Trigon Metals Inc. [TM-TSXV] shares were active Thursday after the company said it has closed on a $5.5 million convertible security funding agreement with Lind Global Fund 11, LP, an entity managed by the Lind Partners LLC, a New York-based institutional fund manager.
Trigon has also entered into a financing letter with Sprott Mining Inc. under which Sprott has agreed to provide Trigon with a US$2.5 million loan. The Sprott loan will have a term of 180 days and will accrue 1.0% interest per calendar month, payable in arrears.
The new funding is expected to give Trigon the flexibility it needs to achieve commercial production at its 80%-owned Kombat Mine in Namibia. Production at the flagship operation is expected to grow to 30 million pounds of copper annually using open pit and underground methods.
Under the agreement announced on April 28, 2022,, Trigon has pledged to issue to Lind a convertible security in the principal amount of $5.5 million. Proceeds are earmarked for working capital and to repay all outstanding amounts owed to IXM S.A. under the terms of a credit facility between IXM and Trigon. A unit of the CMOC (international mining) Group, IXM is a global merchandiser of base and other non-ferrous metals
The shares declined on the news, falling 6.4% or $0.015 to 22 cents on volume of 1.65 million. The shares are currently trading in a 52-week range of 61 cents and 20.5 cents.
Trigon said the Lind funding will replace the US$5 million working capital facility from metals trader and off taker IXM. Only US$2.75 million of the IXM facility was drawn down. The remainder was withheld, leading to capital constraints at a critical time in the life of the mine.
“The flexibility of the Lind funding and the Sprott Loan is expected to give the operation all of the liquidity necessary to achieve commercial production,’’ Trigon said in a press release. “While concentrate sales have begun in earnest, capital constraints have put a lot of pressure on the mine, the team and our contractors,’’ the company said.
“The emplacement of the Sprott and Lind debt financings and the replacement of the IXM facility, marks an inflection point in the operation of the Kombat Mine, putting to rest the capital constraints that have prevented operating at our full potential and delayed our declaration of commercial production,’’ said Trigon President and CEO Jed Richardson.
Trigon is a Canadian exploration and development company with a focus on copper and silver holdings in Africa. Currently the company has operations in Namibia and Morocco. Its portfolio includes an 80% interest in five mining licenses in the Otavi Mountainlands, an area of Namibia widely recognized for tis high-grade copper deposits. In that area, Trigon is focused on the Kombat Mine.
In a news release on February 28, 2022, Trigon said the first shipment of copper concentrate had been delivered to IXM warehouses in Walvis Bay, Namibia. The truck contained 31 tonnes of concentrate, grading 20.41% copper and 265 g/t silver.