First Majestic Silver Strengthens Balance Sheet with Credit Facility

First Majestic Silver Corp. (TSX:FR,NYSE:AG) announced that it’s entered into an agreement for a senior secured credit facility with The Bank of Nova Scotia and Investec Bank plc. The facility is made up of a $25-million revolving credit line and a $35-million term loan.
As quoted in the press release:

The proceeds of the Facility are being used to settle the Company’s existing lead and zinc prepayment facility with Bank of America Merrill Lynch (“BAML”) and to replace the $15 million revolving credit line the Company assumed when it acquired SilverCrest Mines (the “SilverCrest Credit Line”).
Effective with this transaction, the Company has eliminated its base metal hedge with a mark to market gain of $5.0 million. The Company is settling the BAML prepayment facility debt with a cash payment of $31.5 million from proceeds of the $35 million term loan. The remaining $3.5 million net of transaction fees is added to the Company’s treasury for general and administrative purposes. The SilverCrest Credit Line was due to be repaid no later than June 30, 2016. Effective with the new Facility, the repayment of the credit line has been deferred to February 2019, and an additional $10 million has been added to establish a $25 million revolving credit line for the Company.

Keith Neumeyer, president and CEO of First Majestic, commented:

The announcement of today’s debt restructuring, along with the decision to lock in our $5.0 million gain on our BAML lead and zinc hedge, and to push out the settlement of the revolving credit line by three years, immediately improves the Company’s working capital position and provides significant financial flexibility to continue pursuing our corporate objectives. Our strengthened balance sheet and diverse portfolio of producing silver mines provides us with the opportunity to access funds at a low cost of capital.

Click here to read the full First Majestic Silver Corp. (TSX:FR,NYSE:AG) press release.