Amaroq Minerals agrees $35m in new credit facilities
Amaroq Minerals Ltd. Npv (DI)
60.67p
13:39 04/07/24
Amaroq Minerals announced an agreement in principle with Landsbankinn for $35m in three revolving credit facilities on Tuesday, making for a significant increase and extension of its current debt arrangements.
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The AIM-traded firm said the development, subject to final documentation, simplified its debt structure and enhanced its liquidity and financial flexibility.
It said the package included a $28.5m facility with a margin of 9.5% per annum, which would reduce to 7.5% once fully drawn and the company achieves a cumulative EBITDA over CAD 6m in a three-month period.
The facility, replacing the existing revolving credit facilities entered into on 1 September 2023, allocated $18.5m for the completion of the Nalunaq development, with the remaining funds available for general corporate purposes.
Additionally, the agreement included a $6.5m facility with a margin of 7.5% per annum, available for general corporate purposes once all other facilities had been fully used.
The board said the facilities featured a 1.5% arrangement fee and a 0.4% commitment fee on unused amounts, with an expected maturity date of 1 October 2026.
They would also be subject to certain ongoing covenant tests, with further details to be provided upon the closing of definitive documentation.
Amaroq said it was aiming to finalise the legally binding documentation for the facilities before the end of the year, and until then, its currently-undrawn $28.5m debt facilities would remain in place.
The final agreement with Landsbankinn would be coordinated with Amaroq’s existing debt holders, including Fossar Investment Bank, GCAM, JLE Property, First Pecos, and Linda Investments.
“We are very pleased to have successfully arranged a substantial increase and extension of our currently undrawn debt financing package with Landsbankinn,” said chief executive officer Eldur Olafsson.
“In addition to simplifying the structure of our debt package under one single agreement at more favourable rates, the new facilities strengthen our liquidity and provide us with further financial flexibility for years to come.
“With a long-term debt agreement now secured for general purposes, we are committed to maintaining a strong capital management plan as we progress the development of our cornerstone Nalunaq project in south Greenland towards first gold this year.”
At 1130 BST, shares in Amaroq Minerals were up 0.53% at 64.84p.
Reporting by Josh White for Sharecast.com.