Silver Crown Royalties Inc. has entered into a definitive silver royalty agreement with Soma Gold Corp. to acquire a royalty on 90% of the silver produced from Soma's El Bagre Gold Mining Complex in Antioquia, Colombia, for US$10 million in cash. The transaction, announced via NEWMEDIAWIRE, marks Silver Crown's entry into a third producing jurisdiction and increases its royalty count to nine silver royalties across seven projects.
The El Bagre complex has been in continuous production for over a decade and currently processes ore from the Cordero underground mine through an on-site gold processing plant. The royalty structure includes minimum deliveries of 305,500 ounces of silver over approximately five and a half years, paid quarterly in cash at the LBMA silver price less a fixed 3% deduction. After the delivery period, the royalty converts to a 7.5% net smelter return royalty on silver for the life of the operation. This minimum delivery schedule provides shareholders with visibility on over 300,000 ounces of silver over the next five years.
The acquisition is expected to be immediately accretive to Silver Crown on a per share basis, on both attributable silver ounces and cash flow. The company projects that the royalty will increase its attributable silver ounce revenue by approximately 29% in 2027 and 57% in 2028. The purchase price represents less than 6% of Silver Crown's current market capitalization, highlighting efficient capital deployment.
Peter Bures, Chairman and CEO of Silver Crown, commented, "El Bagre is exactly the kind of asset our strategy is built around: a producing mine with a long operating history, an experienced operator, and silver that is a by-product to the operator but meaningful to us." He added that the transaction is a win-win for both companies' shareholders and that Silver Crown continues to seek additional opportunities to grow its silver ounce revenue.
The purchase price is payable in two tranches. The first tranche of US$3 million (less a US$75,000 work fee previously paid) will be paid at closing, expected on or before November 30, 2026, at which time the royalty will be granted at 30% of its full terms. The second tranche of US$7 million will be paid following the discharge of security held by Soma's existing gold financier and the registration of first-ranking security in favour of Silver Crown, at which time the royalty will increase to 100% of its full terms. Soma has agreed to use best efforts to complete the discharge by December 31, 2026. If not completed by that date, Silver Crown has the right to require Soma to repurchase the royalty for US$3 million plus interest and the royalty payable for the preceding quarter.
Geoff Hampson, Chairman and CEO of Soma Gold, stated, "We are pleased to have successfully negotiated this transaction with SCRi, a valued capital provider. We appreciate their constructive approach and confidence in Soma Gold's strategy and assets."
The El Bagre complex is located approximately 200 kilometres northeast of Medellín and is 100% owned and operated by Soma through its Colombian subsidiary, Operadora Minera S.A.S. The transaction is subject to customary closing conditions, including the delivery of Colombian law security documents and legal opinions and the acceptance of Cboe Canada. The original release can be viewed at www.newmediawire.com.
