Discovery Mining amended the company’s senior secured revolving credit facility, increasing the total commitments, extending the maturity, improving pricing and enhancing overall financial flexibility. All amounts are in U.S. dollars unless otherwise indicated.
Under the amended terms, the credit facility has been increased to $400 million from $250 million, with the maturity date being extended to July 30, 2030 from Sept. 15, 2028. The $100 million accordion feature remains unchanged. Improved pricing for the amended credit facility includes an applicable interest rate set at the Secured Overnight Financing Rate (term SOFR) plus a credit spread adjustment of 0.10% per annum and an applicable margin ranging from 1.875% to 3.00% per annum, based on the company’s total net leverage ratio. The amended facility provides increased financial flexibility, with the maximum total net leverage ratio covenant being increased and the minimum liquidity covenant being removed.
“The amended credit facility further builds our financial capacity and flexibility with improved pricing,” Tony Makuch, president, chairman and CEO of Discovery, said. “The additional financial strength we are gaining will benefit us significantly as we move forward with our extensive growth plans, including more than doubling gold production at our Porcupine assets, to over half a million ounces per year. In addition, with the recent acquisition of the Kidd operations in Timmins, we will be investing to grow and expand the Kidd Metallurgical Site to enable the processing of multiple metals, including gold, and to evaluate a potential longer-term future for the Kidd Creek Mine. We appreciate the support of the lenders participating in the syndicate and look forward to working with them as we grow and build value for our stakeholders.”
The transaction was supported by a syndicate of lenders with the Bank of Montreal (BMO) acting as administrative agent, BMO Capital Markets and National Bank of Canada Capital Markets (NBCCM) acting as joint bookrunners, BMO Capital Markets, NBCCM and Canadian Imperial Bank of Commerce (CIBC) acting as co-lead arrangers, NBCCM and CIBC acting as co-syndication agents, and BMO, National Bank of Canada, CIBC, Royal Bank of Canada, The Bank of Nova Scotia and Citibank (Canadian branch) acting as lenders.
Standby fees for the undrawn portion of the credit facility have been reduced, ranging from 0.422% to 0.675% per annum, compared to 0.563% to 0.788% per annum under the previous terms. The amended credit facility remains secured by certain of the company’s assets, supported by guarantees and a pledge of shares from certain material subsidiaries.
