Trigon Metals Pursues Strategic Sale of Kombat Mine Assets

Trigon Metals Explores Sale of Kombat Mine

Trigon Metals Inc. (TSX-V: TM) is actively engaged in discussions regarding the sale of its Kombat Mine. The company has recently received an indicative term sheet from Horizon Corporation Limited for a proposed loan of USD$5 million. This financial infusion is intended to support the completion of evaluation and due diligence ahead of the potential sale of Trigon’s entire stake in the Kombat Mine in Namibia.

Overview of the Proposed Transaction

The terms of the Proposed Transaction are still under discussion and dependent on several conditions, such as satisfactory due diligence, negotiation of definitive agreements between Trigon and Horizon, and the requisite approvals from third parties and the TSX Venture Exchange.

Key Financial Highlights

The indicative term sheet outlines a possible consideration ranging between USD$30 million and USD$50 million in cash along with a limited royalty arrangement based on copper production from the Kombat Mine. The structure of the proposed loan includes:

• An initial USD$500,000 payment scheduled within a week following the signing of a binding loan agreement.
• A subsequent payment of USD$2 million planned for December of the following year, contingent on certain closing conditions, including Horizon obtaining satisfactory security for the loan.
• Finally, a third installment of USD$2.5 million within 45 days following the second tranche payment.

The loan is proposed to have a term of 24 months with an annual interest rate set at 15%.

Exclusivity Agreement

To facilitate this loan agreement, Trigon is expected to grant Horizon an exclusivity period to negotiate and finalize an asset sale agreement. This exclusivity will include a break fee tied proportionally to the amount of the loan that is advanced.

Future Prospects Beyond Kombat Mine

Besides the revenue anticipated from the Proposed Transaction, Trigon Metals will also retain its Kalahari Copper Project in Namibia. Additionally, the company is on track with plans to spin out its Moroccan exploration projects, which include the Safi Silver, Silver Hill, and Addana Silver Polymetallic projects. These initiatives exemplify Trigon's commitment to sustained growth and development in the region.

Leadership Comments

Jed Richardson, the CEO and Executive Chairman of Trigon Metals, expressed the difficulty of deciding to sell the Kombat Mine, underlining that this decision was not made lightly. He stated, "The proposal from Horizon is competitive, demonstrating a commitment to invest in the project's potential growth. This transaction could minimize shareholder dilution and provide a risk-free means for future asset success. We eagerly anticipate collaborating with Horizon to finalize the terms and execute this agreement.”

Bradley Rawson, Executive Chairman of Horizon Corporation, added, "Our active engagement in the sub-Saharan African mining sector aligns perfectly with our strategic goals. We see this investment as an excellent opportunity to enhance our asset portfolio and deepen our roots in Namibia. We are committed to collaborating with local teams and authorities to support the Kombat Mine’s development and ensure beneficial outcomes for stakeholders, Trigon's shareholders, and the local community."

Conclusion

The Proposed Transaction represents a significant strategic move for Trigon Metals as it continues to position itself for future successes in the copper and silver mining sectors across Africa. By focusing on well-structured financial agreements and exploring beneficial partnerships, Trigon is laying the groundwork for enhanced value to its shareholders while maintaining its operational foothold in key mining jurisdictions.

Frequently Asked Questions

What is the Proposed Transaction about?

The Proposed Transaction involves Trigon Metals receiving a loan from Horizon Corporation to facilitate the sale of its Kombat Mine.

What are the conditions of the Transaction?

The Transaction is subject to satisfactory due diligence, negotiation of definitive agreements, and necessary regulatory approvals.

How much is the proposed loan from Horizon?

The proposed loan amounts to USD$5 million, structured in various tranches based on conditions being met.

What will happen to the Kombat Mine after the sale?

Trigon Metals will still benefit from royalty arrangements based on future copper production, even post-sale.

What other projects does Trigon have?

Alongside the Kombat Mine, Trigon retains interests in the Kalahari Copper Project and is planning to spin out its Moroccan silver exploration projects.

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