Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Trigon Metals Inc (PNTZF, Financial) achieved a significant milestone with the full production ramp-up of the Kombat mine, marking the first full quarter of underground contribution.
- The company produced 2.3 million pounds of copper and 33,400 pounds of silver, leading to a positive adjusted EBITDA of $1.8 million.
- Revenue for the quarter increased to USD10 million, a substantial rise from $3.8 million in the previous quarter.
- Trigon Metals Inc (PNTZF) reaffirmed its annual production guidance of 12.1 million to 13.4 million pounds of copper, with expected cash costs in the range of $2.80 to $3.50 per pound.
- The company received a $2.5 million advance from IXM, providing working capital to support growth and ensuring stability as production ramps up.
Negative Points
- Despite improvements, Trigon Metals Inc (PNTZF) reported a net loss of $2.1 million for the quarter.
- The mill utilization rate was approximately 70% to 80%, indicating room for improvement in processing capacity.
- The underground grade decreased slightly from the previous quarter due to mining in shallower areas while waiting for water levels to drop.
- The company is still reliant on older mills from the historic Kombat operation, which may affect efficiency until new equipment is installed.
- There is a need to manage financial strategies carefully to avoid raising equity at low share prices, as the company explores debt instruments for growth.
Q & A Highlights
Q: Can you elaborate on the guidance and mill utilization rates?
A: Rennie Morkel, President and COO, explained that they are confident in achieving the guidance of producing up to 3 million pounds of copper in Q3 and Q4 due to unlocking higher-grade material from underground. Jeddiah Richardson, CEO, added that the mills were operating at 70-80% utilization, and improvements are expected with new equipment planned for next year.
Q: What contributed to the improvement in recovery rates this quarter?
A: Fanie Müller, VP of Operations, noted that the improvement was due to processing predominantly sulfide material from underground, which increased recovery rates, alongside higher grades.
Q: How is the operating cash flow expected to change going forward?
A: Jeddiah Richardson, CEO, highlighted that actual cash flow was closer to $600,000 this quarter. As production increases and fixed costs are spread over more pounds of copper, profitability and cash flow are expected to rise significantly.
Q: Can you provide an update on exploration activities and their potential impact on the mine plan?
A: Andreas Rompel, VP of Exploration, stated that current drilling is focused underground, particularly around Shaft 3. A comprehensive exploration program is planned for the Kombat Valley, with a budget of USD0.5 million for soil sampling and a mag survey.
Q: When do you expect to achieve the life-of-mine cash cost target of $2.19 per pound?
A: Rennie Morkel, President and COO, indicated that this target is expected to be reached in fiscal 2026, following plant upgrades and increased production efficiencies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
