Trigon Metals closes sale of Kombat mine interest

Executive Summary

• Trigon Metals Inc. has completed the sale of its interest in the Kombat mine and associated assets to Kamino Minerals Ltd. (via affiliate Horizon Corp. Ltd.).
• The transaction provides Trigon with a total cash consideration of $24 million (U.S.), structured as eight equal installments, significantly strengthening its balance sheet to fund exploration at its Addana copper project in Morocco.
• Additional consideration includes a production payment tied to copper output, a 1.0% net smelter return royalty, and a reduction of $3,975,494 (U.S.) in existing debt owed to Horizon.

Key Details

• Transaction Structure: Acquisition of 100% of shares in Kombat Streamco Corp. (Trigon Ontario), 100% of shares in PNT Financeco Corp. (holding company for Namibian assets), and an intercompany loan from PNT to Trigon valued at $57,560,875.
• Cash Consideration: Total of $24,000,000 (U.S.), comprising $1.00 (U.S.) for Trigon Ontario shares and $23,999,999 (U.S.) for PNT shares and the loan.
• Payment Schedule: Cash consideration settled in eight equal installments. First installment payable April 4, 2026. Subsequent installments payable every three months.
• Purchase Price Adjustment: Adjustments for outstanding liabilities to IXM S.A. and Sprott, applied equally to the first four installment payments.
• Production Payment: An additional cash payment between $3,500,000 (U.S.) and $13,000,000 (U.S) payable 30 days after underground operations achieve ore production and processing of 4,500 tonnes of contained copper over a 90-day period. Amount depends on copper price.
• Royalty: 1.0% of copper net smelter returns (NSR) on a per invoice basis, payable if copper price > $4.00/lb. Cap: 20 quarters with eight allowable deferrals. Payments commence after 1,000 tonnes of copper metal production for two consecutive calendar months. Royalty paid exclusively from Horizon's equity ownership.
• Debt Reduction: Amount payable by Trigon to Horizon under a loan agreement reduced by $3,975,494 (U.S.).
• Default Clause: If purchaser defaults, Trigon can reacquire shares for nominal consideration plus $300,000 (U.S.) penalty.
• Preclosing Reorganization: Trigon transferred rights/obligations under the Sprott Stream to Trigon Ontario and was released from security/guarantees. PNT transferred 100% interest in Copperbelt Mineral Exploration Pty. Ltd. to Trigon.
• Horizon Loan Details:
  • Pre-closing loans advanced: $10,066,999 (U.S.).
  • Post-closing payable amount reduced to: $2,436,769 (U.S.).
  • Remaining loan bears 15% interest.
  • Non-project loan matures Dec 23, 2026 (settled against production payment if triggered).
  • Additional loan matures on date of eighth installment (settled against that installment).
  • Secured by general security agreement over all company assets.
• Finders' Fees: Brightmind Ventures Ltd. entitled to ~$720,000 (U.S.) fee, paid in five installments matching the cash consideration schedule (First: $173,550.72; Remaining: $149,999.99 x 3; Final: $96,449.30).
• Conditions Satisfied: Shareholder approval, Namibian competition commission approval, Sprott consent, and conditional TSX Venture Exchange approval.

Notable Quotes

• "This transaction marks an exciting new chapter for Trigon. By completing the sale of the Kombat mine, we are now fully funded to focus our efforts on the Addana project, a highly prospective copper asset in Morocco that we believe will define the company's next phase of growth." — Jed Richardson, CEO and Executive Chairman