Santa Fe Gold arranges $25 million loan, borrows first $10 million

By Angela McDaniels

Tacoma, Wash., Dec. 23 - Santa Fe Gold Corp. closed the first $10 million tranche of a $25 million senior secured gold stream credit agreement with Waterton Global Value, LP, according to a company news release.

The credit agreement provides for two $10 million tranches and a $5 million revolving working capital facility.

The long-term debt carries a 9% coupon and amortizes over a 30-month term, assuming both tranches are drawn. Santa Fe is not required to make any payments during an initial six-month grace period.

As part of the transaction, Santa Fe has agreed to sell to Waterton the gold and silver produced from the Summit mine and the Mogollon project via a long-term supply agreement.

Half of the first $10 million tranche was used to retire the company's 15% senior secured bridge loan with Victory Park Capital Advisors, LLC. The second $10 million tranche, which is subject to several funding conditions, will be used to fund the company's acquisition of Columbus Silver Corp.

Santa Fe Gold is based in Albuquerque. It mines for gold, silver, copper and industrial minerals.

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