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Dynacor Closes $10MM Facility With Third Eye Capital

January 18, 2016, 07:51 AM
Filed Under: Metals and Mining

Dynacor Gold Mines has entered into senior secured credit facilities in the aggregate amount of up to $10 million with Third Eye Capital Corporation (TEC) acting as agent for the lenders. The new credit facilities consist of a $7 million U.S. drawdown term loan facility and a $3 million U.S. revolving facility.

The term loan facility shall have a term of up to thirty-six months and bear interest at a rate of 10% per annum. The revolving facility will have a term of twelve months from the closing date, which may be extended for up to two additional periods of twelve months, and will bear annual interest at a rate of 8.5% or Prime rate + 6% per annum, whichever is greater. The credit facilities can be reimbursed at any time without any penalties.

The credit facilities will be utilized for the purposes of funding the completion of a new gold ore processing mill currently under construction (70% complete as of December, 2015) in Chala, Peru, accretive growth in its ore-processing business and for working capital and general corporate purposes.

In conjunction with the loan, Dynacor has agreed to issue to TEC, for the ratable benefit of the lenders, 950,000 common share purchase warrants ("Warrants"), each Warrant being exercisable at a price of $1.83 CAD per common share of Dynacor and expiring on January 14, 2019. Dynacor may accelerate the expiry time of the Warrants if, at any time, the closing price of the common shares of Dynacor on the Toronto Stock Exchange is 15% or more above the exercise price for a period of twenty (20) consecutive trading days.

Obtaining favorable financing under present market conditions is a true testament to the validity of Dynacor's business model and its performance." said Leonard Teoli, Dynacor's Vice President and Chief Financial Officer. "The three-year credit facility, with advantageous repayment conditions, will give Dynacor the financial assurance, flexibility and means to quickly ramp up production at its new Veta Dorada Plant in Chala while minimizing shareholder dilution."

Dynacor is a gold ore-processing and exploration corporation active in Peru since 1996.

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