TRIGON METALS INC. (TSX-V: TM) Corporate Presentation April 2018

Transcription

1 TRIGON METALS INC. (TSX-V: TM) Corporate Presentation April 2018

2 Disclosure Forward Looking Statement This presentation contains forward-looking information which may include, but is not limited to, statements with respect to the future financial or operating performance of Trigon Metals Inc. and its subsidiaries (collectively, the Company ) and its mineral projects; the future prices of metals; the anticipated results of exploration activities; the estimation of mineral resources; the realization of mineral resource estimates; capital, development, operating and exploration expenditures; costs and timing of the development of the Company s mineral properties; timing of future exploration; requirements for additional capital; government regulation of mining operations; anticipated results of economic and technical studies; environmental matters; reclamation expenses; title disputes or claims; limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Often, but not always, forward-looking information can be identified by the use of words and phrases such as plans, expects, is expected, budget, scheduled, estimates, forecasts, intends, anticipates, or believes or variations (including negative variations) of such words and phrases, or state that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Forward-looking information is based on the opinions and estimates of management as of the date such statements are made and is based on information currently available to management and upon what management believes to be reasonable assumptions, including, among others, that general business, economic, competitive, political and social uncertainties remain favorable; that actual results of exploration activities justify further studies and development of the Company s mineral projects; that the future prices of metals, and copper in particular, remain at levels that justify the exploration and future development and operation of the Company s mineral projects; that deposit quality and characteristics remain as anticipated; that there is no failure of plant, equipment or processes to operate as anticipated; that accidents, labour disputes and other risks of the mining industry do not occur; that the jurisdictions in which the Company operates remain politically stable; that there are no unanticipated delays in obtaining governmental approvals or financing or in the completion of future studies, development or construction activities; that the actual costs of exploration, and studies remain within budgeted amounts; that regulatory and legal requirements required for exploration or development activities do not change in any adverse manner, as well as those factors discussed in the section entitled Risks and Uncertainties as may be identified in the Company s MD&A and public disclosure from time to time, as filed under the Company s profile on SEDAR at Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in the forward-looking information, there may be other factors that cause such actions, events or results to differ from those anticipated, estimated or intended. Any inaccuracy in the assumptions identified above may also cause actual actions, events or results to differ materially from those described in the forward-looking information. Forward-looking information contained herein is made as of the date of this Presentation and the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, potential investors should not place undue reliance on forward-looking information. The technical information contained herein is derived from or a summary of the NI compliant technical report entitled NI Technical Report on the Kombat Copper Project, Namibia Mineral Resource Report (the Technical Report ) and the press release published by the Company on February 6, For additional information, please see the Technical Report filed on on June 2, Qualified Person Mr. Uwe Engelmann (BSc (Zoo. & Bot.), BSc Hons (Geol.), Pr.Sci.Nat. No /08, MGSSA) of Minxcon (Pty) Ltd ( Minxcon ), is a qualified person as such term is defined in NI and has reviewed and approved the technical information and data included in this presentation. As a director of Minxcon, Mr. Engelmann is considered independent. 2

3 Trigon Metals Capital Structure TSX-V: TM Common Shares Warrants ($0.40- $1.30) Options ($0.24- $1.60) Fully Diluted Current 27.3 Million 5.6 Million 2.2 Million 35.1 Million Market Information Share Price C$0.29 Market Cap C$7.8m 52 Week Range C$0.21-C$0.49 Average Volume (3 month) 37,100 * As at April 9, 2018 Source: TMX Money 3

4 Highlights Former producing mine with over $100 million spent inground Resource and PEA updated in 2018 Positive NPV of US$96 million and a highly attractive IRR of 85.2% Offtake in place for near term production at Kombat open pit (Q3-2018) Fast tracking open pit production Low capital intensity Phase 1 strategy of open pit mining will facilitate early cash flow generation requiring a start up capital of US$7.2 million Growth potential from underground at Asis Multiple exploration targets near surface and underground for resource expansion Otavi Valley Drill core at site from previous exploration programs 4

