Good morning, Trigon shareholders, and welcome to the Trigon Metals Conference Call. Trigon Reports Second Quarter Operating and Financial Results. This call is being recorded live on Tuesday, December 3rd, 2024. All lines are currently set to listen-only mode. Following the conference call, we will conduct a brief question-and-answer session. If you require immediate assistance at any time during this call, please press star zero for the operator. I will now turn the conference over to President and COO, Rennie Morkel. Please go ahead. Thank you, and good morning, everyone. This quarter marked a significant milestone. We achieved an average of 980 tons per day from underground operation over 30 consecutive days, 13 months ahead of schedule. This success fulfills a key requirement in our agreement with Sprott and significantly de-risked our operations moving forward. During the quarter, we processed 77,300 tons with a copper recovery of 92.1%. Our current mill capacity is between 900 and 1,000 tons per day, and we're prioritizing high-grade underground ore to maximize output. Looking ahead, we are planning to expand the mill capacity to 60,000 tons per month. This will allow us to double throughput, reduce cost, and capitalize on the full potential of the Kombat Mine by reducing operating costs and enhancing profitability. We are on track to commence mining at Shaft 3 next year to support this expansion. However, Q2 also represents the challenges. We produced 2.14 million pounds of copper at a C1 cash cost of $3.46 per pound. Lower grades, higher lead content, and pump failures impacted our performance. This resulted in a negative adjusted EBITDA of $1.4 million and a net loss of $6.2 million, or $0.16 per share. Despite these challenges, our strategic decision to pause the open-pit mining and focus on high-grade underground ore is yielding positive results. Underground ore improves our overall copper grade, and this focus will continue to enhance our profitability. I'll now hand over to our CEO and Executive Chairman, Jed Richardson, for additional results. Over to you, Jed. Okay. Thank you, Rennie. While the quarter had its difficulties, our early achievement of underground production is a milestone, of course, and a real de-risking of the whole operation, securing our partnership with Sprott and positioning us to grow stronger. Just as a reminder, that milestone represented a taking over so that the stream stays as a stream and does not revert back into a debt. Now, we optimize underground operations, and we're preparing for a mill expansion. I'm confident that our ability to deliver long-term value for shareholders, which is great, and our team is focused on maximizing efficiencies, reducing costs, and unlocking the full potential of the Kombat Mine. Now, before we get into questions, I want to talk a little bit about what we've done. If you are looking at the press release, if you've been following the company closely, you'll be aware that we were intending to look at raising some capital for expanding the operation and for moving the company forward as we got into October. We're now well past October, and we haven't done so, and what you see in the announcement this morning represents the strategic decision that we've made that we're not going to dilute shareholders in a big capital raise for the growth. What we're doing instead is we're moving forward with the plan to sell the Kombat Mine. The most importantly, that sale of the mine is the mine and the stream and the existing liabilities with the mine. The dollar amount that we intend to take in represents CAD 1 - CAD 1.60 per share and gives us an opportunity now to look at our opportunities in Morocco and the Kalahari project as new ways to grow. This will all be subject to shareholder vote, but I think it really is a decision as a shareholder, looking at the hiccups that we've had in getting this mine started, which are to be expected. But more importantly, looking at the value that we've gotten for the operation and recognizing that we're not getting a lot of value in the market for what we've done, and that's limited our ability to capitalize the mine. Do stay tuned. There'll be more details as the week goes on, but the quick indication that we wanted to let the market know that a substantial amount of capital is coming in for the asset and that it is above and beyond any debt or liabilities that are associated with the asset. So at this time, I'll pause for the moderator if you wanted to open the floor for questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two, and if you are using a speakerphone, please lift the handset before pressing any keys. As a reminder, for any questions, please press star one now. Your first question comes from David Juranovic Oak Hill Financial. please go ahead. Hi, how are you? Just curious. You're selling an asset. How much capital is going to be raised? Did I miss that? Or how much money is going to be injected into Trigon? So we have an indicative term sheet, and it's $30-$50 million. I can tell you that, yeah. Yeah, it's $30-$50 million U.S. Okay. Thank you. That's all I wanted to know. I appreciate it. Great. Thank you. The next question comes from Stefan Knapp, a private investor. Please go ahead. I have a question about the results per share. You said I understood that you cash in roughly between $1-$1.20 per Canadian dollar per share. But