Santacruz Silver Mining Ltd (TSX-V:SCZ, OTC:SZSMF)’s plan to accelerate its debt payments to Glencore will save $40 million and clean up its balance sheet, making the company more attractive to investors, according to analysts at Atrium Research.
On Thursday, Santacruz announced that it has structured and implemented a new plan to exercise its option to accelerate its payments to Glencore in consideration for its Bolivian mining assets.
The company is positioned to save $40 million as the debt is reduced from $80 million to $40 million if paid off by November 2025.
“The savings come from there being a lower interest burden on the company and the structure of the deal,” Atrium’s analysts wrote.
The analysts also noted a recent debt offering completed by Santacruz’s subsidiary San Lucas. Via the issue of promissory notes, San Lucas raised 70M Bolivian Boliviano.
“The offering, which was executed on the Bolivian Stock Market, was oversubscribed and sold out in just 15 minutes, reflecting strong demand from investors,” they wrote.
“This successful issuance is part of Santacruz's strategy to diversify funding sources and strengthen its capital structure.”
Atrium repeated its ‘Buy’ rating and C$0.90 price target on Santacruz, implying upside of 64% at the time of writing.
“Despite rallying 80% in the year to date, Santacruz still only trades at 2.8x its 2025 operating cash flow,” they noted.
Santacruz Silver operates, acquires, explores, and develops silver and other metal properties in Latin America, with major operations in Bolivia and Mexico.