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Lydian arranges $50mln credit facility

Thursday, February 9, 2017 13:47
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Gold developer Lydian International Ltd. (TSX:LYD) wholly-owned Armenian operating subsidiary has entered into a secured credit facility with ING Bank NV for a maximum principal amount of up to $50mln.

Proceeds of the ING term facility will be used to purchase crushing, conveying and electrical equipment for Lydian’s 100%-owned Amulsar gold project in Armenia. Construction at Amulsar commenced in October, 2016. First gold production is expected during the first quarter of 2018.

“We are extremely pleased to have secured the remaining source of equipment financing needed for development of Amulsar and look forward to working with ING Bank. This $50-million facility completes our financing plan, which now totals $440-million from all sources,” said Howard Stevenson, Lydian’s president and chief executive officer.

The ING term facility is available to be drawn in multiple advances through April, 2018.

Each advance will be repayable over a 51-month term, beginning on the earlier of: (i) six months following final delivery of equipment to be financed using proceeds from the ING term facility, and (ii) Oct. 31, 2018.

The ING term facility bears an interest rate of the London interbank offered rate plus 2.95 per cent. Principal security consists of specific equipment financed by ING Bank, and a guarantee covering 85% of principal and interest under the ING term facility has been issued by the Swedish Export Credits Guarantee Board (EKN). The cost of the EKN guarantee shall be financeable using proceeds from the ING term facility. In addition, Lydian has provided an unsecured guarantee in favour of ING Bank. All advances under the ING term facility are subject to satisfaction of certain conditions.

Endeavour Financial is acting as financial adviser to Lydian.

The company has also amended the offtake agreement dated Nov. 30, 2015, among the company, its wholly owned Armenian operating subsidiary, Orion Co IV (SO) Ltd., and Resource Capital Fund VI LP. The amendment reflects a one-day reduction of Lydian’s opportunity to shorten the quotational period as a result of conditions that had effectively lapsed. The offtake agreement otherwise remains unamended.

Story by ProactiveInvestors


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