Sprott gets default notice on $45 million secured prepayment facility

By Devika Patel

Knoxville, Tenn., April 6 – Sprott Resource Holdings Inc. and subsidiary Minera Tres Valles received a notice of default from lenders Anglo American Marketing Ltd. and Kimura Capital LLP that the company and Minera are in default under Minera’s $45 million secured prepayment facility, according to a press release.

The lenders have chosen not to exercise their rights and remedies under the facility agreement at this time, but may choose to do so at any time in the future without any further written notice.

The company, Minera and lenders remain in a process of continuing dialogue to find a solution.

As previously reported, the companies negotiated the facility on Aug. 14, 2019 to be used for the expansion of Minera’s copper project in Chile.

The facility has a 12-month availability period and a term of four years.

Interest is Libor plus 800 basis points for up to 12 months, depending on some conditions, and Libor plus 625 bps onwards.

The facility is repayable in 12 equal quarterly installments starting the first month following the 12-month grace period starting on the closing date.

The facility has early repayment flexibility and a copper price participation mechanism if London Metal Exchange cash price monthly average is above $6,600 per month.

The lenders will have offtake rights to purchase up to 100% of copper cathode production at Minera Tres Valles.

Toronto-based Sprott acquires and grows a portfolio of cash-flowing businesses and businesses expected to cash flow in the natural resource sector. Minera Tres Valles is an operating mining complex located 300 kilometers northeast of Santiago, Chile in Region IV near the town of Salamanca.

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