Canadian firm Northern Graphite is in a “comfortable position” to safely finance the restart of the Lac-des-Iles (LDI) mine, in Quebec, CEO Hugues Jacquemin said on Wednesday.
The company improved its cash position with $1-million in secured debt and $2-million in royalty financing, provided by funds managed by Sprott Resource Streaming and Royalty.
The financing was completed through amendments to Northern Graphite’s April 2022 senior secured credit agreement and royalty agreement with Sprott in connection with the financing of the acquisition of LDI and Okanjande graphite mine, in Namibia.
Under the amendments to the royalty agreement, Northern Graphite has sold an additional royalty on gross sales revenue (GRR) from LDI to Sprott for $2-million, in addition to the 9% GRR from LDI previously sold to Sprott for $4-million in April 2022. The additional GRR is for 4% of graphite concentrate sales revenue from LDI up until it has been paid on sales of 45 000 t of graphite concentrate, after which it will be reduced to 0.25% for the remaining life-of-mine at LDI.
Northern Graphite on November 1 resumed processing ore at LDI, amid rising market demand and to restock inventories for certain products.
During the third quarter, total sales were 2 587 t, representing a 25% increase over the 2 016 t sold in the second quarter.