Trigon Metals Inc. has amended the agreement with Horizon Corporation Limited for the sale of its 80% ownership interest in the Kombat Mine, making significant adjustments to improve the transaction's financial structure and maintain strategic benefits for shareholders.
Key amendments outlined include reducing the principal amount of the loan from Horizon to Trigon from $5,000,000 to $4,000,000, structured through five tranches. The deal also ensures Horizon will invest $500,000 as part of Trigon’s private placement offering. An optional loan of $2,000,000 has been introduced, granting Trigon additional financing flexibility prior to obtaining shareholder approval for the transaction.
The purchase consideration for the Kombat Mine has been modified from $30,000,000 to $24,000,000, to be paid in eight equal quarterly installments. Crucially, subsequent payments hinge on securing third-party debt financing of at least $10,000,000 for the mine's development within 18 months of approval. If this financing fails to materialize, Horizon can choose to initiate payments or return 90% of the Kombat shares, converting its capital to debt repayable by Trigon.
Further adjustments specify payment terms relating to outstanding liabilities with IXM S.A. and Sprott Private Resource Streaming and Royalty. There is also now a follow-on payment structure linked to the London Metal Exchange copper prices and expansions at the Kombat Mine. These changes reflect Trigon's commitment to ensuring operational and financial efficiencies moving forward.
Jed Richardson, CEO and Executive Chairman of Trigon, emphasized, "The revised terms of the sale of Trigon’s interest... will benefit shareholders by reducing dilution and securing financing for other projects." This statement showcases the company’s strategic realignment to prioritize effective use of capital and resources.
Horizon’s Executive Chairman, Bradley Rawson, shared enthusiasm about the revised agreement, noting, "We remain excited about the opportunity to build on the Kombat Mine’s legacy..." This partnership indicates Horizon's resolute commitment to advancing the Kombat project's potential, enhancing both operational efficiency and developmental support.
Knowledge Katti, a Namibian businessman and partner of Trigon Metals, reflected on the broader impact of the deal. He noted, "This deal is not just a win for the mine and its investors—it’s transformative for the communities surrounding the Kombat Mine..." Katti's sentiments highlight the social responsibilities embedded within the mining sector, emphasizing sustainable development and local employment opportunities.
Trigon is also set to complete a private placement of up to 6,800,000 common shares at $0.25 each, raising gross proceeds of up to $1,700,000. The offering is pending necessary regulatory approvals, with expected closure around February 20, 2025.
All securities issued will carry a statutory hold period of four months and one day. The proceeds are earmarked for working capital and other corporate necessities, aligning with Trigon’s strategic directions.
Trigon is publicly traded and focuses on copper and silver holdings predominantly within mine-friendly African jurisdictions such as Namibia and Morocco. The company is underscored by its 80% interest across five mining licenses situated amid high-grade copper deposits within Namibia’s Otavi Mountainlands. This emphasis on regional resource potential enables Trigon to advance significant projects, reinforcing its market positioning.
Though the term sheet for the Kombat Mine deal remains non-binding and lacks definitive agreement status, the modifications signify strong cooperative intentions between both parties. With pending shareholder approval and other regulatory requirements, Trigon anticipates continued dialogue with Horizon to finalize the transaction.
Looking forward, both Trigon and Horizon aim to capitalize on the Kombat Mine’s extensive legacy, promoting initiatives aligned with economic and social growth within Namibia’s mining community.
Nevertheless, the road to completion is paved with careful management of financial, operational, and regulatory hurdles, as both companies seek to realize their visions for the Kombat Mine amid promising resource prospects.