TSX- and NYSE-listed Great Panther Mining has entered into a $20-million gold doré prepayment agreement with Asahi Refining Canada, a wholly owned subsidiary of Asahi Holdings, as well as a $5-million lead concentrate prepayment agreement with Samsung UK.
The new credit facilities contribute an additional $25-million in working capital funding, providing Great Panther with increased financial strength and flexibility to execute on its objectives of replacing resources, extending mine life, and unlocking the regional potential of the Tucano gold mine, in Brazil.
Great Panther president and CEO Rob Henderson said on Tuesday that the miner’s goal was to grow the company with the objective of safely, sustainably and profitably, producing gold and silver for the benefit of all its stakeholders.
“This year has not been without its challenges; however, we remain committed to generating shared value through our operations and these new funding facilities are a testament to our lenders' support of and belief in this mission," he commented.
Under the doré agreement, Asahi has agreed to advance a $20-million prepayment to Great Panther in consideration for the equivalent value in gold, to be delivered over a 12-month period in installments of equal value starting in April 2022.
The prepaid doré will be sold at a 0.5% discount to the spot price of gold at the time of delivery and will be used to offset repayments of the Asahi Advance.
The Asahi advance will bear interest at a yearly rate of one-month USD Libor plus 4.75% and is secured by a pledge of all equity interests in Great Panther's Brazilian subsidiary, Mina Tucano, which owns the Tucano gold mine.
Great Panther has a full option for early repayment of the Asahi Advance, subject to a 3% penalty applied to the outstanding balance at the time of repayment.
The doré agreement also provides exclusivity on refining and gold sales for 100% of the remaining production of the Tucano gold mine during the term of the agreement.
Meanwhile, under the concentrate agreement, Samsung has agreed to advance a $5-million prepayment to Great Panther's Mexican subsidiary, Minera Mexicana El Rosario (MMR) in consideration for exclusive offtake of the lead concentrate production from the Topia mine, in Mexico, up to a maximum contract quantity of 5 400 dry metric tonnes representing about 21 months of production from the mine.
The concentrate agreement also gives Samsung a right of first offer on an additional 12 months of concentrate.
The Samsung Advance has an 18-month term and will be repaid in equal monthly instalments starting in April 2022.
It will bear interest at a yearly rate of three-month Libor plus 6.5% and will be secured by a pledge of all equity interests in MMR.
MMR has a full option for early repayment of the Advance, subject to a 3% penalty applied to the outstanding balance.
The remaining balance of $3.2-million on the company's existing gold doré agreement with Samsung has been repaid in full and cancelled and the pledge of shares to Samsung of the company's shares in Mina Tucano has been released.
Samsung's right of offer for concentrates produced from the company's Coricancha mine project, in Peru, in certain circumstances remains in effect.