Trigon Announces Improved PEA and Updated Mineral Resource Estimate and Fulfils Conditions FOR Second Tranche of Private Placement Financing
TRIGON ANNOUNCES IMPROVED PEA AND UPDATED MINERAL RESOURCE ESTIMATE AND
FULFILS CONDITIONS FOR SECOND TRANCHE OF PRIVATE PLACEMENT FINANCING
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
KEY RESTART HIGHLIGHTS
• Updated and i mproved PEA NPV of estimated US$86.7 million with highly attractive
internal rate of return of 98.6%.
• Forecast open pit production of approximately 4,000 tonnes of copper per annum, at an
average C1 cash cost of US$1.32/CuEq tonne over the life of mine of Kombat.
• Upgraded NI 43- 101 Mineral Resource estimate for the open pit portion of the Kombat
Mine of 1.529 million tonnes of Indicated Mineral Resources at a grade of 1 .14% copper,
0.72% lead and 2.88 g/t silver and 1.654 million tonnes of Inferred Mineral Resources at a
grade of 1.38% copper, 1.82% lead and 2.12 g/t silver.
• Increase in NI 43- 101 Mineral Resource estimate for the underground portion of the
Kombat Mine to 3.929 million tonnes of Inferred Mineral Resources at a grade of 3.72 %
copper, 1.03% lead and 31.29 g/t silver.
• Environmental Impact Assessment completed for stakeholder comments and application
for environmental permitting to be made in February 2018.
• Feasibility study to be completed by May 2018.
• Fulfilment of conditions precedent to close the second tranche of the previously
announced private placement for gross proceeds of $1,500,000.
Toronto, Canada – February 6, 2018 – Trigon Metals Inc. (TSX-V: TM) (“Trigon” or the “Company”)
is pleased to announce an updated Mineral Resource estimate for its Kombat Mine located in
northern Namibia of 1.529 million tonnes of Indicated Mineral Resources at a grade of 1 .14%
copper, 0.72% lead and 2.88 g/t silver and 5.583 million tonnes of Inferred Mineral Resources at a
grade of 3.02% copper, 1.26% lead and 22.65 g/t silver (the “Updated Mineral Resource
Estimate”).
Stephan Theron, President and CEO of Trigon, commented: “ We are extremely pleased with such
a positive start to the new year, and rem ain on target to achieve production within the year.
Commodity markets continue to forecast bullish prices and we look forward to Trigon participating
in this upside.”
In aggregate, the U pdated Mineral Resource Estimate is c omprised of the surface accessible
(targeted open pit) Mineral Resources of 1.529 million tonnes of Indicated Mineral Resources at a
grade of 1.14% copper, 0.72% lead and 2.88 g/t silver and 1.654 million tonnes of Inferred Mineral
Resources at a grade of 1.38% copper, 1. 82% lead and 2.12 g/t silve r, a nd the underground
Mineral Resources of 3.929 million tonnes of Inferred Mineral Resources at a grade of 3.72%
copper, 1.03% lead and 31.29 g/t silver, as further presented in the tables below.
The Updated Mineral Resource Estimate has been defined using the results of the drilling program
undertaken by the Company in 2017. The program was focused on the Kombat Central and East
targeted open pit areas with 48 holes for an aggregate of 2,179 meters drilled. The primary aim of
the drilling program was to upgrade the targeted open pit Mineral Resources from the Inferred
category to Measured and Indicated Mineral Resources categories.
The Company still plans to undertake additional drilling with the goals of : (i) increas ing the open
pit Mineral Resource within the current pit boundaries, (ii) drill ing the gap between the Central
and East pits, which is outside of the existing pit boundaries, and (iii) test ing potential to the north
and west of these areas. The three phase dr illing program to extend the current open pit Mineral
Resource comprises a further 34 holes, with an aggregate of 1,437 meters to be drilled.
Updated Mineral Resource Estimate
The Updated Mineral Resource E stimate, as presen ted in detail in Table s 1, 2 and 3 below, has
been prepared and classified by Minxcon (Pty) Ltd (“Minxcon”) in accordance with the reporting
guidelines as set out in National Instrument 43 -101 - Standards of Disclosure for Mineral Projects
(“NI 43- 101”) as required by the Canadian Sec urities Administrators. A technical report will be
filed under the Company’s profile on SEDAR within 45 days of this press release. For further
information with respect to the key assumptions, parameters, risks, the mineral resource
estimate, data verific ation, QA/QC and other technical information with respect to the Kombat
Mine, please refer to the technical report, when available.
