Aurcana announces the closing of a US $ 28 million term loan with
VANCOUVER, British Columbia, December 9, 2020 (GLOBE NEWSWIRE) – AURCANA SILVER CORPORATION (“Aurcana“or the”Company“) (TSXV: AUN) is pleased to announce that it has closed the previously announced US $ 28 million project finance facility to finance the restart of Aurcana’s wholly-owned Revenue-Virginius mine (the”Income mine”) Located in Ouray, Colorado. The Lender under the Facility is an indirect wholly-owned subsidiary of Mercuria Energy Group Limited (“Mercuria”). The financing takes the form of a guaranteed term loan (“Term loan”). Mercuria also provided the revenue mine with a hedging program against approximately 29% of its expected silver production profile over the next five years.
Important terms of the term loan include:
- Senior security on the revenue mine with a company guarantee from Aurcana
- Funding of $ 28 million disbursed as a lump sum at closing
- Duration of 60 months, with a grace period of 12 months with equal quarterly amortization thereafter; fully repayable at any time with a minimum interest of 12 months.
- Interest rate of USD 3M LIBOR + 10.5% after three (3) consecutive months of production of more than 400 wet tons per month of lead concentrate (the target execution rate in the 2018 feasibility study) ; USD 3M LIBOR + 14% until then. Interest is payable quarterly in arrears.
- Usual representations, guarantees, affirmative and negative commitments, events of default and closing conditions
ROC Global acted as Aurcana’s exclusive financial advisor for this debt financing.
Aurcana is also pleased to announce that its indirect wholly owned subsidiary Ouray Silver Mines, Inc., the direct owner of the revenue mine, has signed a 5 year drawdown agreement with Trafigura Trading LLC (“Trafigura“) For 100% of the production of lead and zinc concentrate from the revenue mine (“Direct debit agreement”). The term of the Direct Debit Agreement corresponds to that of the Term Loan and is structured to allow for annual renewal thereafter by mutual consent.
Kevin Drover, CEO of Aurcana commented: “This funding is a transformative step for Aurcana, allowing us to proceed with the long awaited restart of full operations of the revenue mine. The Board formally approved the restart decision. We appreciate the efforts of everyone, including Mercuria, to secure this funding and look forward to our continued partnership with them. We are also delighted to have chosen the leading trading company Trafigura as our direct debit partner. These events are the realization of our vision when we completed the reverse takeover of OSMI in 2018, and it is an exciting day for Aurcana and our team at the Revenue Mine.
The Company continued to advance pre-development activities at the revenue mine in anticipation of closing and believes it is well positioned to be in production in the 3rd calendar quarter 2021, in accordance with the Company’s forecasts in accordance with the 2018 Feasibility Study (the “2018 FS”) prepared in accordance with Regulation 43-101 respecting Disclosure of Mineral Projects (“Regulation 43-101”) . A copy of the FS 2018 is posted on the company’s website www.aurcana.com and is also available on the Company Profile on SEDAR at www.sedar.com.
Qualified Person Declaration
The scientific and technical content of this press release has been reviewed and approved by Michael Gross, P. Geo, a “qualified person” within the meaning of National Instrument 43-101.
ABOUT AURCANA SILVER CORPORATION
Aurcana Silver Corporation owns the Revenue Mine, Colorado, and the Shafter-Presidio Silver Project in Texas, United States. The primary mineral resource for the Shafter-Presidio Project and Revenue Mine is silver. Both are fully licensed for production.
ABOUT MERCURIA ENERGY GROUP LIMITED
Founded in 2004, Mercuria is one of the largest independent energy and commodity groups in the world, bringing efficiency to the commodity value chain with cutting-edge technology and expertise and solutions. unmatched. Mercuria’s business includes trade flows, strategic assets and structuring activities which generate more than $ 120 billion in revenue. It operates from offices around the world, with a strong presence in the Americas, Asia and Europe. Information on Mercuria can be found on its website at www.mercuria.com.
ON BEHALF OF THE BOARD OF DIRECTORS OF AURCANA SILVER CORPORATION
President and CEO
For more information, visit the website at www.aurcana.com or contact:
850-789 Pender Street West
Vancouver, British Columbia V6C 1H2
Telephone: (604) 331-9333
Gary Lindsey, Corporate Communications
Telephone: (720) -273-6224
Email: [email protected]
This press release contains forward-looking statements within the meaning of applicable securities laws. The use of any of the words “anticipate”, “plan”, “continue”, “expect”, “estimate”, “objective”, “can”, “will”, “plan”, “should” , “Anticipate”, “Potential” and similar expressions are intended to identify forward-looking statements. In particular, this press release contains forward-looking statements regarding, without limitation, statements relating to the private placement (including with respect to the timing of the closing of the private placement). Although the company believes that the expectations and assumptions upon which forward-looking statements are based are reasonable, forward-looking statements should not be relied on unduly because the company can give no assurance that they will prove to be correct. Because forward-looking statements concern future events and conditions, they involve inherent assumptions, risks and uncertainties. Actual results could differ materially from those currently expected due to a number of assumptions, factors and risks. These assumptions and risks include, but are not limited to, assumptions and risks associated with obtaining regulatory or shareholder approvals, and risks relating to the state of the financial markets or future metal prices.
Management has provided the above summary of the risks and assumptions relating to forward-looking statements in this press release in order to provide readers with a more complete perspective on the future business of the Company. The actual results, performance or achievements of the Company could differ materially from those expressed or implied in these forward-looking statements and, therefore, no assurance can be given that any of the events predicted by the forward-looking statements will or will occur. , or if one of them does, what benefits the Company will derive from it. These forward-looking statements are made as of the date of this press release and, except as required by applicable securities laws, the Company rejects any intention or obligation to publicly update any forward-looking statement, whether as a result of new information, future events or results or otherwise.
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