Trigon Metals Inc. has received an indicative term sheet from Horizon Corporation Limited for a proposed loan of US$5 million to allow for the conclusion of the evaluation and due diligence for a sale of 100% of its ownership interest in the Kombat Mine in Namibia to Horizon.
The Proposed Transaction remains subject to certain conditions, including the completion of satisfactory due diligence, the negotiation and execution of a definitive agreement between Trigon and Horizon, third-party approvals, shareholder approval and regulatory approval.
The term sheet includes a range of US$30-50 million in cash and a limited royalty that would be paid to Trigon from the copper production at the Kombat mines.
Horizon will loan Trigon US$5 million as follows:
US$500,000 within 7 days of entering into a binding loan agreement US$2 million in December 2024, subject to satisfying certain closing conditions, including Horizon receiving satisfactory security for the loan, entering into binding documentation for the proposed transaction and Horizon completing its preliminary due diligence of the Proposed Transaction; and US$2.5 million within 45 days of the Tranche 2 Payment.
The loan shall have a term of 24 months and an interest rate per annum of 15%.
Trigon will grant Horizon exclusivity to finalize the asset sale agreement in exchange for the advancement of the loan, with a break-free proportional to the amount of the loan that has been advanced.
In addition to the proceeds of the Proposed Transaction, Trigon Metals will retain the Kalahari Copper Project in Namibia.
They will also benefit from the planned spinout of the Safi Silver Moroccan exploration projects and the Silver Hill and Addana Silver Polymetallic projects.
Jed Richardson, CEO and Executive Chairman of Trigon Metals, commented, “Agreeing to a sale of the Kombat Mine, is a very difficult decision. We are pleased that Horizon has come forward with a competitive offer for the Kombat Project, with a commitment to make the future investments to fully realize the growth and potential of the project. The Proposed Transaction would cap dilution and offers shareholders risk free benefit from the future success of the asset. We look forward to working closely with Horizon to settle final terms, reach definitive agreements and complete the Proposed Transaction.”
Bradley Rawson, Executive Chairman of Horizon Corporation, “We are currently active in both sub-Saharan Africa as a mining region and copper production as a business, so we view this transaction as a good opportunity to add to our portfolio of assets and to extend our working history in Namibia. Our group is looking forward to growing the Kombat Mine by working with the local team and the Namibian authorities to ensure a positive outlook for our stakeholders, Trigon shareholders and the local community.”
The Proposed Transaction is an Arm’s Length Transaction according to the rules of the TSX Venture Exchange.
