Americas Gold and Silver, a precious metals producer in North America, has closed a $100m (C$136.54m) senior secured debt facility with SAF Group.
This financing is allocated for growth and development capital spending at the company’s Galena Complex in Idaho, US.
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The term loan facility is structured in three tranches comprising an initial $50m term loan provided at closing, with two additional tranches of $25m each, contingent upon meeting certain conditions precedent.
The first tranche is subject to a minimum secured overnight financing rate (SOFR) plus 6% per annum, with a four-year maturity period. Principal repayments are set to commence one-year post-closing, with quarterly payments thereafter.
The additional tranches, each worth $25m, will become available to Americas Gold upon the fulfilment of specific conditions.
The interest rates for these subsequent tranches will mirror the initial loan’s terms, with the second additional tranche having a slightly lower interest rate of SOFR plus 4% per annum after funding.
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By GlobalDataAmericas Gold and Silver chairman and CEO Paul Andre Huet said: “The Term Loan Facility ensures we have the balance sheet strength to implement our aggressive major growth strategy at the Galena Complex.
“The $100m debt financing is critical to our plans to increase development rates and tonnage mined and reduce unit costs at Galena. The Term Loan Facility has been strategically structured into three tranches to match the pace of our capital plans for a sustained period of robust production growth.”
SAF Group holds senior security over all assets and undertakings of Americas Gold and Silver, except for those related to the Cosalá operations in Sinaloa, Mexico, and the Relief Canyon Project in Nevada, US.
These are secured in priority by Trafigura and Sandstorm, respectively, for the duration of their financing arrangements.
The Term Loan Facility also includes an agreed original issue discount and other fees typical for a facility of this magnitude.
In March last year, Americas Gold announced a modification to its agreement with Eight Capital, leading to an increased private placement offering to raise up to C$7.5m.
