Guyana Goldfields restructures debt
VANCOUVER (miningweekly.com) – Midtier miner Guyana Goldfields has successfully refinanced its $160-million debt facility with a consortium of existing lenders comprising lead arrangers ING Capital and The Bank of Nova Scotia, and Export Development Canada.
The new $80-million facility will be repaid over 16 quarterly principal repayments of $5-million over a four-year period starting March 31, 2017.
The refinanced facility provides the company with increased financial flexibility as it removes various covenants and restrictions, including the release of $23-million of restricted funds held by the lenders in the overrun equity account, the elimination of cash sweeps, and a reduction of 1.3% in the interest rate. The facility will continue not to require gold hedging or other similar provisions.
Guyana Goldfields expects to book a one-time, noncash charge of $8-million to pay for deferred financing costs in the fourth quarter, which is expected to negatively affect earnings per share.
The company estimates annual cost savings of the new operating facility will amount to about $4.5-million a year over the course of the new facility.
With this transaction, the company will have successfully reduced its debt by 50% to $80-million over the course of 2016 and is expected to end the year with a cash balance of $64-million.
Guyana Goldfields expects to expand its flagship Aurora gold mine from 5 000 t/d to 8 000 t/d in 2017. An updated feasibility study that reflects the life-of-mine plan at this higher throughput rate is under way and is expected to be completed by the end of the year. The company has declared commercial production at its Aurora mine as of January 1, with construction completed below budget.
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