the share price currently is trading at $0.55. Can you explain that? Not at all. Thank you. The next question comes from Doug Eichmeyer at CIBC Wood Gundy. Please go ahead. Hi, Jed. The $30-$50 million is a wide range. And do we know when it'll be more definitive? And the timing on that end, we're hoping that part of it, maybe a quarter, goes to Kalahari and a quarter to Safi, and the rest is dividended out to shareholders because I think we'd like to allocate it ourselves. Sure. Sure. Now, yeah, no, definitely there would be some dividends. We'll have to sit and look at it as a board of directors. This is all happening pretty quickly, but you do add a pretty interesting point that, yes, some of it could be used to develop those projects. As far as when clarity all through the balance of this week, we're pretty advanced. What would be the timing then on you receiving the money? Kind of potential dividend? It would have to go to shareholder vote, and the first amounts would be shortly after the shareholder vote. Okay. And a stock called Kombat Copper that's in Southern Namibia has pretty healthy market cap, like CAD 60 million. And from my understanding, the Kalahari has maybe equal potential. I'll get you to sort of elaborate on that. What I'll say is really, and hopefully I'm not going too far off script, right, but the capital markets have been really challenged for assets like Kombat. So smaller producing assets. I point to maybe a company like Atico, where you have a smaller production but real cash flow, some profitability. It's been hard to make the leap to larger market caps with that smaller level of production. But you're right. You note what's happening at Cobre, where you do have a larger resource. It's very early stage and able to garner a bit more market value. Pointing to Kalahari, I think Kalahari represents a really big opportunity in that that belt has produced some really fantastic deposits. We have on the Botswana side, Sandfire, with two resources on their ground, close to 100 million tons. Rennie, you would know the numbers really well. But they're enjoying a market capitalization of over $1 billion. Then you have the, actually closer to two, then Khoemacau, another project on that same belt of rocks that sold in November last year for $2 billion. So we know that we're in a really productive set of rocks, but it's a geology that produces really large deposits. And I think that's for the junior market where you need to be focused on the assets that can have that explosive upside. I think you're aware of that, Doug. It's always been a bit of a lottery ticket. And you're right. If we were to hold on to some of this capital, it would give us a pretty high ability to find that deposit that gives us that windfall return. So yeah, like I said, it's early days. I think we probably have the same opportunity also with Addana in Morocco. But more importantly, I think the outlook is no new dilution. That's what I think we've achieved here. Two other quick questions. There's a mention of a small royalty ongoing with the Kombat Mine. Also, well, I'll just let you address that first. Yeah. The details of which we'll put out. It's the mine. We already have the silver stream on that mine. There's also a government royalty. So we're not going to—we're aware we've done well to negotiate a small royalty that we'll get paid as well when it's taken over. Who is Orion for a little color there? So they are, let's say, a U.K.-based group. They do own, it would be best described as private equity, but they do own and operate a couple of other mines, both in Africa and one in the U.S. They've done extensive due diligence. I would imagine that this deal is pretty much set in stone. Yep. They've already done on-site due diligence. They've also talked to our off-takers, the stream. Yeah, it's very well advanced. Otherwise, there'd be nothing for us to say here. There's a reason why we're talking about it. Okay. Good. So again, later this week, potentially, we'll find out if it's closer to 30 or 50. Is that correct? That's correct. Okay. Thank you. All right. Thanks, Doug. Thank you. Next question comes from Ben Pirie at Atrium Research. Please go ahead. Hi, Ben. Hi, Jed. Thank you. Just on the debt and the acquisition value, $30-$50 million, does that include roughly $11 million that you guys have in debt, or is that on top of the $30-$50? The debt is all attached to the asset. So it goes with the asset. Okay. And then on the $30-$50. So the $30-50 would be for shareholders. The debt goes with the mine. Okay. Great. Great. And then on the large range, obviously, 30-50, I know Doug just mentioned and you guys discussed that it's going to be decided or determined within the week here. But what can you sort of give us on why that range is so large and what the asset needs to show in order to be at the upper end of that 30-50? If you're able to share. Yeah. I don't think I can go into much more detail. Just as we disclose through the week, you'll see it's more around timing of payments. Okay. Okay. No, the dollar value is not so much in question. Okay. Great. And then on Kalahari, could you just maybe update us quickly on what you guys have been doing over the last few months, if anything, on the project? And then, of course, subject to this transaction closing, do you have any plans in mind to accelerate exploration there? So I can answer the second question