Trigon Announces US$27.5 Million Silver Streaming Term Sheet with Sprott Streaming
Trigon Announces US$27.5 Million Silver Streaming Term Sheet with Sprott
Streaming
TORONTO--(BUSINESS WIRE)--July 20, 2022--Trigon Metals Inc. (TSX-V: TM) (“Trigon”
or the “Company”) is pleased to announce that it has entered into a non-binding term sheet with
Sprott Resource Streaming and Royalty Corp. ("Sprott Streaming") and Sprott Mining Inc.
(“Sprott Mining”, collectively the “Investors”) for a US$27.5 million silver and copper stream
(the "Transaction") for its Kombat Mine located in Grootfontein, Otjozondjupa Region of
Namibia.
The Streaming Transaction
Pursuant to the Transaction, Trigon shall sell and deliver to Sprott 100% of silver produced from
the Kombat Mine. The 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.
The funds advanced as determined by Sprott Streaming include value for the open pit mine
currently being operated from; the phase one underground development of the historic Kombat
mine, and the phase two underground development of the Asis Far West mineralization. The
phase two underground development takes advantage of a 750m, 2,000 tpd production shaft that
is built and ready for operation. However, the Asis Far West area of mineralization has not been
quantified into an NI43-101 Resource Estimate nor has an economic study been completed for
this phase of the development. As part of the Transaction, Sprott Streaming will 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.
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. 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.
2024 1.37x $18,837,500
2025 1.40x $19,250,000
2026 1.43x $19,662,500
2027 1.47x $19,477,500
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 (please refer to the
Company’s news release).
Subject to the approval of the TSX Venture Exchange (the “TSXV”), 2,500,000 warrants (the
“Stream Warrants”) will be issued to Sprott Mining replacing the 2,500,000 warrants that were
issued on May 24, 2022 to Sprott Mining (Please see the Company’s press release dated May 24,
2022). It is contemplated that each Stream Warrant will, if issued, have a strike price at a 35%
premium to the 5-day VWAP share price for the 5 days prior to the execution of the definitive
stream agreement (or such other exercise price as agreed to by the parties and as may be required
by the TSXV) and will be exercisable for one common share of the Company for a term of three
years (or such other term as required by the TSXV) and will otherwise have customary
adjustment provisions. The Stream Warrants (and the underlying common shares, if the Stream
Warrants are exercised within four months of their issuance), shall be subject to a four-month
statutory hold period.
The Transaction is subject to certain customary closing conditions including the parties entering
into definitive documentation, satisfactory completion of due diligence by Sprott Streaming and
TSXV approval.
Jed Richardson, President and CEO of Trigon, said, "We are very pleased to be partnering again
with Sprott Streaming and Sprott Mining. This deal is of singular importance because it
accelerates and funds our feasibility study and development works at the Kombat Mine. It is a
timely deal, as well, since our present operations have progressed to the point where we can now
initiate expansion plans that will improve our strong position even more. The ability to
repurchase 50% of the silver stream is an important feature of this agreement, and ultimately was
the deciding factor in choosing to work with Sprott Streaming. We remain bullish on silver and
further exploration success, and the repurchase rights give us an option to restore that exposure
for our shareholders.”
Trigon Metals Inc.
Trigon is a publicly-traded Canadian exploration and development company with its core
business focused on copper and silver holdings in mine-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 project, a highly prospective copper and silver exploration project.
Cautionary Notes
This news release may contain forward-looking statements. These statements include statements
regarding the Transaction, the production of the Kombat Mine and Asis Far West, the economic
viability of the Kombat Mine,, the Company’s strategies and the Company’s abilities to execute
such strategies, the Company’s expectations for the Kombat project, and the Company’s future
plans and objectives. These statements are based on current expectations and assumptions that
are subject to risks and uncertainties. Actual results could differ materially because of factors
discussed in the management discussion and analysis section of our interim and most recent
annual financial statements or other reports and filings with the TSX Venture Exchange and
applicable Canadian securities regulations. We do not assume any obligation to update any
forward-looking statements, except as required by applicable laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accept responsibility for the
adequacy or accuracy of this release.
Contacts
For further information, contact:
Jed Richardson
+1 647 276 6002
Website: www.trigonmetals.com