5 Kombat Mine Infrastructure CONCENTRATOR: Kombat Mill 1,100tpd Partially refurbished in 2015 Additional work required ELECTRICITY: Grid power NamPower infrastructure in place Applying for reconnection TAILINGS FACILITY: Area for tailings facility close to operations RAIL: Existing railway connection between Kombat Mine and Tsumeb Smelter and the port of Walvis Bay PAVED ROAD: Paved road network connecting Kombat with the towns of Otavi and Grootfontein 5

6 Kombat Project Location The Kombat project is located in the Grootfontein District, Otjozondjupa region of Namibia, an area recognized for its high-grade copper deposits On the B8 Highway, midway between Otavi (42 km to the west) and Grootfontein (49 km to the east) 345 km north of Windhoek, the capital of Namibia 110 km by road/rail to Tsumeb, where the copper smelter is situated (owned by Dundee Precious Metals) The smelter is linked by rail to the Walvis Bay port (500 km to the south west) Rail siding at the mine connects Kombat to all major Namibian cities, and Walvis Bay 6

7 Kombat Mining In Namibia Land area of 825,418 km 2 With a population of 2.46 million the Namib Desert is one of the least densely populated countries in the world Namibia experiences a stable parliamentary democracy with a highly stable political, economic and social economy Economy is based on agriculture, herding, tourism, and mining, with mining providing 25% of the country s revenue. Mineral environment includes mining for gem diamonds, uranium, gold, silver and base metals Excellent transportation infrastructure which allows for easy access to the area 7

8 Opportunities Gross Otavi Inferred Resource of 0.93% Cu, 2.5% Pb, 0.85 g/t Ag Sabre Exploration Licence 3540 surrounds the Kombat and Gross Otavi Mining License Areas 1km west of Kombat ML boundary Drill hole identified 2.35% Cu, 33 g/t Ag Guchab Deposit Drill Results * 1.15% Cu, 6.90g/t Ag 3.45% Cu, 29.70g/t Ag 2.22% Cu, 44.6g/t Ag 2.44% Cu, 43.6g/t Ag 1.06% Cu, 15.05g/t Ag 1.23% Cu, 11.20g/t Ag 1.35% Cu, 15.50g/t Ag 1.38% Cu, 28.30g/t Ag 1.29% Cu, 4.5g/t Ag 8

9 Trigon Metals has an NI compliant mineral resource estimate of 1.5 million tonnes of Indicated Mineral Resources at a grade of 1.14% copper, 0.72% lead and 2.88 g/t silver, and 5.5 million tonnes of Inferred Mineral Resources at a grade of 3.05% copper, 1.25% lead and g/t silver Mine Area Resource Class Trigon Metals Mineral Resources Tonnes Density Cu Pb Ag Cu Pb Ag Mt t/m 3 % % ppm t t kg Kombat East Indicated 0,951 2,82 1,03 0,92 1, Kombat Central Indicated 0,578 2,81 1,32 0,41 5, Kombat West Indicated Total Indicated 1,529 2,82 1,14 0,72 2, Kombat East Inferred 0,397 2,85 1,11 0,78 1, Kombat Central Inferred 0,287 2,84 1,37 0,87 5, Kombat West Inferred 0,461 2,88 2,76 2,96 2, Otavi Inferred 0,643 2,84 0,93 2,50 0, Asis West Inferred 2,475 2,88 4,05 1,28 32, Asis Gap Inferred 0,166 2,83 2,35 0,35 21, Asis Far West Inferred 1,082 2,85 3,42 0,10 35, Total Inferred 5,511 2,86 3,05 1,25 22, Total (Indicated & Inferred) 7,040 2,85 2,64 1,13 18, Notes: 1. The open pit Mineral Resource is declared to a depth of 150 m with a CuEq cut off of 0.77 % for Otavi and 0.6% for Kombat. 2. The underground Mineral Resource (below 150 m) is declared at a CuEq cut off of 1.4 %. 3. A geological loss of 15% for the Inferred and 10% for the Indicated Mineral Resource has been applied. 4. The Mineral Resources are exclusive of Mineral Reserves. 5. Mineral Resources are reported as total Mineral Resources and are not attributed. 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. 9 Source: NI Technical Report on the Kombat Copper Project, Namibia Mineral Resource Report filed on on March 23, 2018

