Sprott Resource Holdings Inc. Closes US$45 Million Financing Package for its Minera Tres Valles Mining Operation
Sprott Resource Holdings Inc. Closes US$45 Million Financing Package for its
Minera Tres Valles Mining Operation
TORONTO, Dec. 19, 2019 -- Sprott Resource Holdings Inc. (“ SRHI” or the “Company”) (TSX: SRHI) today announced that it
has closed the previously announced secured prepayment facility (“Facility”) provided to Minera Tres Valles (“MTV”) by Anglo
American Marketing Limited (“ AAML”) and a fund under the investment management of Kimura Capital LLP (“ Kimura” and
together with AAML, the “ Lenders”) and the funds have been received to be utilized for the expansion of the MTV copper
project located in Chile.
Key Terms of the Facility and Offtake
• US$45 million in principal with a 12-month availability period
• Term of 4 years
• Interest rate of 3-month USD LIBOR plus:
- 8.00% per annum for up to 12 months depending on certain conditions
- 6.25% per annum thereafter
• Repayable in 12 equal quarterly installments commencing following a 12-month grace period
• Early repayment flexibility
• Copper price participation mechanism if LME cash price monthly average is above US$6,600/mt
• The Lenders will have offtake rights to purchase up to 100% of copper cathode production at MTV
• When market conditions permit, MTV will enter into a contract to sell 25% of copper production during the subsequent
two years at a price of US$6,300/mt
A portion of the Facility was used to repay MTV’s US$20 million existing debt with Kimura.
About MTV
MTV is a fully permitted operating mining complex located nine kilometers from Salamanca in Region IV of Chile. MTV
comprises two main deposits: Papomono (underground) and Don Gabriel (open pit). The mine is currently operating and
producing high grade copper cathode. The mine has significant infrastructure in place with a crushing and processing plant
with nameplate capacity of 7,000 and 6,000 tonnes per day, respectively. The plant is designed to produce up to 18,500
tonnes per annum of copper cathodes. For more information about MTV, please visit http://www.mineratresvalles.com.
About Sprott Resource Holdings Inc.
SRHI acquires and grows a portfolio of cash-flowing businesses and businesses expected to cash flow in the natural resource
sector. Based in Toronto, SRHI is part of the Sprott Group of Companies and seeks to deploy capital to provide our investors
with exposure to attractive commodities. For more information about SRHI, please visit www.sprottresource.com.
About Anglo American
Anglo American is a leading global mining company whose products are the essential ingredients in almost every aspect of
modern life. Its portfolio of world-class competitive mining operations and undeveloped resources provides the metals and
minerals that enable a cleaner, more electrified world and that meet the fast growing consumer-driven demands of the world’s
developed and maturing economies. With people at the heart of its business, Anglo American uses innovative practices and
the latest technologies to discover new resources and mine, process, move and market its products to customers around the
world – safely, responsibly and sustainably.
About Kimura
Kimura Capital is a UK based investment Manager specialising in the global Commodity Trade Finance business. Kimura
specialize in providing tailor-made financing solutions for small to medium commodity producers. Kimura can look at
transactions across the globe in the agriculture, metals and energy sectors and have assembled an experienced team of
commodity professionals.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this news release, contain forward-looking information (collectively referred to herein as the "Forward-
Looking Statements") within the meaning of applicable Canadian securities laws, including statements pertaining to: the
availability and use of funds from the Facility; the expansion of the MTV copper project; future production of copper cathodes;
and expectations for cash flow generation.
Although SRHI believes that the Forward-Looking Statements are reasonable, they are not guarantees of future results,
performance or achievements. A number of factors or assumptions have been used to develop the Forward-Looking
Statements, there being no significant disruptions affecting the development and operation of MTV; the availability of certain
consumables and services and the prices for power, acid and other key supplies being approximately consistent with
assumptions in the Technical Studies; labour and materials costs being approximately consistent with assumptions in the
Technical Studies; fixed operating costs being approximately consistent with assumptions in the Technical Studies; the
availability of financing for MTV’s planned development activities; assumptions made in mineral resource and mineral reserve
estimates and the financial analysis based on the mineral reserve estimate and in the case of the PEA, the mineral resource
estimate, including (as applicable), but not limited to, geological interpretation, grades, commodity price assumptions,
metallurgical performance, extraction and mining recovery rates, hydrological and hydrogeological assumptions, capital and
operating cost estimates, and general marketing, political, business and economic conditions.
Actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking
Statements should assumptions underlying the Forward-Looking Statements prove incorrect or should one or more risks or
other factors materialize, including: (i) possible variations in grade or recovery rates; (ii) copper price fluctuations and
uncertainties; (iii) delays in obtaining governmental approvals or financing; (iv) risks associated with the mining industry in
general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to
exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to mineral
reserves, production, costs and expenses; and labour, health, safety and environmental risks) and risks associated with the
other portfolio companies' industries; (v) performance of the counterparties; (vi) risks associated with investments in emerging
markets; (vii) general economic, market and business conditions; (viii) market volatility that would affect the ability to enter or
exit investments; (ix) failure to secure financing in the future on terms acceptable to the Company, if at all; (x) commodity
price fluctuations and uncertainties; (xi) those risks disclosed under the heading "Risk Management" in SRHI’s Management’s
Discussion and Analysis for the three-months ended September 30, 2019; and (xii)] those risks disclosed under the heading
"Risk Factors" or incorporated by reference into SRHI’s Annual Information Form dated March 6, 2019. The Forward-Looking
Statements speak only as of the date hereof, unless otherwise specifically noted, and SRHI does not assume any obligation
to publicly update any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except
as may be expressly required by applicable Canadian securities laws.
Investor contact information:
Michael Harrison
Interim CEO and Director
(416) 543-8487