Wallbridge pays down additional debt by $1m
JOHANNESBURG (miningweekly.com) – TSX-listed exploration and mining company Wallbridge Mining has successfully negotiated an early prepayment of $1-million on its $2-million debt owing to Callinan Royalties. This was pursuant to a line of credit (LoC) entered into with Callinan on December 12, 2012.
The interest payable on the company’s debt was also renegotiated, resulting in interest now being calculated at the rate of 10% a year instead of the greater of 10% a year, or a 1.5% net smelter return (NSR) royalty, prorated on the funds drawn.
"We continue to review opportunities whereby we can strengthen our balance sheet as well as reduce our costs", stated Wallbridge president and CEO Marz Kord.
He explained that with the company’s Broken Hammer project, in Sudbury, Ontario, in full operation benefiting from additional ore found in the top few benches, the royalties payable pursuant to the LoC would have been in excess of the 10% interest and with this early prepayment Wallbridge could realise a reduced financing cost of about $100 000.
Meanwhile, the remaining $1-million principal balance, together with interest accrued thereon, needed to be prepaid immediately after Wallbridge sold its Duluth Metals shares to Antofagasta Investment Company, an affiliate thereof or a third party in connection with the proposed acquisition of Duluth.
On November 3, Wallbridge announced that it had entered into a support agreement with regard to Antofagasta’s proposed acquisition of Duluth whereby Wallbridge would vote all of its Duluth shares in favour of the acquisition.
If the second prepayment was not made to Callinan owing to the proposed Duluth acquisition not closing prior to the end of the term of the LoC, the interest on the LoC obligations would revert to its original prorated calculation. In such case, Wallbridge would still net an interest saving based on the prorated NSR calculation.
The term of the LoC was three years or until completion of the extraction and processing of mineral produced from the Broken Hammer project, whichever occurred first.
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