• Inferred Mineral Resources of 6.905 million tonnes at a grade of 2.78% copper, 1.14% lead and 19.11 g/t silver.
  • Positive NPV of US$72 million and an excellent internal rate of return of 45.5%.
  • Combined open pit and underground life of mine of nine years at an average mined grade of 2.83% copper, producing 122,106 CuEq tons.
  • C1 cash cost of $1.33/lb.
  • Total direct capital expenditure over the life of mine of US$67.21 million.
  • Phase 1 strategy of open pit mining to facilitate early cash flow generation only requiring start-up capital of US$7.73 million.

Toronto, Canada – June 5, 2017 – Trigon Metals Inc. (TSX-V: TM) (“Trigon” or the “Company”) is pleased to announce the filing of its National Instrument 43-101 compliant technical report (“the technical report”). This follows the Company’s press release issued on April 20, 2017 announcing an updated Inferred Mineral Resource estimate at the Company’s Kombat operations located in northern Namibia (“Kombat”).

In conjunction with the technical report, the Company has also completed a scoping level study on the Kombat operations, in the form of a preliminary economic assessment (“PEA”), the results of which are summarized in the technical report. The PEA confirms that the Kombat operations have a best-estimated net present value (“NPV”) of US$72 million and a robust internal rate of return of 45.5%.

Stephan Theron, President and CEO of Trigon, commented: “We are pleased to have completed the technical report and PEA in order to take the Company one step closer to its near-term strategy of open pit mining. The results of the work done have confirmed our internal evaluation of this attractive and exciting project and we look forward to moving the Company forward to production.”

Phase 1 – Open Pit Mining
The Company remains focused on its phase 1 strategy of open pit mining in the Kombat Central and East areas to facilitate early cash flow generation. As set out below, the start-up capital required for first production of the open pit amounts to US$7.73 million, which includes: power, water and other infrastructure requirements; contractor mobilization and site establishment; refurbishment of the existing mill; studies and design and working capital. Although the capital cost of the mill refurbishment is expected to be financed by the proceeds from open pit mining; the mill is expected to be utilized for future underground operations long after the depletion of the open pit reserves.

Technical report
The updated Mineral Resource estimate reported on April 20, 2017 was in respect of the Kombat West, Central and East, Asis Far West, Asis Gap and Asis West areas. The Company is pleased to have subsequently included additional Inferred Mineral Resources at Gross Otavi, resulting in total Inferred Mineral Resources of 6.905 million tonnes at a grade of 2.78% copper, 1.14% lead and 19.11 g/t silver, as set out in detail in the table below.

Combined Inferred Mineral Resources for the Kombat Operations as at April 2017

Mine Section Tonnes (Mt) Density


Cu (%) Pb (%) Ag (ppm) Cu (Tonnes) Pb (Tonnes) Ag (kg)
Kombat East 1,232 2.83 1.37 1.05 1.70 16,924 12 895 2,089
Kombat Central 0,848 2.82 1.79 0.33 6.90 15,135 2 767 5,848
Kombat West 0,458 2.89 2.77 2.97 2.44 12,684 13 610 1,119
Kombat Total 2,538 2.83 1.76 1.15 3.57 44,743 29,272 9,056
Otavi Central 0,643 2.84 0.93 2.50 0.85 6,006 16,053 546
Otavi Total 0,643 2.84 0.93 2.50 0.85 6,006 16,053 546
Asis West 2,475 2.88 4.05 1.28 32.36 100,214 31,735 80,078
Asis Gap 0,166 2.83 2.35 0.35 21.15 3,909 590 3,514
Asis Far West 1,082 2.85 3.42 0.10 35.81 37,000 1,036 38,763
Asis Total 3,723 2.87 3.79 0.90 32.86 141,122 33,361 122,355
Total Total 6,905 2.85 2.78 1.14 19.11 191,871 78,685 131,957


  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 0.77%.
  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 15% has been applied to the Mineral Resource.
  9. All reported Mineral Resources are limited to fall within the property boundaries of the project area.
  10. Columns may not add up due to rounding.
  11. 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.

Preliminary Economic Assessment
The purpose of the PEA was to investigate the economic viability, upside potential as well as future exploration requirements of open pit and underground mining targeting the copper and lead resources at Kombat East, Kombat Central, Asis Far West, Asis West and Gross Otavi, taking into consideration mining methods, treatment methods and development of additional infrastructure. The PEA has been based on the total Inferred Mineral Resources as set out above.

Production and processing
The payable saleable product tonnes are illustrated in the graph below.

The combined open pits and underground mines have a potential life of mine (“LoM”) of nine years mining 4,418 kt at an average mined grade of 2.83% copper as set out in the table below.

