Trigon Metals Inc has secured N$470 million funding for its Kombat Mine in Namibia in exchange for a silver and copper stream agreement with Sprott Resource Streaming and Royalty Corp and Sprott Mining Inc.
According to the terms of the agreement, the Canada-based miner shall sell and deliver to Sprott 100% of silver produced from the Kombat Mine and 3.15% copper stream, commencing when phase one underground mining begins at Kombat.
“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 said.
“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.”
Of the N$470 million funding, N$427.6 million will be provided by Sprott Streaming, while N$42.76 million will be provided by Sprott Mining.
“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. The Company may buy back up to 50% of the Stream in a single payment by paying in cash to Sprott Streaming.”
Metals streaming is a term when a company makes an agreement with a mining company to purchase all or part of their precious metals production at a predetermined discounted price to which both parties agree.
“We are very pleased to be partnering again with Sprott Streaming and Sprott Mining,’ said Jed Richardson, President and CEO of Trigon. 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.”
The latest development comes after the company recently secured a N$39.1 million (US$2.5 million) loan from Sprott Mining Inc in May to fund its Kombat Mine operations and for working capital purposes.
The expansion of the Kombat Mine is projected to increase annual copper production and reduce forecasted operating costs.
Established in 1962, Kombat Mine shut down in 2008. At the close of 2021, Trigon resumed production at Kombat Mine following 14 years of closure.
