Canadian precious metals miner Premier Gold Mines has signed a definitive credit agreement with Investec Bank, as administrative agent for the lenders for a $50-million secured revolving term credit facility, the company announced on Friday.

Premier also announced financing arrangements with OMF Fund II SO and Orion Mine Finance Fund II, collectively, Orion, for aggregate gross proceeds of about $18.2-million.

“With two new mining operations currently under construction, and an underground programme planned for Cove during the second half of this year, this facility complements the company’s strong balance sheet and positions Premier to execute its aggressive growth plan,” commented Premier CFO Steve Filipovic.

INVESTEC CREDIT FACILITY

The Investec credit facility matures in four years and will be used for working capital requirements and general corporate purposes.

Amounts borrowed under the facility will bear interest at a variable rate yearly equal to the London interbank offered rate plus an applicable rate as determined by the company’s debt to adjusted earnings before interest, tax, depreciation and amortisation ratio for the immediately preceding quarter ranging from 3.00% to 4.30%.

The Investec credit facility is secured by the assets relating to the South Arturo mine in Nevada, US, and the Mercedes mine in Sonora, Mexico.

Premier issued Investec with 216 446 common shares  in the capital and 1 500 000 common share purchase warrants (Investec warrants), with each Investec warrant exercisable into one common share until January 24, 2022 at an exercise price of C$2.17.

The common shares and Investec warrants are subject to a four-month plus one day hold period pursuant to applicable Canadian securities laws.

Funding under the Investec facility is subject to customary conditions precedent.

ORION FINANCING ARRANGEMENTS

Premier and Orion Mine Finance Fund II have entered into a subscription agreement pursuant to which Orion has agreed to subscribe for seven-million common shares (the private placement) for aggregate gross proceeds of C$11 056 500 or about C$1.58 a share.

Premier will also issue 2 000 000 common share purchase warrants to Orion. Each warrant will be exercisable into one common share for a period of three years from the date of issuance and will have an exercise price equal to C$2.05.

The closing of the Orion financing arrangements is subject to customary closing conditions, and a number of other conditions.

The proceeds of the private placement and the additional deposit payable pursuant to the A&R silver stream agreement will be used for the development, construction and working capital requirements for the South Arturo mine.