FREE

TM: FY24 Financials Improve with Costs Decreasing

What you need to know:
• Trigon announced its Q4/24 and FY24 financial results marking the completion of a transformational year for the Company.
• With just a small amount of underground production included in the Q4 numbers, costs have already started to decrease with C1 cash costs coming in at $3.31/lb vs. $3.81 for the full fiscal year.
• The failed pump has been replaced and most importantly, mining activities were not affected by the short dewatering issue.
• The Safi-Silver spinout is expected to occur in the next couple of months, marking a good buying opportunity prior to the date of record.

This morning, Trigon Metals Inc. (TM:TSXV) announced its fiscal Q4/24 financial statements for the year ending March 31st, 2024 as well as operational milestones for the quarter. For FY24, the Company reported a revenue of $9.6M, operating cash flow (before working capital) of ($4.1M), and a C1 cash cost of $3.81/lb. This compares to fiscal Q4 where financials and costs have improved significantly with revenue of $3.9M, operating cash flow of ($2.1M), and C1 cash costs of $3.31/lb (Figure 1). We are pleased with today’s release as it closes out a year of many milestones for Trigon including, starting the opening pit mine, commissioning the mill, and beginning underground operations in the last month of the fiscal year. FY24 has set Trigon up for its first full year of production from the highly profitable underground where we are already seeing production ramp and costs decreasing. We are maintaining our BUY rating and target price of C$3.50/share on TM.

As mentioned in more detail below, on July 29th, TM announced it had successfully addressed the dewatering issue by replacing the failed pump. We view the recent pullback in the stock as a buying opportunity given mining and processing activities were unaffected by this issue and dewatering is back on track.

As a reminder, Trigon has already reported its underground production highlights for April and May of this year with 16.5Kt of Cu produced at 2.11% Cu and 29.7Kt at 2.16% Cu in April and May, respectively. This highlights the ongoing scaleup of the underground operations and the coming increases in copper production and cost reduction going forward (Figure 2). The Company plans to report its FYQ1/25 results in the coming weeks which we view as a major catalyst with this being the first quarter with a material percentage of production coming from the underground.