Gatos Silver extended the maturity date and re-established a credit limit of $50 million in an amended and restated revolving credit facility with BMO. The revolver includes an accordion feature providing up to an additional $25 million of credit.
The revolver is available for general corporate purposes, working capital, acquisitions and investments. In view of its cash position, Gatos Silver made a $4 million repayment prior to closing. The current balance outstanding on the revolver is $9 million with $41 million available for advance.
“The revised facility provides Gatos Silver with further financial flexibility as we continue to execute on our exploration and growth strategy to further maximize shareholder value, both within and beyond the Los Gatos district,” Dale Andres, CEO of Gatos Silver, said. “It represents a clear vote of confidence from our lender in the quality of Gatos Silver’s assets, its updated mineral reserves and mineral resources and its new management team.”
“We are pleased with the re-instatement and extension of the revolver with BMO and would like to thank our lender for its continued support,” André van Niekerk, CFO of Gatos Silver, said. “Our net cash position continued to improve quarter over quarter during 2022, and with the amendment of the revolver, the company is in a very strong financial position with sufficient liquidity to pursue its value creation catalysts.”
Key Terms of the Revolver
- $50 million revolving line of credit with an accordion feature that allows for an increase in the total line of credit of up to $75 million, subject to certain conditions.
- The maturity date was extended from July 31, 2024, to Dec. 31, 2025.
- A change in the benchmark interest rate from LIBOR to the Secured Overnight Financing Rate.
- Loans under the revolver bear interest at a rate equal to either term SOFR plus a margin ranging from 3% to 4% or a U.S. base rate plus a margin ranging from 2% to 3% as selected by Gatos Silver.
- There were no other material changes to the terms of the original revolver dated July 12, 2021. Availability under the revolver was previously reduced to $30 million on March 8, 2022.
Gatos Silver is a silver dominant exploration, development and production company that discovered a new silver and zinc-rich mineral district in southern Chihuahua in Mexico.