Trigon Metals Announces Strategic Investment and Provides Update ON Project Restart Activities and Project Financing
TRIGON METALS ANNOUNCES STRATEGIC INVESTMENT AND PROVIDES UPDATE ON PROJECT
RESTART ACTIVITIES AND PROJECT FINANCING
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Toronto, Canada – December 19, 2017 – Trigon Metals Inc. (TSX-V: TM) (“Trigon” or the
“Company”) announces that Forbes & Manhattan Resources Inc. (“Forbes”) and certain other
investors will subscribe to a private placement financing of up to 5 ,714,285 units (the “Units”) at a
price of $0.35 per Unit for gross proceeds of up to $2,000,000 (the “Offering”).
The Offering
Each Unit will be comprised of one common share of Trigon (a “Share”) and one common share
purchase warrant (a “Warrant”). Each Warrant will entitle 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 Offering, 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 a n average
trading volume of not less than 200,000 S hares 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 aft er the Company issues a news release announcing that it has elected to exercise the
acceleration right.
Closing of the Offering is expected to occur in two tranches. The first tranche , for gross proceeds
of $500,000, is expected to close on or about Decem ber 22, 2017 (the “First Tranche”). The
second tranche, for gross proceeds of $1,500,000, is expected to close on or before January 30,
2018 (the “Second Tranche”) . The Second Tranche is conditional on the Company completing an
updated mineral resource estimate in respect of the surface accessible ( targeted open pit) portion
of the Kombat mine (the “Updated Resource Estimate”) and updating the financial model used in
the Company’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 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
Closing of e ach of the First and Second Tranche s remains subject to a number of conditions,
including receipt of all necessary regulatory approvals, including the approval of the TSX Venture
Exchange. All securities issued by Trigon will be subject to a hold period of four months and one
day from the respective date of issue . The Company intends to use the net proceeds from the
Offering to update its resource estimate in respect of the surface accessibl e (open pit) portion of
the Kombat m ine, preparation of a bankable feasibility study on the surface accessible (open pit)
portion of the Kombat m ine, exploration and development of the Kombat m ine, to secure
equipment for the refurbishment of the existing mill and concentrator at the Kombat mine and for
working capital and general corporate purposes.
Stephan Theron, President and CEO of Trigon, commented: “This funding will provide the initial
capital for Trigon’s restart activities and will put us in a strong position to achieve our production
target in 2018.”
Following the completion of the First and Second Tranche s, if the Company completes a private
placement financing for gross proceeds of at least $1,000,000 on or before April 30, 2018 with
Forbes or other investors introduced to the Company by Forbes, Forbes shall be entitled to receive
a production payment related to the Company’s Namibian open pit mining operations (the
“Production Payment”). Forbes has notified the Company that if the Company launches another
private placement financing on or before April 30, 2018, it is interested in investing an additional
$1,000,000.
The Production Payment will be calculated as 0.5% of net smelter ret urns related to the
Company’s Namibian open pit mining operations. The Production 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 (the “Production Period”).
Restart Activities
The Company continues to target the commencement of open pit mining at Kombat by the third
quarter of 2018 and is making good progress in advancing the various workstreams as previously
reported and as updated below.
The Company does not have a current f easibility study and is not basing its decision to restart
mining activities on any estimated mineral reserves or on a feasibility study regarding the
economic or technical feasibility of the Kombat project. Historically, projects that are
re-commenced prior to the mining company completing a feasibility study have a much higher risk
of economic or technical failure. Estimates regarding production levels, development timetable
and economic feasibility in respect of the Kombat mine are based on internal management
forecasts and are inherently uncertain and subject to continued refinement.
Drilling Results, Updated Mineral Resource Estimate and Updated Financial Model
Final assay results from the October 2017 drilling programs which focused on the Kombat Ce ntral
and East areas are expected to be received by the end of December 2017. The information will
then be utilized to remodel the current Mineral Resource estimate, as required to close the
Second Tranche of the Offering as referred to above. The Updated Resource Estimate will form
the basis for the feasibility study on the surface mining areas as referred to below.
In conjunction with the Updated Resource Estimate, the Company will also update the financial
model used in the Company’s PEA.
Environmental Permitting
The Company remains on track to secure the Environmental Clearance Certificate required for
open pit mining and associated activities, as well as those approvals needed for exploration
activities for underground mining. The required speciali st studies are in their final stages of
completion, and application for the necessary permitting will be made in early 2018 after the
relevant Environmental Impact Assessment reports have been reviewed by stakeholders.
Metallurgical Testwork
Variability testing on the optimized flotation conditions as announced on November 30, 2017, is
expected to be completed by February 2018 . The testing results and will be used in the feasibility
study referred to below.
Plant Refurbishment and Other On-site Activities
The Company intends to apply a portion of the proceeds of the Offering to securing equipment for
the refurbishment of the existing mill and concentrator at Kombat.
In addition, the Company will commence with the process of selecti ng a mining contractor in early
2018 to facilitate on -site mobilization to meet the targeted timelines for commencement of
mining.
Feasibility Studies
The Company intends to initiate a feasibility study on the surface mining areas and a pre-feasibility
design on the Asis Far West underground mine in January 2018. The Company does not currently
have a feasibility study in respect of the Kombat mine and production restart activities are based
on internal management forecasts.
Offtake and Project Finance Agreements
The Company is well placed to move forward with the finalization of the offtake and project
finance agreements with a major international trading house, details of which were announced on
October 26, 2017.
In respect of the offtake, the trading house has agreed to purchase 100% of the annual production
from the Kombat mine up to a total of 20,000 metric tonnes of contained copper (the “Offtake”),
representing the anticipated life of mine production from the open pit in the Kombat Central and
East areas.
In conjunction with the Offtake, the trader will provide a financing facility to Manila Investments
(Pty) Ltd of up to US$7.7 million (the “Facility”) to refurbish the concentrator at the Kombat mine,
to upgrade infrastructures and for working capital purposes to bring the Kombat open pit mine
into production.
The finalization of the Offtake and the Facility are subject to various conditions precedent,
including final due diligence and approvals from the trader.
Qualified Person
The technical and scie ntific contents of this press release have been prepared under the
supervision of and have been reviewed and approved by Fanie Muller, P.Eng, VP Operations of
Trigon, who is a Qualified Person as defined by NI 43-101.
Trigon Metals Inc.
Trigon is a pu blicly traded Canadian exploration and development company with its core
operations focused on copper resources in Namibia, one of the world’s most prospective copper
regions, where it has substantial assets in place with significant upside. The Company co ntinues to
hold an 80 % interest in five mining licenc es in the Otavi Mountain lands, an area of Namibia
particularly known for its high -grade copper deposits. Within these licenc es 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
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 adequa cy or accuracy of this
release.
This news release may contain forward- looking statements. These statements include statements
regarding the Offering, the expected use of proceeds of the Offering , the Company’s ability to
develop a producing mine, the Company’s ability to commence open pit mining, the timing of the
Company’s drill results, the Company’s ability to secure the necessary permits, the Company’s
ability to secure equipment and refurbish the mill and concentrator, the Company’s ability to
update mineral resource estimates and its financial models, the Company’s ability to complete
feasibility studies, the terms of the Offtake and Facility, the finalization of the Offtake and Facility,
the Company’s ability to raise adequate financing 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 a nalysis 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 obligation to update any forward- looking
statements, except as required by applicable laws.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the
securities in the United States. The securities have not been and will not be registered under the
United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities
laws and may not be offered or sold within the United States or to U.S. Persons unless registered
under the U.S. Securities Act and applicable state securities laws or a n exemption from such
registration is available.