Denarius secures US$9.0 million prepayment facility
Denarius Metals Corp. [DMET-NEO, DNRSF-OTCQX] said it has finalized a prepayment deal with Trafigura Pte. Ltd., a leading global commodities group, under which Denarius will receive US$9.0 million.
The funds received from Trafigura will fully fund the completion of construction activity at the Zancudo project in Colombia during 2025l,
In April 2024, Denarius agreed to commercial terms with Trafigura for the sale at market prices of 100% of the high-grade gold-silver concentrates to be produced at Zancudo over the next eight years.
Denarius also said it had received US$5 million in cash from the recent sale of a 3.0% NSR royalty on future production from Zancudo to a syndicate of third-party private investors.
In its latest press release, the company said it expects to receive the first advance of US$2.5 million in the next five weeks, and will receive the balance of the proceeds in two further advances that will be funded as the company reaches prescribed milestones during the completion of construction.
The advance, together with interest capitalized during the nine-month period following the date of the first advance (the Grace Period), will be repaid, with interest, from production during the 26 months following the Grace Period. The facility is secured by certain assets of the company related to the Zancudo project.
In conjunction with the execution of the facility, the company has agreed to issue 3.0 million common share purchase warrants to Trafigura with an exercise price of 74 per share that will expire on February 7, 2028. The Trafigura warrants are subject to a hold period expiring June 8, 2025.
Denarius shares were unchanged at 69 cents on Monday and trade in a 52-week range of 80 cents and 51 cents.
Denarius is carrying out construction activities at its 100%-owned Zancudo project, which includes the historic producing Independencia mine, affording the company the opportunity to develop near term production and cash flow starting through local contract mining and long-term growth via continued exploration at the Zancudo deposit, which remains open in all directions.
The Zancudo project consists of three adjoining mining concession contracts and one exploration license covering an area of approximately 1,054 hectares. For concession 5521, which includes the historic Independencia Mine, the Mining Technical Work Plan was approved in December, 2023 by the Secretary of Mines of Antioquia. Denarius is commencing production at Zancudo in the first quarter of 2025. The company also expects to commence operations within the next 12 months at the Aguablanca nickel-copper mine in Spain. Aguablanca is located approximately 88 kilometres northeast of Lomero polymetallic project, which is located on the Spanish side of the Iberian Pyrite belt.