Wedoany.com Report-Dec.19, ExGen Resources has entered into a binding letter of intent (LOI) to acquire a silver stream on a past-producing gold mine located in Chile.

According to the binding LoI, PrivateCo must deliver at least 4,200oz of silver to ExGen each calendar quarter.

The arrangement is with an arm's-length private company (PrivateCo). Under the terms, ExGen will receive 33.4% of the silver produced until 333,334 ounces have been delivered, after which the stream will reduce to 16.7% on any further silver output from the property.

As part of the agreement, ExGen has provided $500,000 in consideration for the silver stream. This amount was paid directly to the current property vendors on behalf of PrivateCo, a group of private individuals holding the asset.

PrivateCo is working to secure ownership of the mine through an existing option agreement with these vendors.

ExGen CEO Jason Riley said: "ExGen has been evaluating various potential streaming and royalty deals and we are excited to have signed our first silver stream with this LoI."

The LOI specifies that ExGen will pay PrivateCo a delivery price equivalent to 20% of the prevailing spot silver price for each ounce received, based on quotations from a major exchange agreed upon by both parties.

Commencing in the second quarter of 2027, PrivateCo is required to deliver a minimum of 4,200 ounces of silver to ExGen each calendar quarter.

Should PrivateCo fall short of this quarterly minimum, the shortfall will be compensated by providing ExGen with gold of equivalent market value. This mechanism supports reliable and consistent delivery obligations.

Additionally, ExGen has been granted preferential rights to participate in any future streaming or royalty arrangements that PrivateCo may pursue on the same property.

The parties anticipate executing a definitive streaming agreement that will formalize the terms outlined in the LOI, along with standard provisions typical for such transactions.

This acquisition marks ExGen's initial entry into a silver streaming arrangement, expanding its portfolio in precious metals through a structured, low-risk exposure to future production from the Chilean asset.