VANCOUVER, April 21, 2017 /CNW/ - Capstone Mining Corp. ("Capstone") (TSX: CS) has amended its Senior Secured Corporate Revolving Credit Facility ("RCF") to provide for an extension to April 19, 2021 and a reduction in the credit available under the facility.
- Extends the maturity of the Third Amended and Restated Credit Agreement from January 16, 2019 to April 19, 2021;
- Reduces the credit limit to $350 million on April 19, 2017 and requires an annual $25 million reduction on each anniversary of the facility to $275 million on April 19, 2020;
- Maintains the current pricing grid (starting at LIBOR + 2.5% and adjustable to LIBOR + 3.5% depending on the total leverage ratio) until March 31, 2019, after which date pricing increases to LIBOR + 3.0% (adjustable to LIBOR + 4.5% depending on the total leverage ratio); and
- Cancels the accordion feature of $60 million.
All other material terms and conditions of the existing RCF remain in place for the life of the facility.
In addition to the amendment described above, Capstone repaid $10 million on April 19, 2017, reducing drawn debt to $298.9 million.
"This extension of our current low-cost, flexible credit facility, gives Capstone significant financial flexibility and right sizes the facility to meet our current and anticipated operating requirements," said Darren Pylot, President and CEO of Capstone. "Our current drawn debt of approximately $300 million is comfortably within this amended availability and we have a cash balance of over $100 million."
"We plan to apply free cash from operations to reduce debt to a sustainable level at commodity prices that reflect bottom of the cycle prices, which will provide an additional cushion of undrawn credit," continued Mr. Pylot. "This effectively addresses financing risk over the term of the facility, which we believe will correspond to a stabilization and gradual improvement in copper prices."
The amendment of the facility was led by The Bank of Nova Scotia (Co-Lead Arranger, Joint Bookrunner and Administrative Agent), the Canadian Imperial Bank of Commerce (Co-Lead Arranger, Joint Bookrunner and Syndication Agent) and Wells Fargo Bank N.A., Canadian Branch (Documentation Agent). Other syndicate lenders include Citibank, N.A.; Export Development Canada; Bank of Montreal; and ING Capital LLC.
About Capstone Mining Corp.
Capstone Mining Corp. is a Canadian base metals mining company, focused on copper. We are committed to the responsible development of our assets and the environments in which we operate. Our three producing mines are the Pinto Valley copper mine located in Arizona, US, the Cozamin polymetallic mine in Zacatecas State, Mexico and the Minto copper mine in Yukon, Canada. In addition, Capstone has two development projects; the large scale 70% owned copper-iron Santo Domingo project in Region III, Chile, in partnership with Korea Resources Corporation, and the 100% owned Kutcho copper-zinc project in British Columbia, Canada, as well as exploration properties in Chile and US. Capstone's strategy is to focus on the optimization of operations and assets in politically stable, mining-friendly regions, centred in the Americas. Our headquarters are in Vancouver, Canada and we are listed on the Toronto Stock Exchange (TSX). Further information is available at www.capstonemining.com.