February 13, 2012 Research Update

TREVALI MINING
Transition nearly complete EVENT
Trevali Mining has commenced production at its 100%-owned Halfmile Mine located in the Bathurst Mining Camp of Northern New Brunswick. The Company has also provided an update on the development of its 100%-owned Santander Mine located in Peru.
Recommendation: BUY

Symbol/Exchange: TV/TSX Sector: Metals and Mining All dollar values in C$ unless otherwise noted. Current price: $1.41 One-year target: $2.30 Target return: 63% Cash on Hand: $15M

BOTTOM LINE
Trevali Mining is in the process of putting both of its polymetallic mines into production this year and is in the final stages of transitioning from a developer to a producer. We expect Trevali to undergo a trading multiple expansion as it completes this process.

Company Summary
Shares O/S (M) Market cap ($M) Market float ($M) 148.0 52-week range $208.7 Avg. weekly vol. (000) $182.4 Fiscal year-end 2010A Zinc Production (M lbs) Net Revenue ($M) Operating Cost ($M) EBITDA ($M) EPS, diluted Operational CFPS Price/revenue Price/OCFPS 0.00 0.00 0.00 0.00 0.00 NMF NMF NMF 2011A 0.00 0.00 0.00 0.00 0.00 NMF NMF NMF 2012E 103.95 196.39 71.22 76.54 0.69 0.51 NMF NMF
$ 0.79 - 2.34

1.609 31-Dec 2013E 157.45 333.81 103.56 152.28 1.45 1.04 0.6 1.4

Equity Research

We are raising our recommendation to BUY from BUY (Speculative) but decreasing our target price to $2.30/share from $4.00/share primarily due to share dilution and the application of a lower P/NAV multiple.

FOCUS POINTS
Trevali Mining has commenced production at its Halfmile Mine and the ore will be sent to Xstratas Brunswick mill for processing. The company intends to ramp up production to 2,000 tonnes per day during the current quarter. The Santander project development is on schedule and is expected to be commissioned in Q2-Q3 2012. Rare zinc leverage. With Breakwater and Farallon acquired in 2011, there is a shortage of zinc-focused companies. We estimate that zinc accounts for 73% of Trevalis revenue on a steady state basis.
Company profile: Trevali Mining is a Canadianbased zinc producer/developer. The Halfmile Mine and Stratmat polymetallic deposit is located in New Brunswick and production at Halfmile began in 2012. The Santander project is located in Peru and is expected to be commissioned in mid-2012

Source: Company Reports and Versant Partners Estimates

$2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Mar/11 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 May/11 Jul/11 Sep/11 Nov/11 Jan/12

Price (C$)

Rob Chang, MBA

rchang@versantpartners.com (416) 849-5008 (866) 442-4485 Sales/Trading Montreal: (514) 845-8111, (800) 465-5616; Toronto: (416) 363-5757, (866) 442-4485 See disclosure and a description of our recommendation structure at the end of this report.

Volume (M)

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February 13, 2012

HALFMILE IN PRODUCTION
Trevali Mining has announced that it has commenced production at its Halfmile mine located in New Brunswick. Material is being extracted from the upper zone and will be sent to Xstratas Brunswick 12 mill for processing. Ore is currently being stockpiled prior to the first shipment to the mill.
Exhibit 1. Halfmile mine development plan

Source: Trevali Mining

Management has indicated that production is expected to be ramped up to the 2,000 tonnes per day by the end of Q1/12. An underground development crew was mobilized to extend the access ramp the mines second level, which is necessary for the mine to achieve nameplate production.

