Mandalay Resources Corp. (TSX:MND, OTCQB:MNDJF) said it has entered into a credit agreement with Bank of Nova Scotia for a senior secured revolving credit facility in an aggregate amount of up to $35 million.
The initial drawdown will be used to repay the company's existing syndicated facility with HSBC Bank Canada and Macquarie Bank Limited which had $32.6 million outstanding before repayment while the residual proceeds will be used for general corporate and working capital purposes. The hedge arrangements entered into in connection with the existing facility will remain in place until their expiry in June 2023.
"We are extremely pleased to have accomplished this refinancing with Scotiabank,” Dominic Duffy, president and CEO of Mandalay said in a statement.
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“The Revolving Credit Facility was obtained at a reduced rate compared to that of the Existing Facility and provides us with financial flexibility as it removes the need for the US$28.8 million balloon payment that existed with the Existing Facility which was due in March 2023. We look forward to working with Scotiabank in the future which will contribute to the long-term success of the company," he added.
The facility has a term of three years and has no hedging requirements, the company said, adding that it may cancel any unused portion of the facility without penalty at any time and may also prepay any portion of the loan without penalty, subject to certain exceptions.
Scotiabank will hold security over the majority of the company's material assets.
Mandalay is a Canada-based natural resource company with producing assets in Australia and Sweden. It also has projects in Chile and Canada under care and maintenance, closure or development status. The company focuses on growing its production profile and reducing costs to generate significant positive cash flow.
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