10 Kombat Mine Geology Plan Kombat Trend Mining Licences 10

11 Kombat Mine Near term production of surface material recommission of underground mining with highly attractive capital intensity Use of existing infrastructure will minimize capital costs and maximize return on investment Focus on multi-pit surface mining for early revenue (vs. previous strategy of a mega-pit) Increase production profile and concentrator capacity economies of scale Analysis of the extensive historic database collected for these sites will be conducted to identify areas of interest and future strategies Asis Far West Shaft No 1 Shaft No 3 Shaft Conceptual design infrastructure to access Gap Area and AFW Mining areas prior to flooding event in 2008 AFW shaft commissioned in 2006 as LOM replacement strategy Resource Upside Current Resource 11

12 Historic Producing Mine in a Mining Friendly Jurisdiction Historic access to underground mines Historic Producing Mine in a Mining Friendly Jurisdiction 80% interest in 5 active mining licenses in a copper rich region in northern Namibia (constituting the Kombat Mine, and the Gross Otavi and Harasib projects) Historical production from the Kombat Mine of million tonnes at 2.62% copper, 1.55% lead and 18 g/t silver over an aggregate of 45 years Existing plant Historic access to underground mines Indicated Mineral Resource Estimate of 1.5 million tonnes at a grade of 1.14% copper, 0.72% lead and 2.88 g/t silver, and Inferred Mineral Resource Estimate of 5.5 million tonnes at a grade of 3.05% copper, 1.25% lead and g/t silver representing an initial 8 year life of mine 12

13 PEA Summary Life of mine of 8 years, mining 4,071 kt at an average mined grade of 2.84% copper Key Economics NPV of $96 million Real discount rate of 10.92% Payback of 3.6 years IRR of 85.2% 106,629 CuEq tons produced at a C1 cash cost of US$1.33/lb Total capital of US$67.7m (excluding contingency and SIB) 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 Total Cu Concentrate kt 361 Total Pb Concentrate kt 30 Total Cu Metal Recovered kt 105 Total Pb Metal Recovered kt 13 Total Ag Metal Recovered koz 2,385 LoM Years 8 Source: NI Technical Report on the Kombat Copper Project, Namibia Mineral Resource Report filed on on March 23,

14 Catalysts Trigon Metals Life of Mine Development Strategy Secure environmental permitting Re-connection of NamPower Appointment of contract miner Refurbishment of mill and concentrator Commence conceptual engineering work and planning for the Asis Far West (AFW) project De-water AFW shaft AFW shaft represents significant growth potential for Life of Mine Development Strategy Life of Mine Development Strategy CATEGORY FY2019 CAPEX REQUIREMENT COMMENTS US$MM Open Pit Mining $1.5 NamPower Reconnection, Surface Infrastructure, Tailings Pipeline, Contractor Mobilization & Site Establishment Processing $3.2 Kombat Mill Refurbishment Studies and Design $0.4 PEA, Pre-Feasibility Study & NI Reserve Estimate, EMP & Permitting Exploration $0.1 Surface exploration Stay in Business Capital $0.1 Plant Working Capital (capitalized) $1.0 Operating & Corporate Costs Contingencies $0.9 Total Capex Requirement $7.2 Source: NI Technical Report on the Kombat Copper Project, Namibia Mineral Resource Report filed on on March 23,

15 Trigon Metals PEA Summary Copper and Lead Production Low cost, near-term copper production through an initial 1,100 tpd surface mining operation Initial cash flows invested in developing underground resources for expanded production Metal recovered in concentrate Tonnes Copper Lead * Based on current resource model without any further development and exploration work Source: NI Technical Report on the Kombat Copper Project, Namibia Mineral Resource Report filed on on March 23,

16 Trigon Metals PEA Summary Capital Capital schedule 30 USD milion Start up capital of US$7.2m* for surface mining in FY Mining Plant Other Plant SIB UG Mining SIB Contingencies * Includes costs of Feasibility Study for open pit and Pre-Feasibility Study for underground mining Source: NI Technical Report on the Kombat Copper Project, Namibia Mineral Resource Report filed on on March 23,

