Project loan facilities of $110m with Macquarie Bank Limited
Calidus secures A$110 million in debt financing for Warrawoona. (Credit: Gerd Altmann from Pixabay)
Calidus Resources Ltd (“Calidus” or “the Company”) (ASX: CAI) is pleased to announce it has executed a committed credit approved letter of offer from Macquarie Bank Limited for project loan facilities totalling $110 million, along with an associated gold hedging facility (“Debt Financing”) to fund the development of its 100% owned Warrawoona Gold Project in Western Australia.
- Project loan facilities of $110m with Macquarie Bank Limited (“Macquarie”)
- The selection of Macquarie as preferred debt provider delivers a debt financing package with low overall cost, reasonable covenants, ability to distribute and use free cash, low shareholder dilution and flexibility in relation to early repayment
- The debt financing package follows an extensive global tender and due diligence process on Calidus and the Warrawoona Gold Project
- The Company is on track for commencement of plant construction in Q1 2021
Binding terms for the debt financing were agreed following a strongly contested and rigorous global tender process culminating in final discussions with shortlisted potential financiers who presented very competitive terms. These parties undertook an extensive technical due diligence process which provides strong validation of the technical aspects of the Warrawoona Project.
Whilst the full terms of the facilities are confidential, the key points are:
- Project loan facilities (“Facility”) of $110m
- Competitive margin above BBSY (pre-completion and post-completion)
- Loan covenants customary for a facility of this type and reflect the competitive nature of the current bank market
- 25 year tenor from commencement of repayments in June 2022
- The Facility can be repaid early at any time without restriction or financial penalty;
- Ability to distribute surplus operating cashflows (after debt service) from the project subject to certain conditions, providing ongoing funding which can be used at Calidus’ discretion
- Mandatory hedging of approximately 105,000oz with deliveries spread over the tenor of the facility – this hedging quantum is approx. 25% of forecast production over this period
- Security is provided via a fixed and floating charge over the assets of Keras (Pilbara) Gold Pty Ltd (a wholly owned subsidiary)
- Corporate guarantee provided by Calidus until the achievement of Project Completion secured by the shares held in Keras (Pilbara) Gold Pty Ltd
- The Facility is drawn down in stages with interest payable on the amounts drawn and a competitive undrawn line fee payable on undrawn funds in the availability period
Completion of final Debt Financing agreements remains conditional upon documentation and other conditions precedent usual for financings of this nature. Subject to satisfaction of these remaining conditions, Calidus expects final agreements to be concluded early 2021.
Managing Director Dave Reeves said “This is a significant milestone for the project and the Company and allows the Company to commit to full development in the coming quarter. Macquarie have conducted extensive due diligence on Warrawoona and their agreement to provide the facility is a strong vote of confidence in the Project and Calidus, and we look forward to working with the team at Macquarie on completing all documentation and conditions precedent to drawdown.
With the access road, water bores and telecommunications now complete and the village install progressing on time and budget, we will now conclude all major contracts and final operating permits to allow for main project construction in the coming quarter.”
Argonaut is Calidus’ financial advisor in relation to the Debt Financing.
Source: Company Press Release