TORONTO (miningweekly.com) – Canadian base metals producer Capstone Mining has amended its existing $400-million senior secured corporate revolving credit facility (RCF) to $500-million with a syndicate of lenders.
This facility allowed the company to repay and cancel the existing RCF.
The amended RCF comprised a committed $440-million, as well as a $60-million extension. It had a four-year term maturing in January 2019, with extension rights on mutual consent, bearing a US-dollar London Interbank Offered Rate plus 3% (adjustable in certain circumstances) and a standby fee of 0.675%, payable on the undrawn balance of the facility.
Capstone would be able to exercise the $60-million accordion once further credit had been committed from existing and/or new lenders.
"This low-cost credit facility, combined with our existing cash balance and cash flow from operations, offers Capstone significant financial flexibility to meet our operating requirements and to address potential market or operational disruptions, including periods of low copper prices," Capstone president and CEO Darren Pylot said.
"We expect to draw about $265-million once the standard conditions precedent are met. This will replace our current borrowings and will eliminate our requirement for amortisation, leaving us with about $235-million of additional credit capacity. Simultaneously, we maintain the option to access the high-yield bond market when conditions improve if that is still appropriate for Capstone at the time,” he explained.
Analysts expected Capstone to this year invest in shovels and trucks for the Pinto Valley mine and as the company prepared to mine the Minto North deposit, in the Yukon Territory of Canada.
Scotiabank – the colead arranger, joint bookrunner and administrative agent – and Canadian Imperial Bank of Commerce – the colead arranger, joint bookrunner and syndication agent – provided the RCF. Other syndicate lenders included Citibank, Wells Fargo, Export Development Canada, Bank of Montreal, Mizuho Bank and ING Capital.