First Majestic Silver entered into an agreement with The Bank of Nova Scotia and Investec Bank for a senior secured credit facility consisting of a $25 million revolving credit line and a $35 million term loan.

The proceeds are being used to settle the company’s existing lead and zinc prepayment facility with Bank of America Merrill Lynch and to replace the $15 million revolving credit line the company assumed when it acquired SilverCrest Mines.

Effective with this transaction, the company eliminated its base metal hedge with a mark to market gain of $5 million. The company is settling the BAML prepayment facility debt with a cash payment of $31.5 million from proceeds of the $35 million term loan. The remaining $3.5 million net of transaction fees is added to the company’s treasury for general and administrative purposes. The SilverCrest Credit Line was due to be repaid no later than June 30, 2016. Under the new facility, the repayment of the credit line has been deferred to February 2019 and an additional $10 million has been added to establish a $25 million revolving credit line for the company.

“The announcement of today’s debt restructuring, along with the decision to lock in our $5 million gain on our BAML lead and zinc hedge and to push out the settlement of the revolving credit line by three years, immediately improves the company’s working capital position and provides significant financial flexibility to continue pursuing our corporate objectives,” stated Keith Neumeyer, president and CEO. “Our strengthened balance sheet and diverse portfolio of producing silver mines provides us with the opportunity to access funds at a low cost of capital.”

First Majestic is a mining company focused on silver production in México.