ExGen secures a second silver stream on a South American gold mine, doubling exposure and strengthening future silver-linked cash flow potential.
ExGen Resources has strengthened its exposure to precious metals by entering into a second binding letter of intent (LoI) for the acquisition of an additional silver streaming interest linked to a previously operating gold mine in South America. This latest agreement effectively mirrors an earlier transaction completed by the company and, when combined, doubles ExGen’s overall silver streaming position associated with the same mining asset. The move reflects the company’s broader strategy of building long-term optionality and future cash flow leverage to silver production without taking on the full operational risks of mine ownership.
The newly signed LoI has been executed with an arm’s length private company, referred to as PrivateCo. PrivateCo intends to secure control of the mining property through an option-based arrangement with the current owners, who are a group of private individuals. While the mine is not presently in production, it has a history of gold output, providing a foundation for renewed development and associated silver by-product recovery in the future.
Under the terms of the agreement, ExGen has paid an upfront consideration of $500,000 to obtain a significant portion of the silver produced from the property. Specifically, the company will receive a 33.3% silver stream on the first 333,333 ounces of silver generated once production resumes. After this initial volume has been delivered, ExGen will continue to benefit from a reduced but still meaningful entitlement of 16.7% of all subsequent silver production from the mine.
In exchange for the silver delivered under this second streaming arrangement, ExGen will make ongoing payments to PrivateCo at a price equivalent to 20% of the prevailing spot silver price. The reference price will be determined using quotations from a major metals exchange, to be mutually agreed upon by both parties. This structure allows ExGen to gain exposure to silver price upside while maintaining a relatively low and predictable acquisition cost for the metal.
Commenting on the transaction, Jason Riley, chief executive officer of ExGen Resources, highlighted the strategic importance of securing multiple streams on the same asset. He noted that with two silver streams now in place, the company is laying the groundwork for robust potential future cash flows, positioning itself to benefit from favourable silver market dynamics while creating long-term value for shareholders.
The LoI also sets out minimum delivery obligations designed to provide ExGen with a degree of certainty once production begins. Starting in the second quarter of 2027, PrivateCo will be required to deliver no less than 4,200 ounces of silver to ExGen in each calendar quarter. Should PrivateCo fail to meet this minimum threshold, it must compensate ExGen by paying the equivalent value of the shortfall in gold, thereby ensuring that ExGen’s economic position is protected.
In addition to the streaming terms, ExGen has negotiated a right of first participation in any future streaming or royalty transactions that PrivateCo may pursue in relation to the property. This provision offers ExGen the opportunity to further expand its interests at the mine should additional financing or monetisation structures be introduced.
While the current arrangement is governed by the binding LoI, both parties have indicated their intention to negotiate and execute a definitive silver streaming agreement. This final contract would incorporate the key commercial terms already agreed, along with other customary provisions typically included in comparable streaming transactions within the mining industry.
