Trevali Mining entered into a second amended and restated credit agreement with a syndicate of lenders for an up to $150 million first lien secured revolving credit facility.
The Bank of Nova Scotia is acting as administrative agent, joint bookrunner and co-lead arranger and HSBC Bank Canada is acting as joint bookrunner and co-lead arranger on the facility. The lending syndicate also includes Société Générale, Bank of Montreal, TD Bank, National Bank of Canada and ING Capital.
In addition, Trevali Mining entered into an up to $20 million second lien secured facility agreement with Glencore Canada Corporation, an affiliate of the company’s largest shareholder, Glencore, which holds approximately 26.3% of the issued and outstanding common shares of Trevali Mining.
In combination, the two facilities provide additional liquidity to Trevali in the amount of up to $45 million, consisting of the following:
- The minimum liquidity requirement under the amended revolving credit facility has been eliminated, making available up to an additional $15 million.
- The availability under the amended revolving credit facility has been increased to $135 million, making available up to an additional $10 million.
- A second lien secured facility agreement with Glencore, which is based on 2020 deliveries of concentrate, making available up to an additional $20 million.
“We are pleased to announce that Trevali has secured additional liquidity of up to $45 million at a competitive interest rate from our long-term and supportive lending group and Glencore, our largest shareholder and partner,” Ricus Grimbeek, president and CEO of Trevali Mining, said. “With these facilities, and a covenant waiver until the end of the year in place, our immediate liquidity concerns are behind us. We can now focus our efforts on our other two main priorities: safely delivering on the T90 program to sustainably reduce our cost structure and permanently de-levering the balance sheet.”
The amended revolving credit facility increases the available credit under the revolving credit facility from $125 million to $130 million and can be further increased to $135 million following drawdowns under the Glencore facility in the aggregate amount of $10 million. The available credit under the amended revolving credit facility can be increased to a maximum amount of $150 million with lender consent.
The amended revolving credit facility bears interest at a rate of LIBOR plus 5.5%. The term of the amended revolving credit facility has not changed and matures on Sept. 18, 2022. The amended revolving credit facility revises the financial covenants, removes the minimum liquidity covenant and waives compliance with the financial covenants until Dec. 31, 2020. Trevali will continue to use the proceeds of the amended revolving credit facility for working capital and general corporate purposes.
The new Glencore facility provides for up to $20 million of additional availability, bears interest at a rate of LIBOR plus 5.5% and matures on Sept. 18, 2022. Under the terms of the agreement, Glencore will advance to Trevali amounts equal to the volume of dry metric tonnes of zinc concentrate delivered to Glencore International, an affiliate of Glencore, in a given month multiplied by the difference between the annual benchmark treatment charge (TC) and the average monthly spot TC. Advances under the Glencore loan will be applicable to deliveries of zinc concentrate between June 2020 and December 2020.
The Glencore facility contains substantially the same representations, warranties, covenants, events of default and financial covenants as the amended revolving credit facility. Trevali will use the proceeds of the Glencore facility for working capital and general corporate purposes. The Glencore facility will be secured by the same security as the amended revolving credit facility, on a second-lien basis. The Glencore facility shall not be repaid until the amended revolving credit facility has been repaid in full.
Trevali Mining is a base-metals mining company headquartered in Vancouver.