DALLAS, TX / ACCESSWIRE / March 8, 2022 / Trilogy Metals Inc. (NYSE:TMQ): The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/TMQ Q4FY21.pdf
COMPANY DESCRIPTION
Trilogy Metals Inc. is a base metals company that is committed to the exploration and development of the Upper Kobuk Mineral Projects (UKMP) located in the Ambler Mining District of Alaska. Trilogy's major projects are the Arctic copper-zinc-lead-gold silver project and the Bornite copper-cobalt project. In February 2020, the Company and Australia's South32 Ltd. (ASX: S32) entered a 50/50 joint venture called Ambler Metals LLC ("Ambler Metals"), which holds these assets. Based out of Vancouver, Canada, the Company is currently working on expanding its mineral resources and the development of the Arctic project and exploration of the rest of the UKMP.
SUMMARY
- The Arctic copper-zinc-lead-gold-silver project has been surveyed and explored since 1967 and as of August 2020, Trilogy announced a positive feasibility study result where a 10,000 tonnes per day (tpd) operation has a minimum mine life of 12 years. The feasibility study arrives at an after-tax NPV8% of $1.1B and an after-tax IRR of 27.1% for its base case. At current spot metals prices, the after-tax NPV8% is $2.8B and an IRR of 47.1%.
- The Company owns 50% of the JV, Ambler Metals LLC, which owns 100% of the Arctic project, the Bornite project, and the rest of the UKMP. The Bornite project has returned impressive grades of copper and cobalt, which provides additional upside for resource growth. To this point, Trilogy has had to place limited resources into the Bornite project as an option agreement with South32, which has provided most of the finances for the project.
- Both of Trilogy's projects are in the Ambler Mining District of Alaska, which is a lower risk mining jurisdiction. The Company has support from the local government, NANA (a regional native corporation), and from the Alaska Industrial Development and Export Authority, a state-owned infrastructure bank. Importantly, the infrastructure bank is advancing the road access.
- In April 2017, TMQ entered into an agreement with South32 which granted South32 the option to form a 50/50 joint venture which would hold all of Trilogy's assets. To keep the option in good standing, South32 was required to contribute a minimum of $10M/yr. for three years, then the option to form a JV with Trilogy was available by making a payment of $145M to the JV. Since 2017, South32 kept the agreement in good standing and in December 2019, exercised its option for the 50/50 JV that owns the assets in the UKMP.
- Trilogy should continue to benefit from its copper rich assets as the demand for copper is expected to outpace supply over the mid and long term.
- Trilogy has the support of a key Alaska native corporation, NANA, which greatly increases its chances of receiving all the necessary permits and permissions for building its operations.
- The Company has strong ownership from key shareholders and insiders. The top five shareholders consisting of Electrum Group, South32 Ltd., Paulson & Co., Baupost Group, Bernard Selz, TSP Capital, Manulife, and management/BOD own approximately 62% of the shares outstanding.
- Based on our DCF analysis of TMQ, we arrive at a valuation range of $2.50 to $4.25, with a midpoint of $3.25 see page 7 for further details.
About Stonegate Capital Partners
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.
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SOURCE: Stonegate Capital Partners