Excellon Resources Inc (TSX:EXN, OTCQB:EXNRF) has reported progress in securing offtake-linked financing to support the restart of operations at the Mallay Silver Mine in Peru.
The company said it has received multiple non-binding proposals from leading trading houses for zinc and lead concentrate offtake agreements.
Each proposal includes a prepayment or structured finance facility to support restart activities at the mine, according to a statement from Excellon.
The proposed financing facilities range from US$4 million to US$6 million. The tenors extend up to 30 months, with grace periods during the ramp-up phase. The annual interest rates for the proposals range from 5% to 7% above the Secured Overnight Financing Rate (SOFR).
"The interest we've received from globally recognized trading partners for Mallay concentrate validates our strategy to restart Mallay and reinforces our confidence in the project's potential,” Excellon CEO Shawn Howarth said in a statement.
“These proposals provide competitive terms and flexible structures to meet our capital requirements while forming long-term commercial partnerships. We're highly encouraged by the momentum and expect to finalize a preferred financing solution in the near term.”
Finalization of the agreements remains subject to customary due diligence and the completion of Excellon’s previously announced acquisition of Minera CRC, the owner of Mallay.
The proposed offtake terms include multi-year commitments for 100% of production. Excellon expects to close the acquisition of Minera CRC in April 2025 and to conclude offtake discussions at the same time.
Shares of Excellon added 8% on Thursday morning in Toronto.