Aurcana Announces Receipt of Credit Approval for US$28M Term Loan to Restart the Revenue-Viriginius Mine
October 22 2020 - 8:00AM
AURCANA SILVER CORPORATION ("
Aurcana" or the
"
Company") (TSXV: AUN, OTCQX: AUNFF) is
pleased to announce that it has received credit approval for a
US$28 million dollar project financing facility to fund the restart
of Aurcana’s wholly owned Revenue-Virginius mine (the
“
Revenue Mine”) located in Ouray, Colorado. The
lender under the facility will be an indirect, wholly owned
subsidiary of Mercuria Energy Group Limited
(“
Mercuria”). The financing will be in the form of
a secured term loan (“
Term Loan”). Mercuria will
also provide the Revenue Mine with a hedging program against
approximately 29% of its anticipated production profile over the
first five years. Mercuria has completed technical due diligence
and the parties have executed an approved term sheet for the Term
Loan that is subject to final legal due diligence and completion of
mutually acceptable documentation.
Kevin Drover, CEO of Aurcana, notes, “Once
funded, this financing will be the key piece to fully fund the
restart of commercial production at the Revenue Mine. Achieving
this milestone is the direct result of the hard work of our people,
especially our technical team and the workforce on the ground
preparing the Revenue Mine for production. We are fortunate to have
found a partner in Mercuria who shares our vision of the value of
the Revenue Mine and the products it will produce.”
Material terms of the Term Loan include:
- Senior security on the Revenue Mine
with a corporate guarantee from Aurcana
- $28 million financing disbursed as
a lump sum at Closing
- 60 month term, with a 12 month
grace period with equal quarterly amortization thereafter;
repayable in full at any time with a minimum 12 month interest make
whole.
- Interest rate of USD 3M LIBOR + 14%
dropping to USD 3M LIBOR + 10.5% after three (3) consecutive months
of production in excess of 400 wet tons per month of lead
concentrate (the target run rate under the 2018 feasibility study).
Interest is payable quarterly in arrears.
- Customary representations,
warranties, affirmative and negative covenants, events of default,
and closing conditions
The closing and funding of the Term Loan is
expected in the fourth quarter of 2020. There is no guarantee the
financing on the above terms and conditions will be completed. Roc
Global acted as the exclusive financial advisor to Aurcana on this
debt financing.
The Company forecasts 6 months to initial
production for the Revenue Mine and 9 months to cash flow positive
pursuant to the 2018 feasibility study (the “2018 FS”) prepared in
accordance with National Instrument NI 43-101 – Standards of
Disclosure for Mineral Projects (“NI 43-101”) demonstrating an
economic viability to restarting of the mine. A copy of the 2018 FS
is posted on the Company’s website www.aurcana.com and is also
available on the Company’s profile on SEDAR at www.sedar.com.
Qualified Person StatementThe
scientific and technical content of this news release was reviewed
and approved by Michael Gross, P. Geo, a “qualified person” within
the meaning of NI 43-101
ABOUT AURCANA SILVER
CORPORATION
Aurcana Silver Corporation owns the Revenue
Mine, in Colorado, and the Shafter-Presidio Silver Project in
Texas, US. The primary mineral resource at both the
Shafter-Presidio Project and the Revenue Mine is silver. Both are
fully permitted for production.
ABOUT MERCURIA ENERGY
GROUP LIMITED
Founded in 2004, Mercuria is one of the largest
independent energy and commodity groups in the world, bringing
efficiency to the commodity value chain with cutting-edge
technology and unmatched expertise and solutions. Mercuria’s
business includes trading flows, strategic assets and structuring
activities that generate more than USD 120 billion in turnover. It
operates from offices around the world, with a strong presence in
the Americas, Asia and Europe. Information on Mercuria can be found
on its website at www.mercuria.com.
ON BEHALF OF THE BOARD OF DIRECTORS OF AURCANA SILVER
CORPORATION
“Kevin Drover”President & CEO
For further information, visit the website at www.aurcana.com or
contact:
Aurcana Corporation850 – 789 West Pender StreetVancouver, BC V6C
1H2Phone: (604) 331-9333
Gary Lindsey, Corporate CommunicationsPhone: (720)-273-6224
Email: gary@strata-star.com
CAUTIONARY NOTES
This press release contains forward looking
statements within the meaning of applicable securities laws. The
use of any of the words “anticipate”, “plan”, “continue”, “expect”,
“estimate”, “objective”, “may”, “will”, “project”, “should”,
“predict”, “potential” and similar expressions are intended to
identify forward looking statements. In particular, this press
release contains forward looking statements concerning, without
limitation, statements relating to the Private Placement (including
with respect to the timing of closing of the Private Placement).
Although the Company believes that the expectations and assumptions
on which the forward looking statements are based are reasonable,
undue reliance should not be placed on the forward looking
statements because the Company cannot give any assurance that they
will prove correct. Since forward looking statements address future
events and conditions, they involve inherent assumptions, risks and
uncertainties. Actual results could differ materially from those
currently anticipated due to a number of assumptions, factors and
risks. These assumptions and risks include, but are not limited to,
assumptions and risks associated with the receipt of regulatory or
shareholder approvals, and risks related to the state of financial
markets or future metals prices.
Management has provided the above summary of
risks and assumptions related to forward looking statements in this
press release in order to provide readers with a more comprehensive
perspective on the Company’s future operations. The Company’s
actual results, performance or achievement could differ materially
from those expressed in, or implied by, these forward looking
statements and, accordingly, no assurance can be given that any of
the events anticipated by the forward looking statements will
transpire or occur, or if any of them do so, what benefits the
Company will derive from them. These forward looking statements are
made as of the date of this press release, and, other than as
required by applicable securities laws, the Company disclaims any
intent or obligation to update publicly any forward looking
statements, whether as a result of new information, future events
or results or otherwise.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
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