Resolute Mining announces new $300m loan facility
Resolute Mining has executed documentation for a new flexible low-cost syndicated loan facility with a maximum limit of $300m, it announced on Friday.
The London-listed firm said the facility would refinance the $63m secured project loan facility provided by Taurus Funds Management for the initial construction of the Mako Gold Mine in Senegal, as well as replace $195m of existing senior bank debt facilities.
It said the new $300m facility comprised a three-year $150m revolving credit facility, and a four-year $150m term loan facility.
The company said it had retained the support of its existing senior bank financiers BNP Paribas, Citibank, Investec and Nedbank, and secured support from new syndicate participants ING Group and Société Générale.
It said the facility would provide it with flexible low-cost debt under terms which were “highly competitive” for such a senior debt facility.
Interest payable on the drawn balance would be LIBOR, plus a margin of 4%.
Resolute explained that the facility would simplify its capital structure, remove restrictive conditions associated with the project loan facility, and reduce its annual borrowing costs.
Drawdown under the facility was expected to occur during the week of 23 March.
The facility was expected to be drawn to about $250m to enable the complete repayment of the Mako project loan facility.
Resolute said the refinancing of the Mako project loan followed its agreement to acquire the related project royalty over Mako in January, and the complete repayment of the $130m acquisition bridge facility in February.
It said Mako would form part of its overall security package for the syndicated loan facility, and would have no external royalty or independent encumbrance.
As such, the full benefit of Mako's positive cash flows would now be available to Resolute.
“I thank our world class banking syndicate for their appreciation of the fundamental strength of our business,” said managing director and chief executive officer John Welborn.
“We now have a simple low-cost flexible senior debt package which reduces our borrowing costs, provides immediate liquidity, and will provide important flexibility for the funding of future growth initiatives.”
Welborn said the board expected the undrawn capacity of the facility to increase during 2020, as the company generated positive cash flows from Syama and Mako and paid down debt.
“We look forward to working with our banking group to create further value for our shareholders.”
At 1345 GMT, shares in Resolute Mining were up 8.77% at 41p.