easier. So yes, there would be an acceleration there. As far as work that we've been doing, it's been around mainly geophysical work that we've done with our partners at the University of Münster in Germany. We have not done any drilling, but we are getting to a point where we've got targets, and that will follow. Okay. Thank you. And then the last question here, and I think this might just give you a table to comment on the share price performance of the last sort of hour here. Any comments on that? Obviously, we're looking at the value of this transaction between $1 and $1.60, but the stock's down on the news. I don't. Maybe just some. I can't really make sense of it. I've taken a look at some of the commentary online, and there seems to be some misunderstanding of debt, that somehow not all of this would be received by shareholders. So I think kind of speaking to your first question, that there may perhaps there's a misunderstanding that the debt you're talking about is literally the rolling equipment at the mine. So we use Epiroc Scooptrams and Boomers, the drills, and we've got a lease agreement. So that sits on our balance sheet as an $11 million debt. But obviously, the equipment is going to go with the mine. Similarly, there's the stream liability that sits on our balance sheet. There's no way for the stream is attached to the mine. And I think Rennie pointed it out, and then I reiterated that milestone that we hit in September of locking the stream in as a stream, and it does not revert back into debt, was very instrumental in a number of ways in setting us up to make a clean transaction here. Great. Okay. Understood on that. I appreciate that. That's all the questions I have. Thank you. All right. Thanks, Ben. Thank you. Ladies and gentlemen, as a reminder, should you have any questions, please press star one. The next question comes from Bereket Berhe at Beacon Securities. Please go ahead. Hey, Jed. And guys, I guess congratulations is in order. And in this market, you were able to get a decent or what I would call a fair sort of valuation. But Ben has asked most of my questions, the questions that I wanted to ask. So thanks, Ben. So the one only question that I, and obviously, it's been asked in one form or another so far, is that the value of Trigon itself is probably, say, about two to three times what you've been offered right now. What is your comfort level with these terms that you've got? Or are you taking this deal just because the market is what the market is right now? Okay. So I think it's a fair deal. Of course, there is a lot of value. But I tried to, the viewpoint that I've got is as a shareholder. I think many of you will know that I personally am a pretty substantial shareholder of Trigon. And what we were really contending with is looking at the market value that we're getting and recognizing that more equity was going to be required to move the project forward. And in the context of the market, that would force us to issue equity at levels below where most of our shareholders have participated in the past. So that's what we were weighing against the offer, that here we've got an opportunity to either we're in a situation where we raise more capital and dilute shareholders, push on, and try to look to achieve more value in a market that hadn't really been rewarding us for the value we were creating, or really stick a pin in the dilution. We still have what I would call a de-risked upside in both the royalty and successes of the mine. And then still give us an opportunity to, one, reward the shareholders who've been with us. And then still, we've got the upside of Kalahari and Addana, which I think might be better suited for the market that we're in, where exploration success on either of those projects has a real ability to garner a lot of shareholder value. What I would say, mega project exploration has been the one bright spot in a tough market. Really, we've got two of those in Trigon with Addana and Kalahari. We retain those, and we still get some good value for Kombat. Great. Maybe one small addition for me here. I covered the name, obviously. But I have a $3 target price for the project for the Kombat. It's up to 150 million mcap. And what I'm wondering is there's a lot of qualified people that are looking at the gap between what guys like us are valuing the project and the mine and the company and also relative to the offer that you're getting. That might invite some interlopers. And if that's the case, have you left enough time for interlopers to do enough of the due diligence and maybe give you another offer? Or is this very tight right now for anybody to kind of jump in here? The time from now to shareholder vote would definitely probably be in the area of two to three months. But as far as interlopers is, I really have no comment there. Okay. Great. No, that's all the questions I have from you, and I'll be surprised if there's no interlopers in this deal, but yeah, we'll see. Thanks. Thank you, Bereket. Thank you. The next question comes from Ryan Ivan at Enbridge. Please go ahead. Hey, Jed. Hi, Ryan. Hi, Ryan. How you doing? How you doing? Pretty good? Yeah. Yeah. All told, pretty good. That's good. Right on. I just had a question on how the stock's going to work in between now and the vote and the final sale. Are the shareholders going to be locked in, or is it going to be still openly traded on the