juniorbullalive wrote: Subject: Trigon Update
Hi all,
Here is an update for Trigon Metals as the shares have fallen off recently but it just makes for an incredible buying opportunity that we likely won’t get again.
Kombat:
Firstly, Trigon plans to ship its first copper concentrate before the end of this month. This is the final stage to prove to the market that Trigon is a producing copper company which is selling product and making revenues (not just exploration).
Within the next couple weeks TM also plans to initiate a drilling campaign at the Kombat mine. This is important as Trigon is still largely an exploration company and the goal is to grow the resource to a size where the current processing plant is too small, and they can justify a new (larger) one. The new plant would bring them from a junior producer into a mid-tier producer where the shares will trade at multiples of what they are today. Additionally, assays will be processed quickly (2-week turnaround) as they have an assay lab on site.
Morocco:
The Silver Hills project will be seeing some news flow in the coming months as they are currently going through a trenching campaign and lining up drill hole targets. The drilling campaign will be initiated in the next month and we anticipate highly promising results based on the success of the last campaign.
Valuation:
We see the true value of Trigon being multiples of what it its today. Below is a basic breakdown of where we see the value for TM.
-Kombat (Mine) $120-150M (Production growing 4x from 2022 to 2024 with revenues in 2024 expected to be over $150M)
-Kombat (resource and exploration) $50M+ The current resource should grow quickly within 2022 as they begin using cashflows from the mine to fund a more sizeable drilling campaign. Additionally, we see high potential of the resource being well over 1B lbs of copper (closer to 2B lbs Cu) once the resource is properly drilled off. Using a 1B lbs Cu resource you could build a project NPV(5%) with a 12-year mine life of $500-700M (which would reflect a 10x in share price if they traded at 1.0x NAV).
-Morocco: ~$15M – the project is still early stage but promising results so far. If results continue as expected, you could justify $0.25/sh in value of Silver Hills to Trigons overall valuation.
Total: $185M = $1.00-1.25/sh currently, with lots of further upside.