Trigon Metals has entered a definitive share purchase agreement with Horizon Corporation (Horizon) and its affiliate Kamino Minerals for the sale of its interest in the Kombat project in Namibia.
The $24m transaction follows a binding term sheet and due diligence by both parties.
The transaction will see Kamino acquire 100% of the shares in Trigon Ontario, PNT Financeco and the intercompany loan owed by PNT to Trigon.
Before closure, Trigon will undergo an internal reorganisation, transferring all rights and obligations under its stream agreement with Sprott to Trigon Ontario and transferring a portion of the PNT loan to ensure that Trigon Ontario’s net asset value is $1.
Kamino will pay Trigon $24m in cash, with $1 for the shares in Trigon Ontario and the remainder for the shares in PNT and the PNT loan.
The payment will be made in eight equal instalments, with the first due nine months after Trigon shareholder approval or upon the transaction’s close.
Trigon executive chairman and CEO Jed Richardson stated: “With the signing of the definitive agreement, we are taking the final steps toward securing shareholder approval. Upon a successful vote, $2m will be advanced to Trigon, forming part of the $24m we will receive ahead of the official closing process.”
The sale agreement removes the need for additional debt financing and includes a production payment to Trigon based on the project’s output, ranging from $3.5m to $13m.
Additionally, Trigon will receive a 1% royalty on copper net smelter returns from the project, payable if the copper price exceeds $4 per pound.
The royalty is due for up to 20 quarters with eight deferrals and is contingent on the project producing 1,000 tonnes of copper for two consecutive months.
Trigon Namibia founding shareholder Knowledge Katti stated: “Horizon’s proven experience in the mining sector positions them to successfully reopen the mine, creating much-needed jobs for our community. The people and children of the Kombat area urgently need this project to resume operations, as it will significantly boost living standards and bring economic hope to our region.”
Minmetals Securities provided market analysis support for the transaction.
The transaction is subject to approval by Trigon shareholders and other closing conditions, including approvals from the Namibian Competition Commission, Sprott and the TSX Venture Exchange.
