ExGen signs LOI to acquire silver stream from gold mine

Executive Summary

• ExGen Resources Inc. has signed a binding Letter of Intent (LOI) to acquire a silver stream on a past-producing gold mine in Chile through an arm's-length private company (PrivateCo).
• The transaction involves an upfront cash payment of $500,000 USD and establishes a tiered silver stream structure based on production volume.
• The agreement includes specific delivery terms, pricing mechanisms, and fallback provisions involving gold if silver production targets are not met.

Key Details

• Transaction Structure: Binding LOI to acquire a silver stream via PrivateCo, which is currently seeking to purchase the underlying property from private vendors via an option.
• Upfront Consideration: ExGen paid $500,000 USD to the vendors on behalf of PrivateCo.
• Stream Terms:
  • Tier 1: 33.4% silver stream on production up to 333,334 ounces of silver delivered.
  • Tier 2: 16.7% silver stream on any silver produced beyond the 333,334-ounce threshold.
• Delivery Price: ExGen will pay 20% of the spot silver price (determined by a major exchange agreed upon by the parties) for silver delivered.
• Minimum Delivery Requirements: PrivateCo must deliver a minimum of 4,200 ounces of silver per calendar quarter, starting in Q2 2027.
• Shortfall Provision: If the quarterly minimum silver delivery is not met, the vendor must compensate ExGen with an equivalent value of gold.
• Additional Rights: ExGen retains preferential rights to participate in any future streaming or royalty transactions by PrivateCo on the property.
• Next Steps: Parties may enter into a definitive streaming agreement containing terms customary for similar transactions.

Notable Quotes

• "ExGen has been evaluating various potential streaming and royalty deals and we are excited to have signed our first silver stream with this LOI." — Jason Riley, Chief Executive Officer of ExGen