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Almonty Industries Inc. (TSXV:AII) announced that on December 31, 2015, it reached an agreement to expand its existing loan agreement by US$14 million.
Almonty Industries Inc. (TSXV:AII) announced that on December 31, 2015, it reached an agreement to expand its existing loan agreement by US$14 million.
As quoted in the press release:
The Company has entered into a long-term US$7.0 million working capital loan agreement (the “Working Capital Loan”) with UniCredit Bank AG (“UniCredit”), representing the first tranche of funds under the Support Agreement whereby Almonty will be able to draw down on the facility based on production and granting security over certain assets of the Company. The second tranche is expected to be available in March 2016 on similar terms. Principal and interest under the Working Capital Loan is due to UniCredit under a revolving facility based on production and APT pricing levels. Repayment of the Working Capital Loan will only begin when the price of APT exceeds US$254 MTU and accelerating in repayment at $320 MTU. The loan carries an interest rate of LIBOR plus 1.5%.
The release also states:
Almonty also announces that it issued a secured promissory note (the “Note”) for gross proceeds of US$1.0 million (the “Note Financing”). The Note was issued to Deutsche Rohstoff AG (“DRAG”), an existing shareholder of Almonty, and will mature on January 1, 2017, and bears interest at a rate of 6% per annum, payable at the maturity date. The Note is secured by the existing security granted to DRAG in connection with their existing $4 million debenture.
The Note Financing constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Shareholders in Special Transactions (“MI 61-101”). For this transaction, Almonty is relying on the exemption from the formal valuation requirements of MI 61-101 contained in section 5.5(b) of MI 61-101 and on the exemption from the minority shareholder approval requirements of MI 61-101 contained in Section 5.7(1)(a) of MI 61-101.
The Note Financing closed on January 4, 2016 and the Working Capital Loan also closed on January 4, 2016 with funding availability expected on January 6, 2016. Almonty intends to use the net proceeds of the Note Financing and the Working Capital Loan for general corporate purposes.
Lewis Black, CEO of Almonty, commented:
The expanded guarantee of up to US$14.0 million under the Support Agreement and the current availability of funds under the Working Capital Loan enables Almonty to access an additional US$7.0 million in working capital based on meeting certain production targets and grant of security and a further US$7.0 million in March 20016 on similar terms, and, combined with the Note Financing of US$1.0 million, will allow the Company to sustain its operations during this unprecedented period of low spot prices for APT and continue advancing our Valtreixal and Almonty Korea Tungsten projects. Furthermore, the increase to our credit line has a repayment structure linked to vastly improved APT prices ensuring significant relief of this debt service going forward.
Click here to read the full Almonty Industries Inc. (TSXV:AII) press release.