SANTANDER TO PRODUCE IN 2012

Trevali also provided an update for its Santander mine in Peru. The company noted that infrastructure and support facilities construction are on track and that the mine is expected to commence production in mid-2012. Processing plant As previously announced, Trevali has a life-of-mine concentrate off-take agreement with Glencore International (GLEN-LSE). The agreement provides Trevali with Glencores contract mining services and 2,000 toll milling. Glencore is relocating a plant from its depleted Rosaura project to the Santander site area. With respect to these activities, Trevali noted: The contract for plant demobilization and the construction contract have both been awarded. Plant dismantlement is 40% complete All equipment is expected to arrive at the Santander site by February 2012 Crushers, hoppers, vibrating feeders and ancillaries, tertiary mill, compressor house and floatation cells have been dismantled

Rob Chang, MBA (416) 849-5008

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February 13, 2012

Primary and secondary mills are empty of charges and are currently being dismantled. Tertiary Mill dismantled and out. Cell-House (Zn-Pb) dismantled and cells, impellors and pumps out. Zn, Pb, & tailings thickeners in process of being X-rayed prior to disassembly. Compressor house dismantled and compressors (3) and blowers (2) packed and ready to move. Majority of piping removed. New equipment - Zinc Cells, Filter, Rock-breaker cleared through Customs at Lima Port (Callao) and is on site at Santander.

Mine Infrastructure and Power Management is planning to commence underground development in April 2012. Current mine development includes the following: Portal preparation complete (4.5 by 4.5m - capable of accommodating 30-tonne haul trucks) Closed Mine Water system (no surface water mixing) advanced Foundations and support for the compressor house, lunch room, training room, lamp-room, offices and underground fleet maintenance shops in place. Explosive Magazines fully permitted. Remaining civil-work will occur in Q1/2 2012 and includes: increased industrial water storage capacity that will be completed prior to 'dry' season; construction of 60,000-tonne coarse mineral-stock pile (one month's mill capacity) and temporary waste dumps and upgrade tailings management facility to a closed system. The new main substation at Santander Mine is largely complete with transformers and switches all delivered and installed. A long-term power purchase agreement is in place with SNP Power -- which allows for 2.4Mw initial power. Upon completion of the Tingo Hydro Power Plant, Santander will have access to approximately 15Mw of power from two different sources that should facilitate any potential production increases going forward. Permits Two key permits are expected to be received in the first quarter of 2012. Positive notice was received from the Ministry of Energy and Mines in late November. Trevali has successfully completed the standard 30-day notice period and the company expects the final permit by March 2012. Trevali received minor comments on the Mine Environmental Impact Assessment (EIA) in late November - early December and responses were lodged prior to year-end. Receipt of the mine EIA permit is expected in late Q1/12.

Rob Chang, MBA (416) 849-5008

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February 13, 2012

RARE ZINC LEVERAGE

With Breakwater and Farallon acquired in 2011, there is a shortage of zincfocused companies. Based on our fully ramped up, steady state forecast for Trevali, we estimate that zinc accounts for 73% of the companys revenue. For every 5% change in our zinc price assumptions, our 10% NAV of $3.85/share changes by $0.31/share.