Table 1 below is a summary of the Update d Mineral Resource Estimate for the open pit areas
(Kombat and Gross Otavi) as at January 28, 2018.
The previous Mineral Resource Estimate for the open pit areas (Kombat and Gross Otavi) as at
April 2017, was an Inferred Mineral Resource of 3.053 million tonnes grading 1.54% copper, 1.35%
lead and 2.98 g/t silver, at a cut-off grade of 0.77% copper equivalent.
Table 1 – Updated Mineral Resource Estimate as at January 28, 2018 – open pit
Open pit (Kombat 0.60 % CuEq cut off & Otavi 0.77 % CuEq cut off)
Mine Resource Class Section Tonnes
(Mt)
Density
(t/m
3
)
Cu (%) Pb (%) Ag (ppm) Cu
(tonnes)
Pb
(Tonnes)
Ag
(kg)
Kombat Indicated East 0.951 2.82 1.03 0.92 1.01 9,806 8,721 961
Kombat Indicated Central 0.578 2.81 1.32 0.41 5.96 7,623 2,341 3,440
Kombat Indicated West
Total Indicated 1.529 2.82 1.14 0.72 2.88 17,428 11,062 4,401
Kombat Inferred East 0.318 2.81 0.91 0.42 1.87 2,888 1,322 593
Kombat Inferred Central 0.264 2.82 1.29 0.61 5.70 3,412 1,612 1,508
Kombat Inferred West 0.357 2.88 2.75 2.61 2.22 9,801 9,326 791
Kombat
(total)
Inferred 0.939 2.84 1.71 1.31 3.08 16,101 12,260 2,892
Otavi Inferred Total 0.715 2.84 0.93 2.50 0.85 6,673 17,837 607
Total Inferred Total 1.654 2.84 1.38 1.82 2.12 22,774 30,097 3,498
Open pit Total 3.182 2.83 1.27 1.31 2.47 40,202 41,158 7,899
Notes
1. Historical mine voids have been depleted from the Mineral Resource.
2. Historical mine voids were not available for Gross Otavi so the tonnage has been reduced by
1% for historical mining.
3. Additional 7.5% porosity factor has been applied to Gross Otavi for the karst voids.
4. The open pit Mineral Resource is declared to a depth of 150m with a CuEq cut off of 0.60% at
Kombat and 0.77% at Gross Otavi.
5. Densities for the hard rock material have been modelled.
6. A geological loss of 10% has been applied to the Indicated Mineral Resource, and of 15% to
the Inferred Mineral Resource.
7. The cut-off for the East and Central pit Updated Mineral Resource Estimate is based on a
copper price of US$8,535/tonne. The previous Mineral Resource Estimate was based on a
copper price of US$7,111/tonne.
8. All reported Mineral Resources are limited to fall within the property boundaries of the project
area.
9. Columns may not add up due to rounding.
10. Inferred Mineral Resources have a large degree of uncertainty as to their existence and
whether they can be mined economically. It cannot be assumed that all or any part of the
Inferred Mineral Resource will be upgraded to a higher confidence category.
11. There are no known environmental, permitting, legal, title, taxation, socio -economic, political,
marketing or other relevant factors that could materially affect the above estimate of mineral
resources.
Table 2 below is a summary of the Updated Mineral Resource Estimate for the underground areas
at Kombat as at January 28, 2018.
The previous Mineral Resource Estimate for the underground areas at Kombat as at April 2017,
was an Inferred Mineral Resource of 3.851 million tonnes grading 3.75% coppe r, 1.00% lead and
31.86 g/t silver, at a cut-off grade of 1.40% copper equivalent.
Table 2 – Updated Mineral Resource Estimate as at January 28, 2018 – underground
Underground (1.4 % CuEq cut off)
Mine Resource Class Section Tonnes
(Mt)
Density
(t/m
3
)
Cu (%) Pb (%) Ag (ppm) Cu
(tonnes)
Pb
(Tonnes)
Ag (kg)
