Appian sells royalty, streaming assets to Versamet

Mining advisory firm Appian Capital sold two royalty and streaming assets to Canada’s Versamet Royalties (TSXV: VMET) for up to US$170 million in cash, of which $125 million is paid upfront.

The sale includes a 2.75% net smelter return (NSR) royalty on the Santa Rita polymetallic mine in Brazil and a 90% silver stream on the Rosh Pinah mine in Namibia. Both mines are majority-owned by Appian and have expansion projects on their way to extend production.

Appian founder and CEO Michael Scherb said the company had received strong interest, reflecting “the quality of the underlying assets” as well as its “disciplined approach to portfolio optimization.”

Following the sale, Appian’s portfolio will continue to hold multiple long-life assets across a diverse set of commodities. This includes a gold stream on Asante Gold’s (TSXV: ASE) Bibiani and Chirano mines in Ghana, a lithium royalty on Lithium Ionic’s (TSXV: LTH; US-OTC: LTHCF) Bandeira project in Brazil, a polymetallic royalty on US Strategic Metals’ processing and recycling facility in the U.S., and a potash royalty on Western Resources’ (TSX: WRX) Milestone project in Canada.

Versamet, whose portfolio contains mainly precious metals royalties and streams, will fund the purchase through credit facilities totalling US$180 million from the Bank of Montreal and National Bank of Canada.

Nickel mine in transition

Santa Rita is a large open-pit polymetallic mine situated in Brazil’s Bahia state. Appian acquired its owner Atlantic Nickel in 2018 through a complex bankruptcy process. In the following years, it had looked to sell the Atlantic Nickel assets and came close to a deal with Glencore in 2023, which was subsequently scrapped.

Current operations at Santa Rita involve the processing of open-pit ore through a concentrator with capacity of about 6.5 million tonnes per year to produce nickel sulphide concentrate. The concentrate also contains copper, cobalt, platinum, palladium and gold by-products. Last year’s production included 31.8 million lb. of nickel, 10.1 million lb. of copper and 600,000 lb. of cobalt.

Atlantic Nickel is currently in the process of transitioning the operation to underground mining at Santa Rita, which would extend the mine’s life to more than 20 years while delivering a higher production rate and a lower cost structure.

The Santa Rita NSR sold to Versamet covers both the open-pit and underground deposits, as well as the entirety of the land held by Atlantic Nickel in the area, covering more than 400 sq km.

A portion of the purchase price (US$45 million) is tied to certain expansion milestones at Santa Rita: US$22.5 million will be paid upon the processing of the first 1 million tonnes of underground ore before July 1, 2035; and another US$22.5 million will be paid when Santa Rita achieves a throughput rate of 12,500 tonnes per day from underground ore over a 90-day period before the same date.

Growing silver mine

Rosh Pinah is an operating underground zinc-lead-silver mine located in southwestern Namibia, and has been in operation for over 55 years. In 2024, the mine processed 650,000 tonnes of ore, producing 87 million lb. of zinc, 14 million lb. of lead and 244,000 oz. of silver in concentrates.

Under the silver stream, Versamet would receive refined silver equal to 90% of payable silver from the Rosh Pinah mine. After a total of 3.1 million oz. have been delivered, it will be entitled to receive 45% of payable silver for the remaining life of the mine. Versamet will pay 10% of the spot silver price for each ounce delivered to the stream.

Appian is currently undertaking an expansion at the mine (RP2.0) that aims to double mill throughput to about 1.3 million tonnes per annum. This involves the installation of new processing facilities, including the addition of a paste fill plant and water treatment plant, and a dedicated portal and underground decline.

Construction of the surface facilities is more than 80% complete, with construction completion expected in the third quarter of 2026, the company said. Earlier this week, it secured a $150 million debt facility from Standard Bank to complete the expansion on schedule.

Both Rosh Pinah and Santa Rita have “significant” upcoming growth catalysts, with the RP2.0 expansion expected to be completed next year, and the Santa Rita underground project nearing a construction decision, Versamet CEO Dan O’Flaherty said.

“Our forecasted production is now expected to exceed 10,000 GEOs this year, growing to over 20,000 GEOs in 2026 and organically increasing by approximately 25% to 25,000 GEOs in the medium term,” he said.