Torex Gold Resources finalized a credit agreement with a syndicate of banks which increases the amount of credit available to $250 million from $150 million and extends the maturity of the facilities into 2025 from 2023.
“We are pleased to increase the capacity and extend the maturity of our credit facilities with a syndicate of supportive lenders,” Andrew Snowden, CFO of Torex, said. “The amended credit agreement represents another key de-risking milestone in the development of the Media Luna Project. The amended facilities provided by Bank of Montreal, as joint bookrunner, joint lead arranger and administrative agent, The Bank of Nova Scotia, as joint bookrunner, joint lead arranger and syndication agent, the Canadian Imperial Bank of Canada, ING Capital, National Bank of Canada and Societe Generale, further enhances the company’s financial flexibility. The facilities include similar covenants and security to the prior credit agreement and maintain the optionality for the company to pursue a potential future high yield debt offering, assuming the interest rate and maturity are advantageous to Torex shareholders.
“With $311 million of cash on hand at the end of June, no debt, and strong forecast cash flow from El Limón Guajes, the $250 million available under the latest credit facilities place Torex on solid footing to fund the development of Media Luna, continue to invest in value-generating exploration and maintain a minimum of $100 million of liquidity on the balance sheet.”
The credit agreement consists of a $150 million revolving credit facility and a $100 million term loan credit facility. The $150 million revolving credit facility matures on Dec. 31, 2025 and is subject to quarterly commitment reductions of $12.5 million commencing on March 31, 2024. The $100 million term loan facility can be drawn until Dec. 31, 2023, matures on June 30, 2025 and is subject to four equal quarterly repayment instalments commencing on Sept. 30, 2024. Both the revolving credit facility and term loan facility can be repaid in full anytime without penalty.
These facilities bear an interest rate of term SOFR plus a credit spread adjustment and an applicable margin based on the company’s leverage ratio. The applicable margin applied is 2.50% based on a leverage ratio less than 1.0 times, 2.75% at a ratio less than 2.0 times, 3.00% at a ratio less than 2.5 times, and 3.50% at a ratio equal to or greater than 2.5 times. Any unused portion of the facilities will be subject to a customary commitment fee. The credit spread adjustment will range from 0.10% to 0.25%.
The revolving credit facility and term loan facility include standard and customary financing terms and conditions, including those related to security, fees, representations, warranties, covenants and conditions.