Torex Gold Fully Repays Debt Facility
March 31 2021 - 6:00AM
Torex Gold Resources Inc. (the “Company” or “Torex”) (TSX: TXG) is
pleased to announce that the Company has repaid early the remaining
$40 million of debt in relation to the 2019 Debt Facility and is
now debt free other than approximately $5 million of finance
leases.
In addition, the Company’s wholly-owned
subsidiary Minera Media Luna, S.A. de C.V. (“MML”) has signed a
Third Amended and Restated Credit Agreement with the same syndicate
of lenders comprised of the Bank of Montreal, BNP Paribas, ING
Bank, The Bank of Nova Scotia, and Societe Generale (the “Banks”)
in connection with a two-year senior secured $150 million revolving
debt facility (“2021 Revolving Facility”).
The Company may use the 2021 Revolving Facility
for general corporate and working capital purposes, including
certain development expenditures and acquisitions, and can be used
for letters of credit or funding of capital expenditures. The
amended facility also allows Torex to make distributions to its
shareholders in the aggregate amount of up to C$100 million, in all
cases subject to the conditions of the 2021 Revolving Facility.
Jody Kuzenko, President & CEO of Torex,
stated:
“With no remaining long-term debt, Torex has
never been in a stronger financial position. The markedly enhanced
terms our partner Banks have granted through this latest
refinancing agreement reflects the strength of our balance sheet
and underlying cash flow potential of our El Limón Guajes complex
(“ELG”). Importantly, the amended facility allows for greater
financial flexibility as we lay the foundation for our future in
Morelos and beyond.”
Andrew Snowden, Chief Financial Officer of
Torex, stated:
“The intent of the refinancing was to loosen the
restrictions and covenants in place from our initial project
financing when our operations were less mature and advanced to
covenants more inline with a corporate level facility. With the
Company’s robust cash balance and the ongoing support of the
banking syndicate the Company now has significant financial
flexibility to develop Media Luna and other future projects, a
reduced cost of debt, and can potentially return excess capital to
shareholders.”
The 2021 Revolving Facility continues to permit
spending to facilitate the development of Media Luna, advance the
Muckahi Mining System, and other potential growth opportunities,
with the spending limit under the previous agreement removed.
The development expenditures are subject to the
conditions of the 2021 Revolving Facility, including compliance
with (i) financial covenants related to maintaining a net leverage
ratio of 3x, an interest coverage ratio of 3x and minimum liquidity
of $50 million; and (ii) certain thresholds with respect to the
quantum of development expenditures and the amount spent on the
Muckahi Mining System.
The 2021 Revolving Facility has an interest rate
of LIBOR (subject to a zero floor) plus an applicable margin based
on the net leverage ratio on any loan or letter of credit
outstanding (Table 1). It includes standard and customary finance
terms and conditions with respect to fees, representations,
warranties, covenants and conditions precedent to additional draws
under the 2021 Revolving Facility. The amended debt facility
continues to be secured by all of the assets of Minera Media Luna
and secured guarantees of the Company and each of its other
subsidiaries with a direct or indirect interest ELG and/or the
Media Luna Project.
Table 1: LIBOR Applicable Margins Based on Net Leverage
Ratio
|
Level |
Net Leverage Ratio |
|
LIBOR Applicable Margin |
|
|
I |
≤ 1.00x |
|
275 bps |
|
|
II |
>1.00x and ≤ 2.00x |
|
300 bps |
|
|
III |
>2.00x and ≤ 2.50x |
|
325 bps |
|
|
IV |
>2.50x |
|
375 bps |
|
The 2021 Revolving Facility matures on March 30, 2023 with a
step down in capacity by $25 million on September 30, 2022 and
again on December 21, 2022.
The Third Amended and Restated Credit Agreement will be posted
today under the Company’s profile on SEDAR at www.sedar.com.
ABOUT TOREX GOLD RESOURCES
INC.Torex is an intermediate gold producer based in
Canada, engaged in the exploration, development, and operation of
its 100% owned Morelos Gold Property, an area of 29,000 hectares in
the highly prospective Guerrero Gold Belt located 180 kilometers
southwest of Mexico City. The Company’s principal assets are the El
Limón Guajes mining complex (“ELG” or the “ELG Mine Complex”)
comprising the El Limón, Guajes and El Limón Sur open pits, the El
Limón Guajes underground mine including zones referred to as
Sub-Sill and El Limón Deep (“ELD”), and the processing plant and
related infrastructure, which commenced commercial production as of
April 1, 2016, and the Media Luna deposit, which is an advanced
stage development project, and for which the Company issued an
updated preliminary economic assessment in September 2018. The
property remains 75% unexplored.
FOR FURTHER INFORMATION, PLEASE CONTACT: |
|
|
TOREX GOLD RESOURCES INC. |
|
Jody Kuzenko |
Dan Rollins |
President and CEO |
Vice President, Corporate Development & Investor Relations |
Direct: (647) 725-9982 |
Direct: (647) 260-1503 |
jody.kuzenko@torexgold.com |
dan.rollins@torexgold.com |
CAUTIONARY NOTESThis press
release contains “forward-looking statements” and “forward-looking
information” within the meaning of applicable Canadian securities
legislation. Forward-looking information includes, but is not
limited to, the further draws on the 2021 Revolving Facility which
are subject to certain conditions; and the expectation that the
Company’s robust cash balance and the ongoing support of the
banking syndicate will provide significant financial flexibility to
develop Media Luna and other future projects, a reduced cost of
debt, and can potentially return excess capital to shareholders.
Generally, forward-looking information can be identified by the use
of forward-looking terminology such as “expects” or variations of
such words and phrases or state that certain actions, events or
results “may” or “will” occur. Forward-looking information is based
on the reasonable assumptions, estimates, analysis and opinions of
management made at the date that such statements are made,
including without limitation, the Company’s ability to operate
profitability and general sufficient funds to finance development
activities, the ability to service the loan and maintain compliance
with the financial covenants under the 2021 Revolving Facility, and
other assumptions identified in the Company’s annual information
form (“AIF”) and the Company’s management’s discussion and analysis
(“MD&A”) and other continuous disclosure documents of the
Company. Forward-looking information is subject to known and
unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of
the Company to be materially different from those expressed or
implied by such forward-looking information including those risk
factors identified in the AIF and MD&A and other continuous
disclosure documents of the Company. Forward-looking information is
based on the reasonable assumptions, estimates, analysis and
opinions of management made in light of its experience and its
perception of trends, current conditions and expected developments,
as well as other factors that management believes to be relevant
and reasonable in the circumstances at the date that such
statements are made, but which may prove to be incorrect. Although
the Company believes that the assumptions and expectations
reflected in such forward-looking information are reasonable, undue
reliance should not be placed on forward-looking information
because the Company can give no assurance that such expectations
will prove to be correct. There can be no assurance that such
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. The Company does not undertake to update any forward-
looking information, except in accordance with applicable
securities laws.
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