market, or how does that work? Oh, yeah. No, we'll be openly traded. No, there's not. That won't be the case. Okay. So there won't be any buyout, or we won't be getting paid out if we're not locked in until the deal's done? Sorry? You won't be getting paid out. So it would have to close before there's any payout. Yes, that's for sure. But it'll be free trading stock. Free trading. Okay. Yeah. All right. I know there were other mergers and other stocks I've had before, and when the deal went in, people that had the stock at a certain date were locked in to a certain price, so that's how it's going to work. No, that shouldn't be the case. That should not be the case. Okay. So it'll still be publicly traded until the deal goes through? Exactly. Okay. Thank you. That's all I got. Thanks, Ben. Thank you. It appears that we have no. Oh, apologies. We do have a question just coming in from Gary Brink at Northern Insights Asset Management. Please go ahead. Good morning. Listen, I just wanted to ask, did you look at the possibility of a rights issue to fund Kombat? Secondly, why is there such a big range, $30-$50 million, when these guys have already done due diligence? And thirdly, is the breakage fee on the proposal? Yeah, for sure. So the breakage, I'll start in reverse. The breakage fee would be proportional to the amount loaned. So I think we detailed that there's a little bit that comes immediately, then it grows to 5 million. That would be the breakage fee. As far as the rights issue - Sorry. Sorry. If they loan you money, then the breakage fee is to give the loan back to them? Or is there something on top of the loan? There'd be a penalty, would be the amount loaned as well. So if it's $500,000 right now, then the penalty would be paying back plus $500,000. Okay. Great. Okay. Understood. And then, as far as rights issues, to be honest, Gary, raising new equity was not a big challenge. We did actually have offers for new equity. It was just at those lower prices. So, no, a rights issue wasn't really considered. But there were opportunities for new equity, unfortunately, just at lower prices. Okay. And if they've done due diligence, why is the range still $30-$50 million? You would think that it would have narrowed it down by now. What factors go into that range? It'll be made clear in a couple of days with some more details. Yeah. Yeah. All right. As you know, I'm emotionally attached to Kombat, and I'm sorry to see it go. But life will go on. Yeah. Yeah. Thank you. Thanks for the support, Gary. Thank you. The next question is a follow-up from Doug Eichmeyer at CIBC Wood Gundy. Please go ahead. Also in the emotionally attached club, given it's 10 years. My daughters, originally, I was going into this. My daughters were in grade eight, and they graduated from university three years ago. Aside from that, the vision was that we could probably fairly easily access debt or some sort of loan to double production this next year and then double it again the following year or so with Asis Far West, and we'd be producing 60 million pounds at $2, and we'd have $100 million annual cash flow. What happened to that vision? So, the debt is still there, potential. However, there was going to be a requirement for new equity before that debt was advanced. Was that such a bad thing? This is the decision that we think that given the share price, we've raised capital. The last capital we raised was at CAD 1. Prior to that was a CAD 1.50, I believe. Raising money further de-risked with the mine in operation at CAD 0.80 or CAD 0.60 was, in my mind, untenable. The concern with shareholders that I've spoken to is that we had an asset, a potentially very large producing asset, and now this cash will go into exploring, which is always a black, deep, dark hole that usually erodes value more often than not. So what sort of confidence can we have that it will actually be accretive to us this deal? Like I said prior, Doug, we haven't made a decision as to what's dividended and what goes into exploration. But what has been the experience is that we've been bumping up. We've been sitting in this range of market capitalization regardless of the stage of the asset. And that's what I—that was the calculus that we were looking at, that we could raise more capital, take on debt, and risk staying range-bound as far as value. So I think that value would have jumped if you would have raised the money to double production, and the market would value production and push your shares higher eventually in a strong copper market, which was always our vision. Perhaps. Perhaps. It just hasn't been the experience thus far. Yeah. It's almost like you let the market dictate you these terms. So like all the other options, could a Orion not have come in as a partner and shared booming production increases over the next few years? Someone like a Orion or XYZ partner? To sell, you're thinking that as a—to build the mine and grow it, you can get up to 60 million pounds a year, and you split it. But as a 50% holder - and I don't think this is a good place to discuss it, but as a 50% holder as a listed company, that generally doesn't translate into good market valuations. Okay. Very good, well, we'll watch the next week for further details, and hopefully, it's closer to the $50 million than the $30. Yes. Thanks, Jed. Okay. Thanks, Doug. Thank you. I'll pause for just a moment for any additional questions.