Trigon Metals Inc. has signed a definitive agreement with Sprott Private Resource Streaming and Royalty Corp. and Sprott Mining Inc. for a N$680 million copper stream for its Kombat Mine in Namibia.
This is an increase from the original amount of N$498.8 million which Trigon announced in July, 2022, after it had signed a non-binding term sheet with Sprott.
Under the streaming transaction, Trigon will deliver to the investors 100% of the silver produced at the Kombat Mine. Proceeds will primarily be used to expand the plant capacity to 60,000 tonnes per month and complete ongoing works to dewater the mine, develop the Asis West underground mine.
The advance amount under the stream agreement will be comprised of N$680 million in cash payments, with an initial tranche of N$272million advanced on October 24, 2022.
Kombat said N$47.1million of the initial advance was allocated to repayment of amounts owned to Sprott Mining under a loan agreement dated May 24, 2022, and N$99.8million was used to repay the principal under a convertible security funding agreement with Lind Global Fund 11 LP
The payment of the remaining N$47.1 million will be advanced upon the establishment of a deposit holding account subject to an agreement in the form satisfactory to the investors with financial institution and other standard closing conditions.
Trigon will receive 10% of spot as payment for all silver and copper into the stream as determined on the second day prior to the relevant delivery, with the balance applied as a credit to the advance amount. Following depletion of the advance amount, Trigon will receive 10% of spot as payment for all silver and copper delivered into the stream.
Alongside the silver delivered into the stream, long-term Trigon will deliver 1.625% of the copper production, in recognition of the N$181.4 million added to the agreement since the July 20th announcement of the term sheet.
The copper stream will start at 0% while mining from the open pit, increase to 6.5% during the in-term period of underground mining from Asis West until production from Asis Far West commences when it falls to the long-term rate of 1.625% if certain production targets are met.
The announcement that a definitive deal has been signed comes after Trigon recently announced that it had revised the mine plan to optimize production based on new information from mining the Kavango Pit.
In an August announcement, the company said it had noted marked improvements on grade control and recoveries and was pausing operations to focus the mine plan on this type of mineralization to reduce mine wide operating costs at Kombat.
Trigon is a Canadian exploration and development company with a focus on copper and silver holdings in Africa, with operations in Namibia and Morocco.
