This morning, Trigon Metals announced it has entered into a non-binding term sheet with Sprott Resource Streaming and Royalty Corp. and Sprott Mining Inc. for a US$27.5M silver and copper stream for the Kombat Mine in Namibia. We view this news as a major catalyst for the Company as the funds will be used to quadruple production over the next 2-3 years while dramatically reducing costs. We expect the Company to trade at 2x today’s value based on the expected ~C$30M of cashflow in 2024 with peers currently trading at 2.1x 2024E P/CF.

Stream Terms: TM agreed to sell 100% of the silver produced from the Kombat Mine to Sprott with an additional stream of 3.15% of copper produced commencing when phase one underground mining begins and terminating when phase two begins at Asis Far West. The US$27.5M will consist of US$25M from Sprott Streaming, and US$2.5M from Sprott Mining. The US$2.5M (9.1% of the stream) shall set-off against the US$2.5M loan from Sprott Mining announced on May 24th, 2022. Most importantly Trigon may buy back up to 50% of the Stream in a single cash payment to Sprott Streaming with a pre-determined multiple depending on the year of payment (Table 1).

The Stream significantly de-risks the project as the operation is no longer capital constrained and can begin the various activities planned for operational growth. These growth projects include:

• Ramp open-pit drilling – Management feels there remains significant opportunity for open-pit resource growth (drilling is ongoing)

• Upgrade the Mill – There exists a bottleneck in the crushing and grinding circuit which will now be upgraded with the new capital

• Dewatering – Begin de-watering activities of the underground workings

• Underground Fleet – The Company plans to acquire an underground mining fleet as it plans to operate the underground mining inhouse (vs. the current contracted open-pit workforce)

• Re-establish Services

• Resource Growth – Once the underground is de-watered, TM plans to initiate a large drilling campaign with a focus on growing the high-grade resource substantially

The above growth initiatives combined will allow the Company to ramp production from the current 8 Mlbs of copper concentrate per year to the planned ~30 Mlbs by 2024. In addition, TM has provided production guidance out to 2027 where production will further ramp to ~69 Mlbs/yr. We also note that during this period cash costs are expected to drop from the current range of $3.00-3.50/lb to $1.75-2.00/lb by 2026.

Catalysts:

• Kombat Drill Results

• Kombat Commercial Production Announcement

• Silver Hills Drill Results

• Growth Initiative Milestones