STRATMAT DRILLING UPDATE

Trevali also announced that diamond drilling at the Stratmat zinc-lead-silvercopper deposit, in the Bathurst Mining Camp of northern New Brunswick, has confirmed the presence of extensive massive sulphide mineralization. The results indicate a new, wide zone of near-surface mineralization containing significant zinc, lead, copper, silver and gold concentrations, that also remains open for expansion along strike and at depth. The ongoing planned 5,000-metre drill program is intended to convert a significant portion of the estimated independent National Instrument 43-101 compliant inferred resource of 5.5 million tonnes* grading 6.11% Zinc, 2.59% Lead, 0.40% Copper, 54.21 g/t Silver, and 0.62 g/t Gold, to a higher confidence category.
Exhibit 2. Stratmat drill results
Drill Hole includes: ST-71 2 115.92 1 39.3 ST-71 3 ST-71 4 includes: 68.63 1 60.42 1 66 1 88.88 ST-71 6 1 0.25 1 1 69.22 includes: ST-71 8 ST-720 ST-722 ST-723 60.5 45.1 3 1 08.4 234.63 249.33 129.24 1 49.91 84.1 1 7 72 1 68 1 90.35 1 37 1 .64 71 74.5 63.5 1 2.27 1 248 257.34 13.32 1 0.61 4.69 1 2.58 2 1 .47 26.75 2.42 14 1 8.37 3.87 1 3.37 8.01 0.79 0.93 0.92 0.01 0.09 0.1 5 0.24 0.45 11 .1 1.23 1 .04 0.02 0.09 0.1 4 0.87 72.47 36.5 5.8 4.1 9 1 .35 1 1 34.78 22.57 56.5 58.18 46.35 54.2 2.41 69.38 1 6 0.43 0.1 6 0.03 0.74 2.26 0.41 0.33 0.32 0.23 0.2 0.1 1 0.1 2 0.35 2.36 7.54 3.82 0.91 0.1 1 0.1 3 4.99 2.31 7.1 4 5.02 4.47 2.39 0.1 8 0.34 0.22 2.48 1 .05 0.39 0.04 0.03 2.1 3 0.83 1 .62 1.8 1 .48 0.88 0.05 0.05 0.02 Main FW Main Main Main FW Main Main From (m) 1 79 1 94.59 To (m) 1 84 1 95.3 Core Length 5 0.71 g/t Au 0.27 0.04 g/t Ag 1 .95 1 22 % Cu 1 .22 0.25 % Zn 0.62 3.93 % Pb 0.1 4 1 .85 Main Main FW Zone

Main FW Main Main Main Main Main

includes: 256.55 257.34 Source: Trevali Mining

Rob Chang, MBA (416) 849-5008

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February 13, 2012

Exhibit 3. Stratmat longitudinal map

Source: Trevali Mining

METALS PRICE FORECAST UPDATE

We have also incorporated our latest commodity price revisions into our model.
Exhibit 4. Versant Commodity Price Forecasts
Previous Assumptions 2010A 2011E 2012E 2013E 2014E 2015E 2016E Long Term Zinc US$/lb $0.98 $1.07 $1.15 $1.15 $1.10 $1.05 $0.95 $0.90 Lead US$/lb $0.97 $1.15 $1.18 $1.12 $1.10 $1.05 $0.95 $0.90 Copper US$/lb $3.42 $4.20 $4.00 $3.85 $3.35 $3.10 $2.75 $2.50 Silver US$/oz $20.20 $34.75 $35.00 $30.00 $27.00 $22.00 $19.00 $16.50 Gold US$/oz $1,224.52 $1,445.00 $1,500.00 $1,300.00 $1,275.00 $1,200.00 $1,150.00 $1,000.00 Current Assumptions 2010A 2011A 2012E 2013E 2014E 2015E 2016E Long Term Zinc US$/lb $0.98 $1.00 $1.00 $1.10 $1.15 $1.30 $1.20 $1.20 Lead US$/lb $0.97 $1.08 $1.05 $1.20 $1.10 $1.05 $0.95 $0.90 Copper US$/lb $3.42 $4.00 $4.00 $3.75 $3.60 $3.50 $2.75 $2.50 Silver US$/oz $20.20 $35.32 $36.00 $37.00 $32.00 $27.00 $21.00 $21.00 Gold US$/oz $1,224.52 $1,572.86 $1,900.00 $2,000.00 $1,600.00 $1,400.00 $1,300.00 $1,300.00 Source: Versant Partners Estimates

VALUATION AND RECOMMENDATION

Due to the imminent completion of Trevalis transition into producer from developer, we are raising our recommendation to BUY from Buy (Speculative). While developments for Trevali are certainly positive, the dilution from the financings in late 2011 (a 63% share count increase from our previous modelled estimate) and the application of a lower P/NAV multiple has offset the positive impact of the reduced timeline to production and higher metals price assumptions.