17 Trigon Metals PEA Summary Operating Costs & Margins Operating cost and margin (US$/lb) 3,50 3,00 2,50 2,00 1,50 1,00 0,50 - Net Turnover Mine Cost Plant Costs Other Costs Direct Cash Costs (C1) Capex Production Costs (C2) Royalties Corporate Overheads All-in Sustainable Costs (C3) EBITDA Item Unit Long term Silver US$/oz 17,63 17,63 17,63 17,63 17,63 17,63 Copper US$/tonne Copper US$/lb 3,07 3,03 3,06 3,03 2,99 2,97 Lead US$/tonne Source: NI Technical Report on the Kombat Copper Project, Namibia Mineral Resource Report filed on on March 23,

18 Future Growth Total target production profile of +30kt copper to become a mid-tier copper producer within the next 5 years through both organic and acquisitive growth opportunities Surface and underground production from the Kombat Mine Exploration potential in the Kombat Trend Potential M&A M&A global opportunities in various base metals, including copper, zinc and lead. Trigon Metals seeks to generate significant returns for its investors, by acquiring early stage exploration and development projects with the goal to generate upside by taking these assets into production. Asis Far West shaft 18

19 Trigon Metals Group Structure & Shareholding Local partners (including the Namibian Government owned Epangelo) hold 20% of the Kombat project Trigon Metals Inc (Canada) TSX-V listed PNT Financeco Corp. (Barbados) Ownership Of Trigon Metals F&M/JJ Global Resource Fund 10.4% Aberdeen International 16.2% Epangelo Mining Havana Investments Kombat Holdings (Pty) Ltd (Namibia) Management and Insiders ~4.4% 10% 10% Sulliden Mining Capital 4.1% 80% 100% Manila Investments (Pty) Ltd (Namibia) (holder of 5 MLs) Kombat Copper Mine (Pty) Ltd (Namibia) (being dissolved) Routemaster 1.3% 19

20 Board of Directors DIRECTOR QUALIFICATION BIOGRAPHY Mark Eaton Chairman Stephan Theron President and CEO CPA, CGA Investment professional with over 20 years of experience in equity capital markets specializing in the resource sector. Current Executive Chairman and the former CEO of Belo Sun Mining Corp. 17 years of extensive management, capital project development and M&A experience within the mining industry, mainly focused in Africa. Previously Managing Director of Liberty Metals & Mining. Justin Reid MBA Geologist and capital markets executive with over 20 years experience focused exclusively in the mineral resource space. Currently the CEO of Sulliden Mining Capital, and has held senior executive positions with Cormark, Paladin Energy, National Bank Financial & Sulliden Gold. Robert Schafer P.Geo Professional Geologist with more than 30 years of international experience identifying, evaluating and structuring transactions for mineral deposits globally. Immediate past-president of the Prospectors & Developers Association of Canada and a past president of the Canadian Institute for Mining, Metallurgy and Petroleum (CIM), as well as an active member of the Society for Mining, Metallurgy and Exploration (SME) in the USA, having served on its board for more than a decade. 20

21 Management Team MANAGEMENT TITLE QUALIFICATION BIOGRAPHY Stephan Theron President and CEO CPA, CGA 17 years of extensive management, capital project development and M&A experience within the mining industry, mainly focused in Africa. Previously Managing Director of Liberty Metals & Mining. Stephen Woodhead CFO CA(SA) Over 25 years of finance experience in the mining industry including CFO of various listed companies Malcolm Campbell COO BSc. Eng(Min) P. Cert. Eng Fanie Müller VP Operations and Country Manager Close to 30 years industry experience, including extensive exploration and mining project experience across Southern Africa. Previously CEO of Buffalo Coal. P. Eng 15 years industry and extensive project management experience in Southern Africa. Previously VP Technical Services of Buffalo Coal. Sarah Roberts VP Finance, M&A CA(SA) 16 years of corporate finance and financial management experience in the Southern African resource sector. Previously CFO of Buffalo Coal. The management team also has access to a number of the past managers from the site, who have extensive experience at the mine, including the mine manager, engineering manager, geologist, planner, surveyor etc. 21

22 Contact Information Drill core at site from previous exploration programs Existing plant at Kombat 65 Queen Street West Suite 800 Toronto, Ontario Canada M5H 2M5 Stephan Theron, President & CEO TSX-V: TM 22