Daily News: March 11, 2019

Sierra Metals Closes $100MM Facility with Banco de Credito del Peru

Sierra Metals entered into a new six-year senior secured corporate credit facility with Banco de Credito del Peru (BCP) that will provide funding of up to $100 million.

The facility will provide the Sierra with additional liquidity, along with the financial flexibility to fund future capital projects in Mexico as well as corporate working capital requirements. The company will also use the proceeds of the new facility to repay existing debt balances in the near term.

The most significant terms of the facility are as follows:

  • A 6-year term with a maturity date of March 2025
  • A principal repayment grace period of 2 years
  • A principal repayment period of 4 years
  • An interest rate of 3.15% plus LIBOR 3M

The facility is subject to customary covenants, including consolidated net leverage and interest coverage ratios and customary events of default.

Igor Gonzales, President and CEO of Sierra Metals, commented, “The new corporate facility combined with our strong cash flow provides greater financial flexibility to our capital structure and will enhance our ability to implement growth initiatives in line with the company’s strategic plan. The main use of this facility is to repay the existing BCP credit facility at our Diabras Peru subsidiary, which was established at the time of the Sociedad Minera Corona acquisition in 2011. The new structure provides a more efficient capital structure that would allow us to better meet the growth plans for Sierra Metals in the future.”

Based in Canada, Sierra Metals is a growing polymetallic mining company with production in the Yauricocha Mine in Peru and the Bolivar and Cusi Mines in Mexico.