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• TM announced its operational highlights for Q3 ending Dec 31st.
• The Company reported its first operational profit, albeit small, setting itself up for a big year in 2024 as the underground comes online.
• TM announced plans to spin-out its Moroccan assets, namely the Silver Hill and Addana projects.
• Earlier this week, we interviewed management, watch it here.
• We expect the Feasibility Study to be reported in the coming weeks.
This morning, Trigon Metals Inc. (TM:TSXV) announced its operational and financial highlights for its fiscal Q3/24, ending December 31, 2023. The Company reported its first operational profit but, more importantly, a full quarter of successful production. The operation experienced some challenges that resulted in minor misses on tonnes and grade processed, but ultimately, we consider this a success as it was the Company’s first full quarter of mining. We reminder readers that we have modelled zero production from Kombat in calendar 2023. TM has set itself up to have a profitable year as it navigates start up tribulations and begins production from the underground, well ahead of schedule. We are maintaining our BUY rating and C$0.60/share target price on TM.
The Company reported an operating profit of $581K in Q3 and $474K for the nine months ending December 31 along with a net loss in Q3 of $8.1M and $14.9M for the nine months. The losses were mainly due to non-cash accretion of the Sprott stream advances and $7.7M and $12.4M depreciation of PP&E for Q3 and nine months, respectively. Trigon fell just shy of its production and grade targets, processing 81.5Kt of ore at a grade of 0.95% Cu vs. the planned 87.0Kt at a grade of 1.2% Cu. The miss was attributable to a mine contractors shovel going down and consequently exposing grade control issues when attempting to make up for the lost time. The Company has remedied these issues and taken steps to mitigate production misses if unexpected equipment issues arise.
Due to the miss on processed tonnes and grade, cash costs were above expectations coming in at $3.96/lb compared to the planned $3.37/lb. Despite the result being negative, this is a relatively good outcome considering the equipment downtime and it being the first full quarter of production. We believe costs could be reduced below the plan of $3.37/lb with a full quarter of minimal issues and especially with the addition of the high-grade underground ore, coming next month, and higher-grade open pit ore as mining has moved to the ore capping pit.
TM: Production & Financial Highlights for Q3
What you need to know:• TM announced its operational highlights for Q3 ending Dec 31st.
• The Company reported its first operational profit, albeit small, setting itself up for a big year in 2024 as the underground comes online.
• TM announced plans to spin-out its Moroccan assets, namely the Silver Hill and Addana projects.
• Earlier this week, we interviewed management, watch it here.
• We expect the Feasibility Study to be reported in the coming weeks.
This morning, Trigon Metals Inc. (TM:TSXV) announced its operational and financial highlights for its fiscal Q3/24, ending December 31, 2023. The Company reported its first operational profit but, more importantly, a full quarter of successful production. The operation experienced some challenges that resulted in minor misses on tonnes and grade processed, but ultimately, we consider this a success as it was the Company’s first full quarter of mining. We reminder readers that we have modelled zero production from Kombat in calendar 2023. TM has set itself up to have a profitable year as it navigates start up tribulations and begins production from the underground, well ahead of schedule. We are maintaining our BUY rating and C$0.60/share target price on TM.
The Company reported an operating profit of $581K in Q3 and $474K for the nine months ending December 31 along with a net loss in Q3 of $8.1M and $14.9M for the nine months. The losses were mainly due to non-cash accretion of the Sprott stream advances and $7.7M and $12.4M depreciation of PP&E for Q3 and nine months, respectively. Trigon fell just shy of its production and grade targets, processing 81.5Kt of ore at a grade of 0.95% Cu vs. the planned 87.0Kt at a grade of 1.2% Cu. The miss was attributable to a mine contractors shovel going down and consequently exposing grade control issues when attempting to make up for the lost time. The Company has remedied these issues and taken steps to mitigate production misses if unexpected equipment issues arise.
Due to the miss on processed tonnes and grade, cash costs were above expectations coming in at $3.96/lb compared to the planned $3.37/lb. Despite the result being negative, this is a relatively good outcome considering the equipment downtime and it being the first full quarter of production. We believe costs could be reduced below the plan of $3.37/lb with a full quarter of minimal issues and especially with the addition of the high-grade underground ore, coming next month, and higher-grade open pit ore as mining has moved to the ore capping pit.
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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