Hecla Mining enters $200 million replacement revolver due 2022

By Marisa Wong

Morgantown, W.Va., July 17 – Hecla Mining Co. entered into a fifth amended and restated credit agreement on July 16 with Bank of Nova Scotia as administrative agent for a $200 million senior secured revolving facility, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement amends and restates the company’s fourth amended and restated credit agreement dated May 20, 2016 by increasing the amount of funds available, extending the term by two years and restricting the company’s ability to incur additional debt, make dividends and make investments in parties that are not borrowers or guarantors under the credit agreement.

The replacement revolver will be increased to $250 million once the company meets some conditions, including closing its pending acquisition of Klondex Mines Ltd., adding some subsidiaries of Klondex Mines as borrowers under the credit agreement and pledging the assets of those subsidiaries as additional collateral under the credit agreement.

The company will borrow $47 million under the revolver to finance a portion of the cost of the Klondex acquisition.

The revolving loans will have a maturity date of June 14, 2022. However, if the company does not refinance its outstanding senior notes due May 1, 2021 by Nov. 1, 2020, the revolving loans will instead mature on Nov. 1, 2020.

The interest rate is Libor plus 225 basis points to 325 bps, depending on the company’s leverage ratio.

The company is also required to pay a standby fee on undrawn amounts of 50 bps; a participation fee for letters of credit issued under the credit agreement ranging from 225 bps to 325 bps based on the total leverage ratio; as well as a fronting fee of 20 bps to each issuing bank.

Hecla is a Coeur d’Alene, Idaho-based silver producer with operating mines in Alaska, Idaho and Mexico and is a growing gold producer with an operating mine in Quebec.

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