Torex Gold Resources Inc. (the “Company” or “Torex”) (TSX: TXG) is
pleased to announce that the Company’s wholly-owned subsidiary
Minera Media Luna, S.A. de C.V. (“MML”) has signed an amended and
restated credit agreement with Bank of Montreal, BNP Paribas, ING
Bank N.V., Dublin Branch, Société Générale and The Bank of Nova
Scotia (the “Banks”) in connection with a secured $335 million debt
facility (the “Debt Facility”).
The Debt Facility is an amendment and
restatement of the secured $400 million debt facility entered into
as of July 21, 2017 (the “2017 Facility”). The Debt Facility is
comprised of a $185 million term loan (the “Term Facility”) and a
$150 million revolving loan facility (the “Revolving Facility”).
All conditions precedent to the initial advance under the Debt
Facility have been satisfied as of July 30, 2019, and at that date,
the full amount of the Term Facility and $100 million of the
Revolving Facility is outstanding. Proceeds of the Term
Facility and the Revolving Facility were used to refinance the 2017
Facility. The Company may use the Revolving Facility for general
corporate purposes, including certain development expenditures and
acquisitions, in all cases subject to the conditions of the Debt
Facility.
Fred Stanford, President and CEO of Torex,
stated:
“The amended Debt Facility provides the company
with greater financial flexibility to fund our future growth
projects. The strong support exhibited by our partner Banks, is a
direct result of the productive relationship which has been
established over the years, as well as recognition by our partners
in the cash flow potential of El Limón Guajes.”
Steven Thomas, CFO of Torex, added:
“The strong relationship with our lending
partners has enabled us to amend the Debt Facility to better meet
the needs of the Company with greater flexibility than was in place
in the 2017 Facility. The advantages of the amended Debt Facility
include more flexible access to resources for the development of
our Media Luna Project and other future projects, a reduction in
debt costs, extended maturity for the Revolving Facility relative
to the prior facility, and removal of some of the conditions
required in the 2017 Facility when the operation was less
advanced.”
The Debt Facility has a lower interest rate and
a revised repayment schedule for the Term Facility (as compared to
the 2017 Facility). The Debt Facility permits, including by use of
the Revolving Facility, potential spending to facilitate the
development of the Media Luna Project, the Muckahi mining system,
and other existing or future projects of the Company, subject to
the conditions of the Debt Facility, including compliance with (i)
financial covenants related to maintaining a net leverage ratio,
debt service coverage ratio and a minimum cash balance and (ii)
certain thresholds with respect to quantum of development
expenditures and the amount spent on the Muckahi mining system. In
addition to providing greater flexibility for the company to fund
its growth and development projects, it also removes certain
covenants such as mandatory cash sweeps previously in place in the
2017 Facility.
The Debt Facility bears interest at a rate of
LIBOR + 3% and includes standard and customary finance terms and
conditions including with respect to fees, representations,
warranties, covenants and conditions precedent to additional draws
under the Revolving Facility. The Debt Facility is secured by all
of the assets of MML and secured guarantees of the Company and
certain of its other subsidiaries. The Revolving Facility and the
Term Facility will mature June 30, 2022; provided that the
Revolving Facility will be reduced to $100 million on December 31,
2021. The Revolving Facility and the Term Facility may be repaid in
full at any time without penalty or premium.
The Company was advised by Cassels Brock &
Blackwell LLP (Canadian Counsel) and Sánchez-Mejorada, Velasco y
Ribé (Mexican Counsel). The Banks were advised by Fasken Martineau
DuMoulin LLP (Canadian Counsel), Ritch Mueller, S.C. (Mexican
Counsel) and Hatch Ltd. (Independent Engineer).
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 (the “ELG Mine Complex”), comprised of
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, and the processing plant and related infrastructure,
which is in the commercial production stage as of April 1, 2016,
and the Media Luna deposit, which is an early 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. |
|
Fred Stanford President and CEO Direct: (647) 260-1502
Email: fred.stanford@torexgold.com |
Dan Rollins Vice President, Corporate Development & Investor
Relations Direct: (647) 260-1503 Email:
dan.rollins@torexgold.com |
CAUTIONARY NOTES
Muckahi Mining System The
Company’s most recent annual information form (“AIF”) and the
technical report entitled “Morelos Property, NI 43-101 Technical
Report, ELG Mine Complex, Life of Mine Plan and Media Luna
Preliminary Economic Assessment, Guerrero State, Mexico” with an
effective date of March 31, 2018 (filing date September 4,2018)
(the “Technical Report”) include information on Muckahi. It
is important to note that Muckahi is experimental in nature and has
not been tested in an operating mine. Many aspects of the
system are conceptual, and proof of concept has not been
demonstrated. Drill and blast fundamentals, standards and best
practices for underground hard rock mining are applied in the
Muckahi, where applicable. The proposed application of a monorail
system for underground transportation for mine development and
production mining is unique to underground hard rock mining. There
are existing underground hard rock mines that use a monorail system
for transportation of materials and equipment, however not in the
capacity described in the Technical Report. Aspects of Muckahi
mining equipment are currently in the design and test stage. The
mine design, equipment performance and cost estimations are
conceptual in nature, and do not demonstrate technical or economic
viability. The Company expects to complete the development and test
the concept by the end of 2019 for the mine development and
production activities. Further studies would be required to verify
the viability of Muckahi.
Forward-looking StatementsThis
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 Revolving
Facility which are subject to certain conditions, and the plans to
fund the development of Media Luna Project, Muckahi mining system
and other existing or future projects of the Company, the potential
advantages that may be obtained from the Debt Facility, potential
for growth opportunities and the expectation of the potential of
the Muckahi mining system. Generally, forward-looking information
can be identified by the use of forward-looking terminology such as
“plans”, “expects”, “estimates”, “intends”, “anticipates” or
“believes” or variations of such words and phrases or state that
certain actions, events or results “may”, “could”, “would”,
“might”, or “will be taken”, “occur”, or “be achieved”.
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
Debt Facility, and other assumptions identified in the Technical
Report, the AIF and the Company’s management’s discussion and
analysis (“MD&A”). 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 Technical Report, AIF and
MD&A. 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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