of mining activities at MTV may result in one or more events of default under the amended and
restated senior secured lending facility . The Company and MTV are currently in discussions with MTV’s senior
secured lenders and copper cathode offtake provider to determine if a continuing successful partnership can be
maintained through, inter alia, bridge loan financing, additional debt financing, forgiveness or conversion of debt,
waivers of operating and other covenants, deferrals of or renegotiation of repayment terms and/or renegotiation of
the fixed price portion of the offtake agreement. The Company and MTV are also exploring MTV’s ability to
renegotiate the Judicial Reorganization Agreement (“JRA”) executed in August 2020. At this time there can be no
assurance that any agreement can be reached with the senior secured lenders and/or offtake provider or that a
renegotiation of the JRA is possible, and the Company will continue to report on the progress of such discussions.
Strategic Review Process
The Strategic Review Process has not yet resulted in any binding offers being received by the Company. Discussions
remain ongoing but there can be no assurance that such discussions will result in any type of transaction, what the
value of any transaction might be, what the terms or timing of such a transaction might be or that the Company will
be able to continue as a going concern if no transaction is concluded.
At this time, the Company does not expect the Strategic Review Process to result in an imminent transaction that
would provide meaningful value for holders of Three Valley Copper’s equity securities (including securities
convertible into or exercisable for equity securities). As a result , holders of Three Valley Copper’s equity securities
are cautioned that trading in such securities is highly speculative.
The Company will provide updates when further disclosure is required or otherwise appropriate.
About Three Valley Copper
Three Valley Copper, headquartered in Toronto, Ontario, Canada is focused on growing copper production from, and
further exploration of, its primary asset, Minera Tres Valles. Located in Salamanca, Chile, MTV is 95.1% owned by the
Company and MTV's main assets are the Minera Tres Valles mining complex and its 46,000 hectares of exploratory
lands. For more information about the Company, please visit www.threevalleycopper.com.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this news release, contain forward-looking information (collectively referred to herein as the
"Forward-Looking Statements") within the meaning of applicable Canadian securities laws. The use of any of the
words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends"
and similar expressions are intended to identify Forward-Looking Statements. In particular, but without limiting the
foregoing, this news release contains Forward -Looking Statements pertaining to: expected cash fl ow and capital
resources; ability of the Company to continue as a going concern; ability of MTV to comply with the terms o f its
existing debt facility and other material agreements; the potential outcome of the Strategic Review Process;
Company’s expectations for current and future exploration activities; operating guidance; development progress of
the Company’s mineral projects; statements with respect to the timing and production of copper at the Don Gabriel
and Papomono sites; advancement of ongoing projects, including the progress and timing of completion of the
inclined block-caving mining project, and the estimated capital costs required for completion.
Although TVC believes that the Forward -Looking Statements are reasonable, they are not guarantees of future
results, performance or achievements. A number of factors or assumptions have been used to develop the Forward-
Looking Statements, including: the availability of certain consumables (including water) and services and the prices
for power, sulfuric acid and other key supplies; expected labour and materials costs and available supply; certain tax
rates, including the allocation of certain tax attributes, being applicable to MTV; the availability of financing for the
Company's and MTV’s planned operations and development activities; assumptions made in mineral resource and
mineral reserve estimates and the financial analysis based on these estimates, including (as applicable), but not
limited to, geological interpretation, grades, commodity price assumptions, metallurgical performance, extraction
and mining recovery rates, hydrological and hydrogeological assumptions, capital and operating cost estimates, and
general marketing, political, business and economic conditions, the continued availability of quality management,
critical accounting estimates, all terms of the restructuring agreement and facility agreement to which MTV and the
Company are parties will be satisfied in the future including no events of default, existing water supply will continue,
supplemental water availability will continue, the geopolitical risk of Chile will remain stable, including risks related
to labour disputes, a partial ramp up of mining operations at Papomono Masivo without sufficient capital support
could result in destabilization of the mine; the litigation and /or arbitration initiated by the minority shareholder of
the Company’s operating subsidiary, MTV will proceed according to the timeline provided by litigation counsel; the
expected production and results from the Don Gabriel mine; and expected ability to repay the indebtedness of MTV.
Actual results, performance or achievements could vary materially from those expressed or implied by the Forward-
Looking Statements should assumptions underlying the Forward-Looking Statements prove incorrect or should one
or more risks or other factors materialize, including: (i) possible variations in grade or recovery rates; (ii) copper price
fluctuations and uncertainties; (iii) delays in obtaining governmental approvals or financing; (iv) risks associated with
the mining industry in general (e.g., operational risks in development, exploration and production; delays or changes
in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates
and projections relating to mineral reserves, production, costs and expenses; and labour, health, safety and
environmental risks) and risks associated with the other portfolio companies' industries in general; (v) performance
of the counterparty to the ENAMI Contract; (vi) risks associated with investments in emerging markets; (vii) general
economic, market and business conditions; (viii) market volatility that would affect the ability to enter or exit
investments; (ix) failure to secure additional financing in the future on acceptable terms to the Company, if at all; (x)
commodity price and foreign exchange fluctuations and uncertainties; (xi) risks associated with catastrophic events,
manmade disasters, terrorist attacks, wars and other conflicts, or an outbreak of a public health pandemic or other
public health crises, including C OVID-19; (xii) those risks disclosed under the heading "Risk Management" in TVC’s
Management’s Discussion and Analysis for the period ended December 31, 2020; and (xiii) those risks disclosed
under the heading "Risk Factors" or incorporated by reference into TVC’s Annual Information Form dated March 3,
2021. The Forward-Looking Statements speak only as of the date hereof, unless otherwise specifically noted, and
the Company does not assume any obligation to publicly update any Forward -Looking Statements, whether as a
result of new information, future events or otherwise, except as may be expressly required by applicable Canadian
securities laws.
Cautionary Note to United States Investors Concerning Estimates of measured, indicated and inferred mineral
resources
This news release may use the terms "measured", "indicated" and "inferred" mineral resources. Historically, while
such terms were recognized and required by Canadian regulations, they were not recognized by the United States
Securities and Exchange Commission (the “ SEC”). The SEC has adopted amendments to its disclosure rules to
modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC
under the Securities and Exchange Act of 1934, as ame nded (the “ Exchange Act”). These amendments became
effective February 25, 2019 (the “ SEC Modernization Rules ”) with compliance required for the first fiscal year
beginning on or after January 1, 2021. The SEC Modernization Rules replace the historical prop erty disclosure
requirements for mining registrants that were included in SEC Industry Guide 7, which will be rescinded from and
after the required compliance date of the SEC Modernization Rules. As a result of the adoption of the SEC
Modernization Rules, the SEC now recognizes estimates of “measured”, “indicated” and “inferred” mineral
resources. In addition, the SEC has amended its definitions of “proven mineral reserves” and “probable mineral
reserves” to be substantially similar to the corresponding Can adian Institute of Mining, Metallurgy and Petroleum
definitions, as required by NI 43-101. Investors are cautioned that "Inferred mineral resources" have a great amount
of uncertainty as to their existence, and as to their economic and legal feasibility. I t cannot be assumed that all or
any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates
of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors
are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted
into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred
mineral resource exists or is economically or legally mineable.
For further information:
Michael Staresinic
President and Chief Executive Officer
T: (416) 943-7107
Renmark Financial Communications Inc.
Joshua Lavers: [email protected]
T: (416) 644-2020 or (212) 812-7680
www.renmarkfinancial.com
United States
RB Milestone Group LLC (RBMG)
Trevor Brucato, Managing Director
www.rbmilestone.com
Source: Three Valley Copper Corp.
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TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.