Kombat Inferred East 0.079 2.86 1.93 2.25 0.71 1,521 1,773 56
Kombat Inferred Central 0.023 2.89 2.23 3.86 8.39 514 890 193
Kombat Inferred West 0.104 2.91 2.79 4.15 3.27 2,899 4,307 339
Kombat Inferred Total 0.206 2.89 2.40 3.39 2.86 4,934 6,971 588
Asis Inferred West 2.641 2.88 3.94 1.22 31.65 104,122 32,325 83,592
Asis Inferred Far West 1.082 2.85 3.42 0.10 35.81 37, 000 1,036 38,763
Asis Inferred Total 3.723 2.87 3.79 0.90 32.86 141, 122 33,361 122,355
Underground Total 3.929 2.87 3.72 1.03 31.29 146,056 40,331 122,943
Notes
1. Historical mine voids have been depleted from the Mineral Resource.
2. The underground Mineral Resource (below 150m) is declared at a CuEq cut off of 1.4%.
3. Densities for the hard rock material have been modelled.
4. A geological loss of 15% has been applied to the Inferred Mineral Resource.
5. All reported Mineral Resources are limited to fall within the property boundaries of the project
area.
6. Columns may not add up due to rounding.
7. Inferred Mineral Resources have a large degree of uncertainty as to their existence and
whether they can be mined economically. It cannot be assumed that all or any part of the
Inferred Mineral Resource will be upgraded to a higher confidence category.
8. There are no known environmental, permitting, legal, title, taxation, socio -economic, political,
marketing or other relevant factors that could materially affect the above estimate of mineral
resources.
Table 3 below is a summary of the Updated Mineral Resource Estimate for the combined o pen pit
and underground areas at Kombat, Asis and Gross Otavi as at January 28, 2018.
The previous combined total Mineral Resource Estimate for Kombat , Asis and Gross Otavi as at
April 2017, was an Inferred Mineral Resource of 6.905 million tonnes grading 2.78% copper, 1.14%
lead and 19.11 g/t silver.
Table 3 – Updated Mineral Resource Estimate as at January 28, 2018 – combined
Combined Open Pit and UG Resource
Mine Resource Class Section Tonnes
(Mt)
Density
(t/m
3
)
Cu (%) Pb (%) Ag
(ppm)
Cu (tonnes) Pb
(Tonnes)
Ag (kg)
Kombat Indicated All 1.529 2.82 1.14 0.72 2.88 17,428 11,062 4,401
Total Indicated Total 1.529 2.82 1.14 0.72 2.88 17,428 11,062 4,401
Kombat Inferred All 1.144 2.85 1.84 1.68 3.04 21,035 19,231 3,480
Otavi Inferred Otavi 0.715 2.84 0.93 2.50 0.85 6,673 17,837 607
Asis Inferred West 2.641 2.88 3.94 1.22 31.65 104,122 32,325 83,592
Asis Inferred Far
West
1.082 2.85 3.42 0.10 35.81 37,000 1,036 38,763
Total Inferred Total 5.583 2.86 3.02 1.26 22.65 168,830 70,428 126,441
Total (Indicated & Inferred) 7.111 2.85 2.62 1.15 18.40 186,259 81,490 130,842
Notes
1. Historical mine voids have been depleted from the Mineral Resource.
2. Historical mine voids were not available for Gross Otavi so the tonnage has been reduced by
1% for historical mining.
3. Additional 7.5% porosity factor has been applied to Gross Otavi for the karst voids.
4. The open pit Mineral Resource is declared to a depth of 150m with a CuEq cut off of 0.60% at
Kombat and 0.77% at Gross Otavi.
5. The underground Mineral Resource (below 150m) is declared at a CuEq cut off of 1.4%.
6. No tailings have been declared at a 0.4% Cu cut off (upside potential at 0.3% Cu cut-off).
7. Densities for the hard rock material have been modelled.
8. A geological loss of 10% has been applied to the Indicated Mineral Resource, and of 15% to
the Inferred Mineral Resource.
9. The cut-off for the East and Central pit Updated Mineral Resource Estimate is based on a
copper price of US$8,535/tonne. The previous Mineral Resource Estimate was bas ed on a
copper price of US$7,111/tonne.
10. All reported Mineral Resources are limited to fall within the property boundaries of the project
area.
11. Columns may not add up due to rounding.
12. Inferred Mineral Resources have a large degree of uncertainty as to their existence and
whether they can be mined economically. It cannot be assumed that all or any part of the
Inferred Mineral Resource will be upgraded to a higher confidence category.
13. There are no known environmental, permitting, legal, title, taxation, socio -economic, political,
marketing or other relevant factors that could materially affect the above estimate of mineral
resources.
