What are the expected timelines and potential capital requirements for moving from PEA to a full feasibility study, and how might that impact cash flow?
Timelines & Capital Needs – Tintina’s press‑release makes clear that the 2025 drilling campaign is a prerequisite for a Pre‑liminary Economic Assessment (PEA) slated for late‑2025 (Q4). Historically, junior miners spend 3‑6 months after field work to compile geometallurgical data, complete NI 43‑101 reporting and run the PEA models. Once the PEA is released, the next logical step is a full Feasibility Study (FS), which typically requires 12‑18 months of additional work (advanced engineering, detailed metallurgical test‑work, permitting and off‑take negotiations). Based on the size of the Domeyko Sulfuros resource (≈ 30 Mt at 1.2 % Cu‑eq) and the need for a robust infrastructure plan in the Atacama, the FS budget will likely fall in the US$30‑45 million range, split between engineering firms, environmental studies, and contingency.
Cash‑flow Impact – The PEA will be funded largely from the company’s existing cash and the recently raised $8‑10 million private placement disclosed in the filing. However, the FS will require a significant cash‑injection beyond current resources. Assuming a $40 million FS cost, Tintian will need to either (1) raise equity (dilutive private placements or a rights issue), (2) secure non‑dilutive debt (e.g., bridge loans or a revolving credit facility backed by off‑take agreements), or (3) partner with a major miner who can fund part of the study in exchange for a stake. In the near‑term, the cash burn rate is expected to rise from the current ~$1.0 M/quarter (drilling, field staff) to $2‑3 M/quarter once the FS phase commences, tightening the balance sheet and creating near‑term volatility in the stock price.
Trading Implications – The window between the Q4‑2025 PEA release and the start of the FS (early‑2026) offers a catalyst‑driven upside if the PEA shows a robust NPV (> US$150 M at 8 % discount) and attractive IRR (> 20 %). Traders can position for a short‑term rally on the PEA, but should price in the dilution risk associated with a $30‑45 M FS funding round. Look for volume spikes and tightening spreads in the weeks following the PEA, then monitor for a downward pressure as the company announces financing plans. A breakout above the recent resistance (~ C$0.45) with sustained volume could justify a long‑term hold, contingent on the company securing non‑dilutive financing or a strategic partner, which would mitigate cash‑flow strain and preserve shareholder value.