Trigon Metals says it could receive an additional N$222 million (US$13 million) as Horizon Copper advances plans to restart production at the Kombat Mine, potentially increasing the total value of the transaction to roughly N$718 million (US$42 million).
Trigon CEO Jed Richardson said the bonus payment is tied to copper prices and Horizon’s production targets.
With copper currently trading above US$10,000 per tonne, he said the conditions for the bonus are increasingly favourable.
“The royalty, if it stays around a million, then adds another 5 million, bringing us to about US$42 million in total consideration for the asset. There are a couple of other scenarios if metal prices continue to accelerate. There’s an outside chance that we could get that US$13 million payment even sooner if copper reaches $15,000 a ton. At that amount our royalty becomes pretty interesting as well,” Richardson said.
The transaction, now nearing completion following approval from the Namibian Competition Commission, will see Trigon receive N$410 million (US$24 million) in structured payments, beginning with N$51.2 million (US$3 million) every three months from April next year.
Trigon has already received an advance of N$34.2 million (US$2 million), which it will retain once the deal closes.
The agreement also extinguishes all outstanding debts owed to Horizon, leaving Trigon debt-free and funded for its exploration work in Morocco.
Under the deal, Trigon will earn a 1% copper royalty for five years, payable quarterly while copper prices remain above US$4/lb.
The company said the royalty could deliver around N$4.27 million (US$250,000) per quarter, rising to N$8.54 million (US$500,000) if Horizon increases throughput after the restart.
Richardson said Horizon has already started work at Kombat, including dewatering, upgrades to ore-sorting systems, and construction of a lead circuit to recover lead historically mined at the site.