Feasibility Study
As previously announced by the Company, t he Updated Mineral Resource Estimate will form the
basis for a feasibility study, including a feasibility analysis on the surface mining areas and a pre -
feasibility design on the Asis Far West underground mine.
The feasibility study was initiated in January 2018 and is anticipated to take approximately five
months to complete. During this time, the Company intends to commence with the refurbishment
of the mill and concentrator to facilitate timelines for commencement of open pit mining and the
processing of ore therefrom.
The Company does not currently have a feasibility study in respect of the Kombat M ine and
production restart activities are based on internal management forecasts.
Updated PEA
In conjunction with the Updated Mineral Resource Estimate, the Company has also updated the
financial model used in the Co mpany’s preliminary economic assessment (“PEA”) which is
summarized within the Company’s National Instrument 43-101 compliant technical report entitled
“NI 43-101 Technical Report on the Kombat Copper Project, Namibia” dated May 31, 2017 (the
“Updated PEA” ). The technical report is available under the Company’s profile on SEDAR at
www.sedar.com and on the Company’s website at www.trigonmetals.com . The Updated PEA will
be included in the Company’s new technical report which will be filed under the Company’s profile
on SEDAR within 45 days of this press release.
The Updated PEA has been based on the Updated Mineral Resource Estimate as set out above,
and incorporates current forecast commodity prices , results of metallurgical testing undertaken in
2017 and offtake terms for copper concentrate as agreed with a major international trading house
as announced on October 26, 2017. All other assumptions used in the PEA , including capital
expenditure and operating costs, remain unchanged at this stage.
Using the discounted cash flow method to calculate the net present value (“NPV”) in real terms,
the Kombat operations are projected to have a n improved estimated NPV of US$86.7 million at a
real discount rate of 10.92%, a payback period of 3.4 years and a highly attractive internal rate of
return of 98.6%.
The combined open pits and underground mines have a potential life of mine (“LoM”) of eight
years mining 4,071 kt at an average mined grade of 2.84% copper as set out in the table below.
Item Unit Updated PEA
Ore Tonnes Mined kt 4,071
Average Cu Grade Mined % 2.84%
Average Pb Grade Mined % 1.00%
Average Ag Grade Mined g/t 21.85
Total Cu Concentrate kt 361
Total Pb Concentrate kt 22
Total Cu Metal Recovered kt 105
Total Pb Metal Recovered kt 13
Total Ag Metal Recovered koz 2,385
LoM Years 8
The following commodity price forecasts have been used in the Updated PEA.
Item Unit 2019 2020 2021 2022 2023 Long
term
Silver US$/oz 17.61 17.61 17.61 17.61 17.61 17.61
Copper US$/tonne 6,578 6,527 6,653 6,581 6,464 6,551
Copper US$/lb 2.98 2.96 3.02 2.99 2.93 2.97
Lead US$/tonne 2,419 2,225 2,073 2,035 1,975 1,966
Lead US$/lb 1.10 1.01 0.94 0.92 0.90 0.89
The turnover, cost and earnings numbers are displayed in the tables below per recovered copper
equivalent pound.
Item Unit Updated PEA
Copper Equivalent Tonnes Tonnes 107,237
Net Turnover US$/CuEq lb 2.98
Mine Cost US$/CuEq lb 0.62
Plant Costs US$/CuEq lb 0.21
Other Costs US$/CuEq lb 0.50
Direct Cash Costs (C1) US$/CuEq lb 1.32
Capex US$/CuEq lb 0.35
Production Costs (C2) US$/CuEq lb 1.67
Royalties US$/CuEq lb 0.08
Corporate Overheads US$/CuEq lb 0.05
All-in Sustainable Costs (C3) US$/CuEq lb 1.81
EBITDA US$CuEq lb 1.52
The Updated PEA is preliminary in nature, and includes inferred Mineral Resources that are
considered too speculative geologically to have the economic considerations applied to them
that would enable them to be categorized as Mineral Reserves . There is no certainty that the
results of the Updated PEA will be realized.
A further update of the Updated PEA will be undertaken as part of the feasibility study referred to
above.
Environmental Permitting
The Environmental Impact Assessment reports, including required specialist studies and an
Environmental Management Plan, have been prepared and made available to stakeholders for
comment until February 23, 2018. The Company will then apply to secure the Environmental
Clearance Certificate required for open pit mining and associated activities . An application for the
permitting needed for exploration activities for underground mining will be made once comments
from stakeholders have been received and appropriately addressed.
