Closes New US$200M Credit Facilities
Victoria Gold Corp. (TSXV:GCX) has added to its funding “war chest” with a decision to enter into a credit agreement with a syndicate of banks, comprised of Bank of Montreal, as Joint Bookrunner, Co-Lead Arranger and Administrative Agent, CIBC, as Joint Bookrunner and Co-Lead Arranger, and BNP Paribas, as Co-Lead Arranger in connection with a secured US$200 million debt facility.
The Loan Facility is comprised of a US$100 million term loan and a US$100 million revolving facility.
All conditions precedent for the drawdown of the Loan Facility have been satisfied and the company has drawn the full amount of the Term Facility and approximately US$75 million of the Revolving Credit Facility.
President and CEO, John McConnell, said the funding from the Loan Facility has been used to repay previously outstanding project finance facility, which included senior and subordinated debt that was used for the construction of the Eagle Gold Mine. The Revolving Credit Facility is available for general corporate purposes subject to customary terms and conditions.
“We are thrilled to have achieved our objective to refinance the project finance facility in advance of our targeted time frame,” Mr McConnell said.
“The Loan Facility features substantially lower interest rates which is anticipated to reduce carrying costs by approximately 50% in 2021. The Loan Facility also provides notably improved flexibility headlined by the ability to draw and repay the Revolving Credit Facility as required and more latitude with respect to permitted distributions including investments, share buybacks and dividends.
“Prior to repaying the project facilities, the company had paid over US$54 million in principal and interest against the original project construction facilities. Given current gold prices, the company anticipates generation of sufficient free cash flow to continue to pay down material amounts of debt during calendar 2021.”
An equipment lease facility with Caterpillar Financial Services Limited remains in place. In conjunction with the refinancing of the project debt outlined herein, and subject to acceptable documentation, the terms of the Cat Financial equipment lease facility are to be amended in Victoria’s favour including a reduction in the interest rate.
Victoria Gold’s 100%-owned Dublin Gulch gold property is situated in central Yukon Territory, Canada.
Victoria Gold’s Eagle Gold Mine achieved commercial production on July 1, 2020. The mine is expected to produce an average of 210,000 ounces of Au per year for over 10 years.
Exploration potential of the greater Dublin Gulch property is excellent and includes priority targets Olive-Shamrock, Nugget-Raven and Lynx amongst others.