Trigon Metals Inc V.TM

Alternate Symbol(s): PNTZF

Metals & Mining Copper

Trigon Metals Inc. is a Canada-based exploration and development company. The Company is focused on copper and silver holdings in mine-friendly African jurisdictions. The Company has operations in Namibia and Morocco. In Namibia, it holds an 80% interest in five mining licenses in the Otavi Mountainlands, an area of Namibia generally recognized for its high-grade copper deposits, where the Company is focused on exploration and re-development of the producing Kombat Mine. In Morocco, it is the holder of the Silver Hill and Addana projects, highly prospective copper and silver exploration projects. The Silver Hill is a 16 square kilometers (km2) property located in the Anti-Atlas region. The Kombat Mine is located in the Otavi Mountainland on the Northern Platform Margin of the Damara Orogenic Belt. Its Kalahari Copperbelt Project includes a substantial land package in Namibia with primary Exclusive Prospecting Licenses (EPLs) covering 280 km along the strike of the Kalahari Copper Belt.

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Trigon Metals Inc > WOW !!!! 27 USD= 35 million Canadian CASH injection !!!!

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Comment by personalon Jul 20, 2022 2:59pm

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RE:RE:WOW !!!! 27 USD= 35 million Canadian CASH injection !!!!

MPartners research report - a good one.

We have a Research Flash on Trigon Metals Inc. (TM – TSXV).

This morning, Trigon Metals announced it has entered into a non-binding term sheet with Sprott Resource Streaming and Royalty Corp. and Sprott Mining Inc. for a US$27.5M silver and copper stream for the Kombat Mine in Namibia. We view this news as a major catalyst for the Company as the funds will be used to quadruple production over the next 2-3 years while dramatically reducing costs. We expect the Company to trade at 2x today’s value based on the expected ~C$30M of cashflow in 2024 with peers currently trading at 2.1x 2024E P/CF.

Stream Terms: TM agreed to sell 100% of the silver produced from the Kombat Mine to Sprott with an additional stream of 3.15% of copper produced commencing when phase one underground mining begins and terminating when phase two begins at Asis Far West. The US$27.5M will consist of US$25M from Sprott Streaming, and US$2.5M from Sprott Mining. The US$2.5M (9.1% of the stream) shall set-off against the US$2.5M loan from Sprott Mining announced on May 24^th, 2022. Most importantly Trigon may buy back up to 50% of the Stream in a single cash payment to Sprott Streaming with a pre-determined multiple depending on the year of payment (Table 1).

The Stream significantly de-risks the project as the operation is no longer capital constrained and can begin the various activities planned for operational growth. These growth projects include:

Ramp open-pit drilling – Management feels there remains significant opportunity for open-pit resource growth (drilling is ongoing)
Upgrade the Mill – There exists a bottleneck in the crushing and grinding circuit which will now be upgraded with the new capital
Dewatering – Begin de-watering activities of the underground workings
Underground Fleet – The Company plans to acquire an underground mining fleet as it plans to operate the underground mining inhouse (vs. the current contracted open-pit workforce)
Re-establish Services
Resource Growth – Once the underground is de-watered, TM plans to initiate a large drilling campaign with a focus on growing the high-grade resource substantially

The above growth initiatives combined will allow the Company to ramp production from the current 8 Mlbs of copper concentrate per year to the planned ~30 Mlbs by 2024. In addition, TM has provided production guidance out to 2027 where production will further ramp to ~69 Mlbs/yr. We also note that during this period cash costs are expected to drop from the current range of $3.00-3.50/lb to $1.75-2.00/lb by 2026.

Catalysts: