VANCOUVER (miningweekly.com) – Intermediate Canadian mine Detour Gold has secured a $500-million senior secured credit facility with its existing bank group, the company announced on Tuesday.
The debt facility comprises a four-year $300-million revolving credit facility and a $200-million term loan over three years. The bank facility will replace the company's current C$135-million senior secured credit facility upon closing, which is expected to take place later this week.
Detour advised that it would use the bank facility to repay the remaining balance of $320.5-million convertible notes maturing on November 30, for financial assurance and for general corporate purposes.
The company intends to fully draw down the amount of the term loan, a portion of the revolving credit facility, and to use about $30-million of its cash to repay the notes. These funds will be placed on deposit with the note trustee and the holders of the notes will be paid at the maturity date.
The bank facility includes two financial covenants regarding Detour’s net debt-to-Ebitda (earnings before interest, taxes, depreciation and amortisation) ratio and an interest coverage covenant. The interest rate for drawn borrowings is based on the leverage ratio and ranges from the London interbank offered rate plus 2.125% to 3.125%. Based on the company's most recent leverage ratio, Detour would be paying interest at the lower end of the range.
The co-lead arrangers and joint book runners are BMO Capital Markets, Canadian Imperial Bank of Commerce, Commonwealth Bank of Australia, Royal Bank of Canada and TD Securities. Bank of Montreal is the administrative agent.
Detour owns and operates the Detour Lake mine, a long-life large-scale openpit operation, in Northern Ontario.
Edited by: Samantha Herbst
Creamer Media Deputy Editor
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