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Barclays, Others Join in $150MM Endeavour Mining Upsize

September 20, 2017, 07:15 AM
Filed Under: Mining

Endeavour Mining announced that it has refinanced its previous Revolving Credit Facility (RCF) on improved terms and upsized it to $500 million from $350 million, thereby providing significant headroom to fund its growth projects.

Sébastien de Montessus, President & CEO, stated: "We are delighted to increase and extend the RCF on significantly improved terms with strong endorsements from our existing bank group, and the addition of 3 new lenders to our syndicate who are global leaders in mining finance.

Our ability to fund our growth projects is further strengthened with this upsized RCF which complements our existing cash position, future cash flow generation from our operating mines as well as the expected proceeds from the Nzema mine sale. With project payback periods of less than two years at both Hounde and Ity, we expect to quickly repay any drawn portion of the RCF while preserving our flexibility to fund future projects."

On September 19, Endeavour entered into an Amended and Restated Facility Agreement with a syndicate of international banks for an upsized and extended RCF with improved terms compared to its previous RCF, which was established in March 2015.

The key terms of the upsized RCF include:

  • Principal amount of $500 million, representing a $150 million increase from the principal amount of $350 million under the 2015 RCF.
  • The new RCF will bear interest of between LIBOR plus 2.95% to 3.95% based on the Company's leverage ratio, a decrease compared to its previous RCF interest rate of LIBOR plus 3.75% to 5.75%.
  • Commitment fees for the undrawn portion of the facility of 1.03%, compared to 1.31% to 2.01% (depending on the applicable margin) with its previous RCF.
  • Lower maintenance costs, which are expected to represent savings of approximately $5 million per year compared to the previous RCF.
  • The term of the new RCF is four years, maturing in September 2021, representing an extension of the previous RCF which matures in March 2020.
  • The principal outstanding on the upsized RCF is repayable as a single bullet payment on the maturity date, compared to semi-annual reductions/repayments starting September 2018 for the 2015 RCF.
  • The new RCF can be repaid at any time without penalty, and offers Endeavour a corporate style covenant package, which enhances the flexibility to run its business from day-to-day.

Proceeds from the loan will be utilized to fund Endeavour's project pipeline, repay the existing RCF, and may be used for general corporate purposes. The enlarged bank syndicate includes Citibank, ING Bank, Investec and Société Générale as continuing lenders, and Barclays, HSBC and Macquarie as new lenders.

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