Private placement financing
On December 19, 2017, Trigon announced a strategic investment by investors introduced to the
Company by Forbes & Manhattan Resources Inc. (“Forbes”) pursuant to a private placement
financing of up to 5,714,285 units (the “Units”) in two tranches, at a price of $0.35 per Unit , for
gross proceeds of up to $2,000,000 (the “Offering”).
Each Unit consists of one common share of the Company (a “Share”) and one common share
purchase warrant (a “Warrant”). Each Warrant entitles the holder thereof to acquire one Share at
a price of $0.50 for a period of 24 months following the closing date of the relevant tranche ,
subject to an acceleration provision whereby in the event that at any time after the expiry of the
statutory hold period, the Shares trade at $1.00 or higher on the TSX Venture Exchange (on an
average trading volume of not less than 200,000 Shares per day) for a period of 20 consecutive
days, the Company shall have the right to accelerate the expiry date of the Warrants to the date
that is 30 days after the Company issues a news release announcing that it has elected to exercise
the acceleration right.
The first tranche of the Offering was closed on January 15, 2018 for aggregate gross proceeds of
$500,000.
The second tranche of the Offering (the “Second Tranche”) , for gross proceeds of $1,500,000, wa s
conditional on the Company completing the Updated Mineral Resource Estimate and the Updated
PEA. The conditions to the Second Tranche have now been fulfilled and the Second Tranche is
expected to close on or before February 15, 2018 , subject to final ap proval of the TSX Venture
Exchange. The securities issued pursuant to the Second Tranche will be subject to a four month
and one day statutory hold period.
The Company intends to use the net proceeds from the Second Tranche for preparation of the
feasibility study referred to above , exploration and development of the Kombat mine, to secure
equipment for the refurbishment of the existing mill and concentrator at the Kombat mine and for
working capital and general corporate purposes.
Following the completion of the First and Second Tranches, if the Company completes a private
placement financing for gross proceeds of at least $1,000,000 on or before April 30, 2018 with
investors introduced to the Company by Forbes, Forbes shall be entitled to rec eive a production
payment related to the Company’s Namibian open pit mining operations (the “Production
Payment”). The Production Payment will be calculated as 0.5% of net smelter returns related to
the Company’s Namibian open pit mining operations. The Pr oduction Payment will be payable on
a quarterly basis from commencement of production from the Kombat mine open pit until
depletion of the open pit resource as described in the Updated Resource Estimate or any future
increases thereof.
Qualified Person
Mr. Uwe Engelmann (BSc (Zoo. & Bot.), BSc Hons (Geol.), Pr.Sci.Nat. No. 400058/08, MGSSA) of
Minxcon, is a "qualified person" as such term is defined in NI 43 - 101 and has reviewed and
approved the technical information and data included in this press rele ase. As a director of
Minxcon, Mr. Engelmann is considered independent.
Trigon Metals Inc.
Trigon is a publicly traded Canadian exploration and development company with its core business
focused on copper operations in Namibia, one of the world’s most p rospective copper regions,
where it has substantial assets in place with significant upside. The Company continues to hold an
80% interest in five mining licenses in the Otavi Mountain lands, an area of Namibia widely
recognized for its high -grade copper deposits. Within these licenses are three past producing
mines including the Company’s flagship property, the Kombat Mine.
For further information, contact:
Blake Hylands
Investor Relations +1 (416) 216 5445
Email: [email protected]
Website: www.trigonmetals.com
Cautionary Notes
This news release may contain forward- looking statements. These statements include statements
regarding the estimated mineral resources in the Updated Mineral Resource Estimate, the projections
in the Updated PEA, the Company’s ability to complete the feasibility study, the Company’s strategies
and the Company’s abilities to execute such strategies, the Company’s ability to restart the Kombat
Mine, the Company’s ability to complete the Second Tranche, the Company’s ability to obtain adequate
financing, the Company’s expectations for the Kombat Mine, the economic viability of mining at the
Kombat Mine, the timing of completion of the technical rep ort, the results of the technical report and
the Company’s future plans and objectives. These statements are based on current expectations
and assumptions that are subject to risks and uncertainties . Actual results could differ materially
because of factors discussed in the management discussion and analysis section of our interim and
most recent annual financial statements or other reports and filings with the TSX Venture
Exchange and applicable Canadian securities regulations. We do not assume any obligat ion to
update any forward-looking statements, except as required by applicable laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.