VANCOUVER, BC, Nov. 2, 2026 /CNW/ -- Soma Gold Corp. (TSXV: SOMA) (WKN: A2P4DU) (OTC: SMAGF) (the "Company" or "Soma") is pleased to announce that it has entered into a definitive royalty agreement with Silver Crown Royalties Inc. (the "Purchaser" or "SCRi") pursuant to which SCRi will acquire a silver royalty over Soma's Cordero mine and the past-producing La Ye and Los Mangos mines, associated with concessions L5682005 and R57011C4 in Antioquia, Colombia (the "Project") (the "Transaction").
Under the terms of the Transaction, Soma will receive aggregate cash proceeds of US$10 million, subject to the terms and conditions of the definitive agreement, in exchange for granting the Purchaser a royalty exclusively on payable silver mined from the Project, subject to allowable deductions and settled in cash equivalent. The first tranche of US$3 million is to be paid on closing ("Closing"), which is expected to occur on or about November 30, 2026, with the second tranche of US$7 million (the "Second Tranche") payable within ten Business Days following the discharge of the Company's existing financing security over the Project and the registration of first-ranking security, subject to applicable pari passu rights and with SCRi discharging the security upon Delivery Threshold (defined below), in favour of the Purchaser. The Company expects to complete the discharge and SCRi's registration by December 31, 2026.
The Transaction provides Soma with non-dilutive capital through the monetization of a by-product while maintaining a defined scope for the royalty and preserving the Company's broader portfolio of mineral properties and processing infrastructure. The proceeds are intended to support Soma's operational priorities, continued development of its Colombian production platform and pursuit of additional growth opportunities.
Transaction Highlights
- Non-Dilutive Capital: Provides for aggregate cash consideration of US$10 million.
- Monetization of a By-Product: Unlocks value from silver, a by-product of Soma's gold production, which represents approximately 1% of the Company's ongoing revenue profile, providing an alternative source of capital while maintaining the strategic focus on Soma's core gold business.
- Ring-Fenced Royalty Exposure: Limits SCRi's royalty interest to payable silver mined from the Project. The royalty does not extend to other mineral properties or processing facilities owned by Soma or its affiliates, or to third-party ore processed at those facilities, subject to the terms of the definitive agreement.
- Defined Delivery Threshold and Long-Term Structure: A defined stepdown mechanism and time limitation, together with a residual royalty on payable silver mined from the Project reduces the long-term economic impact of the royalty over the remaining life of the Project.
- Preservation of Broader Growth Potential: Retains Soma's ability to advance other mineral properties, expand processing activities and pursue opportunities across its Colombian portfolio outside the defined royalty area.
- Flexible Capital Funding Strategy: Demonstrates Soma's ability to evaluate alternative financing structures that monetize defined commodity interests to support growth while preserving flexibility across the broader business.
"This transaction allows us to unlock value from silver, a by-product for Soma, without diluting our shareholders," said Julian Storz, Vice President, Business Development of Soma. "The US$10 million in proceeds is expected to provide us with meaningful capital to advance our operational priorities and pursue growth, while the royalty remains limited to a defined area and preserves the broader value and growth potential of our Colombian portfolio, including our other mineral properties and processing facilities."
"Just as importantly, it highlights an alternative financing strategy for how Soma can fund its growth in the future. We will continue to look for creative, non-dilutive ways to finance the development and expansion of our production platform in Colombia."
Royalty Terms
Until payment of the Second Tranche, the Purchaser will be entitled to 30% of the royalty otherwise payable under the Transaction, with the full royalty entitlement becoming effective upon payment of the Second Tranche. If the Company's existing financing security over the Project has not been discharged by December 31, 2026, the Purchaser may require the Company to repurchase the royalty in accordance with the terms of the definitive agreement.
Subject to the foregoing, until SCRi has received the cash equivalent of an aggregate of 305,500 ounces of payable silver, subject to applicable deductions (the "Delivery Threshold"), Soma will be required to make cash payments equivalent to, for each calendar quarter, the greater of:
- 90% of payable silver produced from the Project during the applicable quarter; and
- the applicable minimum quarterly delivery requirement.
The minimum delivery schedule is as follows:
- Q4 2026: 5,500 ounces;
- 2027: 30,000 ounces, being 7,500 ounces per quarter;
- 2028: 60,000 ounces, being 15,000 ounces per quarter;
- 2029: 60,000 ounces, being 15,000 ounces per quarter;
- 2030: 60,000 ounces, being 15,000 ounces per quarter;
- 2031: 60,000 ounces, being 15,000 ounces per quarter;
- Q1 2032: 15,000 ounces; and
- Q2 2032: 15,000 ounces.
The 2026 minimum delivery is conditional on Closing occurring on or before November 30, 2026.
Deliveries in excess of the applicable minimum requirements will count toward satisfaction of the Delivery Threshold. If the Delivery Threshold is satisfied before the end of the scheduled delivery period, the remaining minimum delivery obligations will automatically terminate.
Following satisfaction of the Delivery Threshold, the royalty will continue for the life of the Project as a 7.5% NSR royalty on all payable silver mined from the Project.
For all purposes of the royalty, the cash equivalent value of payable silver will be determined by reference to the LBMA Silver Price, less allowable deductions, as further specified in the definitive agreement.
