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• Trigon reported results from the Feasibility Study on the Kombat Open Pit and Asis West Underground, confirming expectations.
• TM also announced a Mineral Resource and Reserve update for its Kombat Mine, reporting its first underground probable reserves.
• By way of resource conversion, new exploration, and the implementation of the Asis Far West Underground, TM still has substantial upside from what is depicted in the FS.
• Last week we interviewed management, watch it here.
This morning, Trigon Metals Inc. (TM:TSXV) announced the results of the feasibility study (FS) on its Kombat Asis West underground mine as well as the currently operating open pit mine (Table 1). Coinciding with this release, the Company reported a mineral resource and reserve update (Tables 2-5). The FS met expectations as it only includes ‘Probable Mineral Reserves’ highlighting just 5.8 years of mine life but confirming underground resources will continue to convert to reserves at a high percentage, increasing our confidence that the operation will continuously grow year over year as it converts the substantial resource to reserves.
Beyond the low cost, high ROI operation that is depicted in this announcement, we are mostly satisfied by the confirmation around the strong economics of the underground operation (previously unconfirmed by an economic study). Additionally, we like that upside exists through the substantial underground resource (not included in today’s FS) both at the soon-to-be mined Asis West deposit, the Asis Far West (historical resource, Table 6), and future open pit and underground exploration. We are maintaining our BUY rating and increasing our target price to C$0.70/share (previously C$0.60/share) on TM.
Today’s FS combined the open pit and Asis West underground probable reserves and depicts a 5.8-year mine life, mining 120Mlbs of Cu at an average grade of 2.46% (blended open pit and underground). Mining costs are competitive considering the elevated inflation over the last two years, depicting a cash cost of $2.2/lb and AISC of $2.3/lb. As highlighted in Table 1, the FS reported an after-tax project NPV using a high discount rate of 10% at $77.8M and an IRR of 235%. We note to readers that this FS uses just the probable mineral reserves, which only make up ~13% of the overall reserve + resource. This means that as resources are further drilled and upgraded, the mine life will be extended, throughput increased, and ultimately the NPV of the project will increase drastically.
TM: Positive Feasibility Study + Updated Resource/Reserve
What you need to know:• Trigon reported results from the Feasibility Study on the Kombat Open Pit and Asis West Underground, confirming expectations.
• TM also announced a Mineral Resource and Reserve update for its Kombat Mine, reporting its first underground probable reserves.
• By way of resource conversion, new exploration, and the implementation of the Asis Far West Underground, TM still has substantial upside from what is depicted in the FS.
• Last week we interviewed management, watch it here.
This morning, Trigon Metals Inc. (TM:TSXV) announced the results of the feasibility study (FS) on its Kombat Asis West underground mine as well as the currently operating open pit mine (Table 1). Coinciding with this release, the Company reported a mineral resource and reserve update (Tables 2-5). The FS met expectations as it only includes ‘Probable Mineral Reserves’ highlighting just 5.8 years of mine life but confirming underground resources will continue to convert to reserves at a high percentage, increasing our confidence that the operation will continuously grow year over year as it converts the substantial resource to reserves.
Beyond the low cost, high ROI operation that is depicted in this announcement, we are mostly satisfied by the confirmation around the strong economics of the underground operation (previously unconfirmed by an economic study). Additionally, we like that upside exists through the substantial underground resource (not included in today’s FS) both at the soon-to-be mined Asis West deposit, the Asis Far West (historical resource, Table 6), and future open pit and underground exploration. We are maintaining our BUY rating and increasing our target price to C$0.70/share (previously C$0.60/share) on TM.
Today’s FS combined the open pit and Asis West underground probable reserves and depicts a 5.8-year mine life, mining 120Mlbs of Cu at an average grade of 2.46% (blended open pit and underground). Mining costs are competitive considering the elevated inflation over the last two years, depicting a cash cost of $2.2/lb and AISC of $2.3/lb. As highlighted in Table 1, the FS reported an after-tax project NPV using a high discount rate of 10% at $77.8M and an IRR of 235%. We note to readers that this FS uses just the probable mineral reserves, which only make up ~13% of the overall reserve + resource. This means that as resources are further drilled and upgraded, the mine life will be extended, throughput increased, and ultimately the NPV of the project will increase drastically.
Underlying
TRIGON METALS INC.
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Atrium Research Corporation
Atrium Research provides institutional quality issuer paid research on North American public equities using deep fundamental analysis. Our research reports are disseminated through Bloomberg, FactSet, Capital IQ, Reuters and many more, as well as through our social media and email distribution lists.
Ben Pirie
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