Rob Chang, MBA (416) 849-5008

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Exhibit 5. Trevali Mining - 10% NAV

Trevali Mining
Net Asset Value
(C$ thousands, unless otherwise indicated)

Mining Assets
CDN$ 000s Halfmile Santander Tingo Hydro Facility Ruttan/Other Exploration Total Mining Assets $276,653 $243,055 $10,000 $9,300 $539,008

Financial Assets
CDN$ 000s Cash Working Capital (net of Cash) Long-Term Debt Proceeds from ITM Instruments Net Asset Value Shares Outstanding (M) NAV/sh Fully-diluted shares outstanding NAV per share (C$/share) Current share price (C$/share) Price / NAV $15,000 ($9,666) ($3,585) $29,000 $30,750 $569,758 148,000 $3.85 177,000 $3.22 $1.41 0.44x

CDN$

(1) Financial assets are as of last reported Financial Statements Sept 30, 2011 with adjustments made for recent capital raise

Source: Versant Partners

Our 10% NAV decreases to $3.85 per share from $3.95 per share, or by 2.5%. Our P/NAV valuation multiple has decreased to 0.6x from 0.9x to reflect the peer group average (see exhibit 4). As a result we are decreasing our target price to $2.30 per share from $4.00 per share, which reflects a decrease of 43%. Trevali currently trades at a 0.44x P/NAV multiple, which we believe will expand to at least be in line with its peer groups 0.6x P/NAV multiple. Moreover, since Trevali is a rare, highly-levered zinc play we argue that it deserves a premium multiple once it achieves nameplate production at its two mines.

Rob Chang, MBA (416) 849-5008

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February 13, 2012

Exhibit 6. Peer group P/NAV

.9x .8x .7x .6x .5x .4x .3x .2x .1x .x

.8x

.8x

.8x .7x .7x

0.6x
.5x .4x .4x .2x

HGM

TCM

LUN

AVN

IMN

QUX

TCK.B

TV

HMG

Source: Versant Partners, Bloomberg

Rob Chang, MBA (416) 849-5008

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APPENDIX A: OPERATIONAL SUMMARY

2011E T onnes Milled (000's) Halfmile Stratmat Santander Total Trevali Mining Zinc Production (000s lbs) Halfmile Stratmat Santander Total Trevali Mining Lead Production (000s lbs) Halfmile Stratmat Santander Total Trevali Mining Copper Production (000s lbs) Halfmile Stratmat Santander Total Trevali Mining Silver Production (000s oz) Halfmile Stratmat Santander Total Trevali Mining Gold Production (000s oz) Halfmile Stratmat Santander Total Trevali Mining Revenue by Metal (%) Zinc Lead Copper Operating Cost Per T onne of Ore Milled Halfmile Stratmat Santander Operating Cost $ Zn/lb (net of credits) Halfmile Stratmat Santander EBIT DA $ (000s) Halfmile Stratmat Santander Total Trevali Mining Free Cash Flow $ (000s) Halfmile Stratmat Santander Total Trevali Mining ($26,832) ($1 5,000) ($41 ,832) ($1 2,976) $1 3,748 $772 ($5,01 0) $68,232 $63,222 ($63,974) $63,223 ($751 ) $97,325 $63,597 $1 60,922 $97,992 $32,839 $1 30,831 ---$27,663 $48,877 $76,540 $41 ,431 $1 0,849 1 $1 52,280 $1 67,573 $1 02,553 $270,1 26 $1 76,855 $1 02,903 $279,758 $1 44,594 $52,990 $1 97,584 --$0.53 ($0.1 7) $0.51 ($0.23) $0.24 ($0.08) $0.33 $0.07 $0.40 $0.56 --$80.00 $59.01 $80.00 $60.83 $62.00 $61 2 .1 $62.00 $62.52 $62.00 $56.62 55% 37% 8% 53% 41 % 5% 62% 32% 5% 67% 29% 4% 74% 22% 4% ---------------------327.50 822.47 1 49.96 ,1 389.72 1 ,644.93 2,034.65 1 ,994.86 1 ,644.93 3,639.79 1 ,983.56 1 ,644.93 3,628.49 1 ,983.56 91 5 0.1 2,893.70 ---2,744 -2,744 3,265 -3,265 1 ,927 -1 ,927 1 ,832 -1 ,832 1 ,832 -1 ,832 ---1 9,020 1 36 9,1 38,1 56 22,634 38,272 60,906 54,670 38,272 92,942 54,01 4 38,272 92,286 54,01 4 1 6,226 70,240 ---62,288 41 ,664 1 03,952 74,1 23 83,328 1 57,451 1 89,51 9 83,328 272,847 1 87,369 83,328 270,698 1 87,369 83,328 270,698 600 -600 71 4 720 1 ,434 1 ,449 1 ,440 2,889 1 ,428 1 ,440 2,868 1 ,428 1 ,440 2,868 1 ,399 1 ,440 2,839 2012E 2013E 2014E 2015E 2016E