Item Unit  PEA
Ore Tonnes Mined kt 4,418
Average Cu Grade Mined % 2.83%
Average Ag Grade Mined g/t 20.63
Total Cu Concentrate kt 420
Total 45% Pb Concentrate kt 30
Total Cu Metal Paid For by Smelter kt 108
Cu Payability (Including Refining) % 91.4%
Cu Payability (Including Refining and Treatment) % 79.9%
Total Silver Ounces Paid For by Smelter koz 2,443
LoM Years 9

The capital schedule for the Kombat operations for the life of mine is set out in the table below.  The start-up capital required for first production of the open pit amounts to US$7.73 million. Total direct capital expenditure over the life of mine is US$67.21 million (excluding contingencies and stay in business capital) with the peak capital expenditure during years 2021 and 2022.

Capital Expenditure US$m over LoM
East and Central Open Pit Mining Capital 1,51
Gross Otavi Open Pit Mining Capital 0,72
Underground Mining Capital 25,96
Asis Far West Development Cost – Capitalized 12,63
Asis West Development Cost – Capitalized 15,42
Total Direct Mining Capital 56,23
Plant Capital  
Open Pit Plant Capital 2,97
Underground Plant Expansion Capital 3,90
Tailings Storage Facility 0,24
Total Direct Plant Capital 7,11
Other Non-Direct Capital  
Corporate Overhead 1,00
Environmental Licensing and Permitting 0,30
Pre-Feasibility Study and NI43-101 (Reserve) 0,21
Feasibility Study and NI43-101 Update 0,35
Surface Exploration 0,35
Underground Exploration 1,66
Total Other Non-Direct Capital 3,87
Total Direct Capital over LoM 67,21


Operating costs and commodity prices

Direct cash costs (C1) for the Kombat operations consist of plant and mining operating costs, concentrate transport costs, treatment costs and refining costs. Other cash costs (C3) include corporate overheads and the Namibian revenue royalty of 3%. Kombat has an all-in sustainable cost of US$109/milled tonne that equates to US$1.77/copper equivalent pound (“CuEq lb”). The turnover, cost and earnings numbers are displayed in the tables below per milled tonne and per recovered copper equivalent pound.

Item Unit PEA
Milled Tonnes kt 4,418
Net Turnover US$/Milled tonne 172
Mine Cost US$/Milled tonne 34
Plant Costs US$/Milled tonne 12
Other Costs US$/Milled tonne 35
Direct Cash Costs (C1) US$/Milled tonne 81
Capex US$/Milled tonne 20
Production Costs (C2) US$/Milled tonne 101
Royalties US$/Milled tonne 5
Corporate Overheads US$/Milled tonne 3
All-in Sustainable Costs (C3) US$/Milled tonne 109
All-in Sustainable Cost Margin % 36%
EBITDA* US$/Milled tonne 83
EBITDA Margin % 48%
Item Unit PEA
Copper Equivalent Tonnes Tonnes 122,106
Net Turnover US$/CuEq lb 2.82
Mine Cost US$/CuEq lb 0.56
Plant Costs US$/CuEq lb 0.20
Other Costs US$/CuEq lb 0.57
Direct Cash Costs (C1) US$/CuEq lb 1.33
Capex US$/CuEq lb 0.31
Production Costs (C2) US$/CuEq lb 1.64
Royalties US$/CuEq lb 0.08
Corporate Overheads US$/CuEq lb 0.05
All-in Sustainable Costs (C3) US$/CuEq lb 1.77
EBITDA US$CuEq lb 1.36

Using the discounted cash flow method to calculate the NPV and the intrinsic value (fundamental value based on the technical inputs, and cash flow projection that creates an NPV) in real terms, the Kombat operations have a best-estimated net present value of US$72 million at a real discount rate of 11.02%, a payback period of less than 5 years and an internal rate of return of 45.5%.

The following commodity price forecasts were used in the discounted cash flow model in the PEA.

Item Unit 2018 2019 2020 2021 Long-term
Silver US$/oz 17.42 17.76 18120 18.14 18.16
Copper US$/tonne 5,624 5,510 5,628 5,733 6,507
Copper US$/lb 2.55 2.50 2.55 2.60 2.95
Lead US$/tonne 2,193 2,071 2,006 1,930 1,878
Lead US$/lb 0.99 0.94 0.91 0.88 0.85

The PEA is preliminary in nature, and it 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 preliminary economic assessment will be realized.

The technical report entitled “NI 43-101 Technical Report on the Kombat Copper Project, Namibia”, dated May 31, 2017, was prepared for Trigon by Minxcon (Pty) Ltd (“Minxcon”), and is available under the Company’s profile on SEDAR at www.sedar.com and on the Company’s website at www.trigonmetals.com.

Board Update
The Company announces the resignation of Mr. James Xiang as a director of the Company, effective immediately. The Company would like to thank Mr. Xiang for his contributions to the Company.

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 release. 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 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 continues to hold an 80% interest in five mining licenses in the Otavi Mountain lands, an area of Namibia particularly known 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:
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 adequacy or accuracy of this release.

This news release may contain forward-looking statements. These statements include statements regarding the First Tranche, the expected use of proceeds of the First Tranche 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 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 an exemption from such registration is available.

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