Excellon Resources Inc (TSX:EXN, OTCQB:EXNRF) told investors it has now closed an offtake and financing agreement with Glencore subsidiaries to support the restart of the Mallay silver mine in Peru.
The Glencore facility provides up to US$7.5 million in the form of a pre-export finance loan, comprising an initial drawdown of up to US$5 million, and an optional US$2.5 million available until March 2026.
Proceeds will fund the restart of Mallay, with funds earmarked for underground development, mill upgrades and the working capital required to reach commercial production.
“The closing of our agreement with Glencore marks a major milestone in our journey to return Excellon to silver production," said chief executive Shawn Howarth.
"With additional and flexible funding now secured, we continue to execute on our restart plan at Mallay, a project with exceptional infrastructure and near-term cash flow potential.”
The deal gives Glencore the right to purchase 100% of Mallay’s zinc and lead concentrates that contain silver by-product. Meanwhile, the loan carries interest at SOFR + 5%, it is secured against concentrate sales, and has a six-month grace period after the first drawdown. Monthly prepayments are expected to run through to 2027.