Rob Chang, MBA (416) 849-5008

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DISCLAIMERS AND DISCLOSURES

Disclaimers
The opinions, estimates and projections contained in this report are those of Versant Partners Inc. (Versant) as of the date hereof and are subject to change without notice. Versant makes every effort to ensure that the contents have been compiled or derived from sources believed to be reliable and that contain information and opinions that are accurate and complete; however, Versant makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained herein and accepts no liability whatsoever for any loss arising from any use of or reliance on this report or its contents. Information may be available to Versant that is not herein. This report is provided, for informational purposes only, to institutional investor clients of Versant Partners Inc. Canada, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited. This report is issued and approved for distribution in Canada, Versant Partners Inc., a member of the Investment Industry Regulatory Organization of Canada ("IIROC"), the Toronto Stock Exchange, the TSX Venture Exchange and the CIPF. This report is has not been reviewed or approved by Versant Partners USA., a member of FINRA. This report is intended for distribution in the United States only to Major Institutional Investors (as such term is defined in SEC 15a-6 and Section 15 of the Securities Exchange Act of 1934, as amended) and is not intended for the use of any person or entity that is not a major institutional investor. Major Institutional Investors receiving this report should effect transactions in securities discussed in the report through Versant Partners USA.

Potential conflicts of interest

The author of this report is compensated based in part on the overall revenues of Versant, a portion of which are generated by investment banking activities. Versant may have had, or seek to have, an investment banking relationship with companies mentioned in this report. Versant and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned herein as principal or agent. Although Versant makes every effort possible to avoid conflicts of interest, readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies.

Disclosures as of February 13, 2012

Versant has not provided investment banking services or received investment banking related compensation from Trevali Mining Ltd within the past 12 months. The analyst responsible for this research report does not have, either directly or indirectly, a long or short position in the shares or options of Trevali Mining The analyst responsible for this report has not visited the material operations of Trevali Mining

Analyst certification
The research analyst whose name appears on this report hereby certifies that the opinions and recommendations expressed herein accurately reflect his personal views about the securities, issuers or industries discussed herein.

Definitions of recommendations
BUY: The stock is attractively priced relative to the companys fundamentals and we expect it to appreciate significantly from the current price over the next 6 to 12 months.

BUY (Speculative): The stock is attractively priced relative to the companys fundamentals, however investment in the security carries a higher degree of risk.
NEUTRAL: The stock is fairly valued, lacks a near term catalyst, or its execution risk is such that we expect it to trade within a narrow range of the current price in the next 6 to 12 months. The longer term fundamental value of the company may be materially higher, but certain milestones/catalysts have yet to be fully realized. SELL: The stock is overpriced relative to the companys fundamentals, and we expect it to decline from the current price over the next 6 to 12 months. TENDER: We believe the offer price by the acquirer is fair and thus recommend investors tender their shares to the offer. UNDER REVIEW: We are temporarily placing our recommendation under review until further information is disclosed. Member-Canadian Investor Protection Fund Customers' accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request.

Rob Chang, MBA (416) 849-5008

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