EXK - Endeavour Silver Closes US$120 Million Project Loan Debt Facility to Advance the Development of Terronera | Benzinga
VANCOUVER, British Columbia, Oct. 10, 2023 (GLOBE NEWSWIRE) -- Endeavour Silver Corp. ("Endeavour" or the "Company") (NYSE:EXK, TSX:EDR) is pleased to announce that its wholly-owned subsidiary, Terronera Precious Metals, S.A. de C.V. (Terronera) has executed the credit agreement for a senior secured debt facility for up to $120 million (the "Debt Facility") with ING Capital LLC (together with ING BANK N.V. "ING") and Societe Generale acting as Joint Lead Arrangers. Proceeds from the Debt Facility will be used towards construction of the underground mine and mill at the Company's Terronera Project in Jalisco state, Mexico. All references to dollars ($) in this news release are in United States dollars.
"Completion of the project loan marks a step forward in our deep-rooted commitment to creating shareholder value and executing on our strategic vision to foster economic growth, environmental responsibility, and to positively impact lives by promoting local development", said Dan Dickson, Endeavour's CEO. "ING and Societe Generale are tier one lenders to the mining industry, and we are grateful for their partnership and support towards executing this vision. We look forward to unlocking all these benefits as we advance Terronera towards production."
Debt Facility Details
Key terms of the Debt Facility are consistent with those previously announced in the Company's news release dated April 18, 2023 and include the following:
- Facility amount - Up to $120 million principal amount on senior secured debt.
- Term - 8.5 years, including a 2-year grace period during the construction phase. Cash sweep will be applied to 35% of excess cash flow after debt service from completion onwards until $35 million of loan principal has been prepaid.
- Interest rate - US Secured Overnight Financing Rate ("SOFR") + 4.50% per annum prior to completion (SOFR + 3.75% per annum upon completion).
- Repayment and maturity - Principal payments are payable in quarterly installments commencing in the fourth quarter of 2025.
- Gold hedge – Prior to initial drawdown, Terronera is required to enter into a hedging program for 68,000 ounces of gold over the initial two operating years prior to initial drawdown. No hedging requirements apply to the silver production.
- Foreign exchange hedge – Prior to initial drawdown, Terronera is required to enter into a hedging program for managing exposure to the Mexican Peso during construction. The program requires approximately 75% of the remaining capital expenditure incurred in Mexican Pesos be hedged. Prior to initial production, a hedging program is required for managing exposure to the Mexican Peso during operations. Under this program 50% of the ...