Denarius Metals Corp. (CBOE: DMET | OTCQX: DNRSF) has agreed to commercial terms with Trafigura Pte. Ltd., a leading global commodities group, for the sale at market prices of 100% of the high-grade gold-silver concentrates to be produced at its Zancudo Project in Colombia over the next eight years.
Serafino Iacono, executive chairman and CEO of Denarius Metals, commented, “We remain on track with our timetable to bring our Zancudo Project into operation this year. The recently completed competitive international tender processes we ran seeking an offtake contract and the sale of a royalty were both a testament to the viability of our Zancudo Project. With the additional US$15M of cash available to us from these two financings, we have strengthened our liquidity as we complete construction and execute a 10,000m infill drilling program at Zancudo this year.”
The company is also arranging a secured prepayment financing of up to US$10M with Trafigura that will be funded as the company reaches prescribed milestones during the completion of its construction activities at the Zancudo Project in 2024. The prepayment financing will be repaid from production during the 26 months following start-up of the processing plant and is subject to finalization of definitive documents and regulatory approvals, as applicable.
Additionally, Denarius has received US$5M in cash from the recent sale of a 3% net smelter return royalty on future production from its Zancudo Project to a syndicate of third-party private investors. This NSR sale transaction followed an extensive process with several interested third parties with respect to the sale of a royalty or stream on the Zancudo Project. Red Cloud Securities Inc. acted as financial advisor to the company on this transaction.
The 2024 infill drilling programme, which is getting underway this month, is aimed at upgrading the inferred mineral resources to the indicated category and to guide the mine development in the northern and southern areas of the Zancudo deposit. With the recent robust uptrend in gold and silver prices and the potential positive impact on long-term price outlooks for these metals, we also see a potential opportunity to increase mineral resources by adjusting our cut-off grades accordingly. As we get closer each month to the start of production at Zancudo, we are very pleased to have Trafigura become a long-term commercial partner.” Added Serafino.
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