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 is expected to be immediately accretive to the company on a per-share basis.
The El Bagre complex, which includes the Cordero underground mine and an on-site gold processing plant, has been in continuous production for over a decade. Under the royalty structure, Silver Crown will receive the greater of 90% of payable silver produced and scheduled minimum deliveries totaling 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.
The acquisition is expected to increase Silver Crown's attributable silver ounce revenue by approximately 29% in 2027 and 57% in 2028. It also reduces the company's concentration in Peru and increases its royalty count to nine silver royalties across seven projects. The purchase price represents less than 6% of Silver Crown's current market capitalization.
Peter Bures, Chairman and CEO of Silver Crown, said, "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 minimum delivery schedule gives shareholders visibility on more than 300,000 ounces of silver over the next five years and that the transaction is immediately accretive on every metric the company tracks.
Geoff Hampson, Chairman and CEO of Soma Gold, commented, "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 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 favor 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 will have the right to require Soma to repurchase the royalty for US$3 million plus interest and the royalty payable for the preceding quarter.
Closing of the first tranche is subject to customary conditions, including delivery of Colombian law security documents and legal opinions and acceptance of Cboe Canada. The full details of the agreement are available in the original release at www.newmediawire.com.
For Silver Crown, the deal provides immediate cash flow from a producing asset and advances its strategy of generating free cash flow through silver royalties. The company's business model offers investors exposure to precious metals as a hedge against currency devaluation while mitigating production-related cost inflation. For Soma Gold, the transaction provides capital and validates its strategy and assets in Colombia. The royalty also includes audit, inspection, and technical advisory rights in favor of Silver Crown, and restrictions on Soma's ability to dispose of or encumber the El Bagre mining titles and plant. The scientific and technical information relating to El Bagre has been reviewed and approved by Mitchell Lavery, P.Geo., a Qualified Person as defined in National Instrument 43-101.
