(Kitco News) - Trigon Metals (TSX-V: TM) informed today that it has entered into a non-binding term sheet with Sprott Resource Streaming and Royalty and Sprott Mining for a US$27.5 million silver and copper stream for its Kombat mine located in Namibia.
According to a press-release, the US$27.5 million consists of US$25 million from Sprott Streaming, and US$2.5 million from Sprott Mining. The US$2.5 million (9.1% of the stream) from Sprott Mining shall set-off against the US$2.5 million loan from Sprott Mining announced on May 24, 2022.
The company said that pursuant to the transaction, Trigon shall sell and deliver to Sprott 100% of silver produced from the Kombat mine, adding that expansion of the Kombat mine is projected to increase annual copper production and reduce forecasted operating costs.
Proceeds will be used to complete ongoing works to dewater the mine, re-establish services, and continue exploration drill work, as well as to deliver a National Instrument 43-101 Compliant Feasibility Study for underground mining and for general corporate and working capital purposes.
Trigon also said that the silver stream is for the life of mine, restricted to the Kombat project and does not include the Silver Hill project or any new project Trigon may acquire.
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Importantly, at its election, the company may buy back up to 50% of the stream in a single payment by paying in cash to Sprott Streaming, the indicated multiple of the drawn advanced payment below on or before June 30 of the indicated year; after June 30, the buyback amount would refer to the following year. After June 30, 2027, the buyback right expires.
As part of the transaction, Sprott Streaming will also receive a 3.15% copper stream commencing when phase one underground mining begins that will terminate when mining phase two begins at Asis Far West.
Trigon is a publicly-traded Canadian exploration and development company with its core business focused on copper and silver holdings in mining-friendly African jurisdictions. Currently, the company has operations in Namibia and Morocco.
In Namibia, the company holds an 80% interest in five mining licences in the Otavi Mountainlands, an area of Namibia widely recognized for its high-grade copper deposits, where the company is focused on exploration and re-development of the previously producing Kombat mine. In Morocco, the company is the holder of the Silver Hill copper and silver exploration project.
