Pretivm Resources announced a $540 million construction financing package with the Orion Mine Finance Group and Blackstone Tactical Opportunities.

Pretivm said the financing, which provides for immediate access to $340 million at closing, will fund a substantial portion of the costs to develop an underground mine at Pretivm’s Brucejack Project.

The financing is comprised of a credit facility for $350 million, a $150 million prepayment under a callable gold and silver stream agreement and a private placement of Pretivm common shares for $40 million. The financing is expected to close on or about September 18, 2015.

Credit Agreement:

  • Senior secured loan facility of $350 million;
  • $150 million will be advanced at closing, and the remaining $200 million will be drawn within 18 months;
  • Fixed interest rate of 7.5%;
  • Principal and accrued interest is due at maturity on December 31, 2018, or Pretivm can exercise an option to extend maturity to December 31, 2019 on payment of 2.5% of the principal amount outstanding.

Offtake Agreement:

  • Applies to sales from first 7.067 million ounces of refined gold;
  • Orion and Blackstone will pay Pretivm for refined gold based on prevailing market prices; and
  • Option for Pretivm to repurchase 50% or 75% of the gold offtake on December 31, 2018 for $11 per ounce for remaining gold to be produced; or on December 31, 2019 for $13 per ounce for remaining gold to be produced.