Sierra Metals refinances some principal payments due 2023

By Marisa Wong

Los Angeles, May 30 – Sierra Metals Inc. announced it finalized the definitive agreement with its lenders Banco de Credito del Peru and Banco Santander SA to refinance $18.75 million out of the $25 million principal debt repayment obligations that were originally due in 2023 under its senior secured credit facility.

The $18.75 million will be due in March 2025. Interest will accrue at an annualized rate of SOFR plus 630 basis points.

In addition, the remaining $6.25 million of the amount due in 2023, which is not covered as part of the refinancing, will be split into three equal installments due in June, September and December 2023.

“This refinancing is an important step in the company’s return to sustainable, long-term growth,” Ernesto Balarezo, Sierra’s interim chief executive officer, said in a press release.

“The updated repayment schedule provides flexibility as we continue to execute on our plan to optimize operations, grow the resources at our core mines and increase production.”

In addition to the refinancing of the principal debt repayment obligations for 2023, the agreement contains some additional amendments to the terms of the senior secured credit facility, including covenants regarding executive management continuity and mandatory prepayments in the case of excess free cash flow and equity subscription proceeds not required for capital expenditures.

The original credit facility was a $100 million six-year loan dated March 8, 2019. The facility came with a principal repayment grace period of two years and a principal repayment period of four years.

Sierra Metals is a Toronto-based diversified mining company with green metal exposure including copper, zinc and lead production with precious metals byproduct credits, focused on the production and development of its mines in Peru and Mexico.

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