Trigon Metals Inc has secured a N$39.1 million (US$2.5 million) loan from Sprott Mining Inc to fund its Kombat Mine operations in Namibia and for working capital purposes.
Sprott Mining is owned by Eric Sprott, who also owns an approximately 18.3% shareholding in Trigon, making the transaction a related party transaction.
“The Sprott Loan has a term of 180 days and will accrue interest at the rate of 12.0% per annum, payable in arrears,” said Trigon in a notice, adding that the loan was secured by security interest over all present and after acquired property of Trigon and Trigon Morocco.
According to the loan agreement, Sprott will have the right to direct or otherwise re-invest the principal amount of the loan into a stream of silver deliveries equal to 8.25% of the silver produced from the Kombat Mine.
The latest development comes hardly a few months after Trigon raised N$29.4 million (US$1,945 000) from a private placement, with net proceeds from the offering used for the recommencement of mining at the Kombat Mine.
The mining company recently shipped its first shipments of copper concentrate from Kombat Mine consisting of 31 dry metric tonnes of concentrate, grading 20.41% copper and 265 g/t silver.
Trigon last year entered into an agreement with IXM to acquire 100% of the production from the Kombat, in exchange for a US$5 million project finance facility for the restart of the mine.
IXM, owned by the listed CMOC group, is a global merchandiser of base and other non-ferrous metals, already active in Namibia.
Established in 1962, Kombat Mine was forced to shut down in 2008. At the close of 2021, Trigon resumed production at Kombat Mine following 14 years of closure.