Strategic Rationale
Geoff Hampson, Soma's CEO states, "This Transaction reflects Soma's strategy of unlocking value from its existing asset base through alternative, non-dilutive financing structures while preserving capital allocation flexibility across its broader portfolio. By monetizing a defined by-product revenue stream, Soma accesses meaningful growth capital to fund the development of new mines and other sources of mill feed, without issuing dilutive equity. Limiting the royalty to payable silver mined from the Project, the Transaction also defines the scope while preserving the Company's ability to develop and operate other mineral properties and processing activities without extending the royalty to unrelated production. The Transaction represents more than a source of growth capital: it demonstrates an approach to financing growth that seeks to balance immediate funding requirements with the preservation of long-term strategic flexibility across Soma's broader portfolio."
In addition, Peter Bures, SCRi's Chairman and CEO, said "We are excited to pursue this growth opportunity with Soma Gold. We believe this is a win-win transaction for both parties' shareholders. We look forward to executing and growing together with Soma Gold."
Closing and Definitive Documentation
The Transaction is subject to customary closing conditions. The definitive agreement will govern further details regarding the royalty, including quarterly delivery mechanics, valuation methodology, and allowable deductions. A work fee of US$75,000 will be payable by the Company to the Purchaser at Closing.
Subject to receipt of the required approvals and satisfaction or waiver, where permitted, of the Closing conditions, the Transaction is expected to close on or about November 30, 2026. The Second Tranche will be payable within ten Business Days following the discharge of the Company's existing financing security over the Project and the registration of first-ranking security in favour of the Purchaser. The Company expects to complete such discharge and registration by December 31, 2026.
ABOUT SOMA GOLD
Soma Gold Corp. (TSXV: SOMA) is a mining company focused on gold production and exploration. The Company owns two adjacent mining properties in Antioquia, Colombia with a combined milling capacity of 675 tpd. (permitted for 1,400 tpd). The El Bagre Mill is currently operating and producing. Internally generated funds are being used to finance a regional exploration program.
With a solid commitment to sustainability and community engagement, Soma Gold Corp. is dedicated to achieving excellence in all aspects of its operations.
The Company also owns an exploration property near Tucuma, Para State, Brazil that is currently under option to Ero Copper Corp.
On behalf of the Board of Directors
"Geoff Hampson"
Chief Executive Officer and Chairman
Cautionary Statements and Forward-Looking Information
This news release contains certain statements and information that constitute "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian securities laws (collectively, "forward-looking information"). Forward-looking information is generally identified by the use of words such as "expects", "intends", "anticipates", "believes", "plans", "estimates", "may", "will", "would", "could", "should", "potential" and similar expressions, or statements that certain events or conditions may or will occur.
Forward-looking information contained in this news release includes, without limitation, statements relating to: (i) the proposed royalty transaction, including its terms, structure, anticipated timing and completion; (ii) the anticipated receipt, application and benefits of the transaction proceeds; (iii) the satisfaction of applicable closing conditions and receipt of any required regulatory, corporate or third-party approvals and consents; (iv) the Company's anticipated production, operational performance, development activities and ability to satisfy its obligations under the royalty arrangements, including future metal deliveries or payments; (v) the expected financial and strategic benefits of the transaction, including its anticipated impact on the Company's liquidity, capital resources and funding requirements; and (vi) the Company's future business plans, operating objectives, financial performance, growth opportunities and ability to execute its stated strategy. Forward-looking information is based on management's current expectations, estimates, projections, assumptions and beliefs as of the date of this news release. Material assumptions underlying such information include, without limitation, that the transaction will be completed substantially on the terms described herein; all necessary approvals, consents and conditions will be obtained or satisfied within anticipated timeframes; the Company will have sufficient financial and operational resources to satisfy its obligations; production levels, operating costs, commodity prices and other relevant economic factors will remain within anticipated ranges; and no material adverse changes will occur in the Company's operations, financial condition, applicable regulatory environment or general market conditions.
Forward-looking information is inherently subject to known and unknown risks, uncertainties and other factors, many of which are beyond the Company's control, that could cause actual results, performance, achievements or developments to differ materially from those expressed or implied by such information. These risks and uncertainties include, without limitation, the possibility that the transaction may be delayed, amended or not completed; the inability to satisfy applicable closing conditions or obtain required approvals or consents; risks associated with the Company's ability to meet its obligations under the royalty arrangements, including production and delivery requirements; fluctuations in commodity prices, production volumes, operating costs and foreign exchange rates; operational, technical, geological, environmental and permitting risks; changes in applicable laws, regulations or government policies; the availability of financing and working capital; unexpected costs, liabilities or delays; and adverse changes in general economic, financial market or industry conditions. Readers are cautioned that the foregoing lists of forward-looking information, material assumptions and risk factors are not exhaustive. Additional risks and uncertainties are described in the Company's continuous disclosure documents filed with applicable Canadian securities regulators, including its most recent annual and interim financial statements, management's discussion and analysis and other filings available under the Company's issuer profile on SEDAR+ at www.sedarplus.ca. Readers are encouraged to review these documents for a more complete discussion of the risks and uncertainties affecting the Company's business, operations and financial condition.
Although the Company believes that the assumptions and expectations reflected in the forward-looking information are reasonable as of the date hereof, there can be no assurance that such assumptions or expectations will prove to be correct. Actual results and future events may differ materially from those anticipated. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information contained in this news release is expressly qualified in its entirety by these cautionary statements. Except as required by applicable securities laws, the Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Soma Gold Corp.
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