Torex Gold Resources secures US $400M debt facility

pcNewsWireTorex Gold Resources Inc. (TSX: TXG) has signed a binding commitment letter by its wholly-owned subsidiary Minera Media Luna, S.A. de C.V. with BNP Paribas Securities Corp., Commonwealth Bank of Australia, ING Capital LLC and Société Générale in connection with a secured US $400 million debt facility

News Release


TORONTO, Ontario, June 1, 2017 — Torex Gold Resources Inc. (the “Company” or “Torex”) (TSX:TXG) is pleased to announce the signing of a binding commitment letter (the “Commitment Letter”) by its wholly-owned subsidiary Minera Media Luna, S.A. de C.V. with BNP Paribas Securities Corp., Commonwealth Bank of Australia, ING Capital LLC and Société Générale (the “Joint Bookrunners”) in connection with a secured US$400 million debt
facility (the “Loan Facility”). Upon execution of definitive documents, the Loan Facility will be available by way of a US$300 million term loan (the “Term Facility”) and a US$100 million revolving loan facility (the “Revolving Facility”). The Loan Facility will be used (i) to refinance the existing project finance facility (the “Project Finance Facility”) that was previously entered into with the Joint Bookrunners and certain other lenders, for the construction of the El Limon-Guajes Mine (“ELG”) located in southwest Mexico and (ii) for general corporate purposes. The Revolving Facility and the Term Facility will mature June 30, 2020 and June 30, 2022, respectively.

Fred Stanford, President and CEO of Torex said: “The Project Finance Facility was an excellent financing product for the construction of ELG, our first mine. A very productive relationship was established with the Joint Bookrunners through the process of developing ELG. Torex has received a number of financing proposals across products, and the Loan Facility to be provided by the Joint Bookrunners represents an optimal, flexible and cost effective financing option for the Company, with materially reduced administrative effort, which will provide more management time for optimizing operations and future developments. We look forward to continuing that relationship with the Joint Bookrunners as we transition to the next phase of the Company’s growth. He added, “Dawson Proudfoot, our Vice President, Engineering, is now reviewing bids for the Media Luna infill drilling that will inform a feasibility study, and he has started to hire a feasibility study team. One of the first products of the new study team will be an updated PEA that will incorporate the optimization of the mine design that has been developed over the past 18 months. We all look forward to getting on with the second stage of our strategy – Build a second mine on the same property. Media Luna has the potential to be another low cost, long life, minimal environmental impact mine in the Torex portfolio. Part two for Torex, has the potential to be every bit as productive and rewarding as part one has been.”

The Loan Facility will remove various covenants and restrictions imposed under the Project Finance Facility, including the requirement for mandatory hedging, the final completion test, and will reduce certain restrictions on cash. The mandatory sweeps will also be removed subject to reinstatement, to an aggregate of US$50 million, if the ELG does not meet certain projected operating and economic performance parameters by December 31, 2018. The Loan Facility will provide for a revised repayment schedule for the Term Facility and will contemplate, as part of the permitted payments, potential spending from ELG cash flow to facilitate the development of the Company’s Media Luna Project and the Sub-Sill, subject to satisfaction of the terms of the Loan Facility, including compliance with financial covenants.

The Commitment Letter provides that the Loan Facility will bear interest at a rate of LIBOR + 4% for the first two years, Libor + 4.25% for years three and four, and Libor + 4.5% thereafter and includes standard and customary finance terms and conditions including with respect to fees, representations, warranties, covenants and conditions precedent to closing. Final approvals are subject to the completion of definitive loan and security documentation and customary due diligence.

Torex Gold Resources Inc.
Corporate Office: 130 King St. West, Suite 740, Toronto, ON M5X 2A2, Canada – Tel. (647) 260 1500 Fax (416) 304-4000

Torex is an emerging intermediate gold producer based in Canada, engaged in the exploration, development and operation of its 100% owned Morelos Gold Property, an area of 29,000 hectares in the highly prospective Guerrero Gold Belt located 180 kilometers southwest of Mexico City. Within this property, Torex has the El Limón-Guajes Mine, which announced commercial production in March of 2016 and the Media Luna Project, which is an early stage development project, and for which the Company issued a preliminary economic assessment (PEA) in 2015. The property remains 75% unexplored.

For further information, please contact:

Fred Stanford
President and CEO
Tel. (647) 260-1502

Gabriela Sanchez
Vice President Investor Relations
Tel. (647) 260-1503

SOURCE: Torex Gold Resources Inc.