THE BOURSE WHISPERER: Dual-listed Troy Resources (ASX: TRY, TSX: TRY) has signed a Mandate Letter and Term Sheet with Investec Bank (Australia) for the provision of $40 million in loan facilities.
The Facilities consist of the following:
– A $20 Million Revolving Corporate Facility (RCF); and
– A $20 Million Revolving Acquisition Loan Facility (ALF).
Troy explained the RCF will have a term of three years and will provide funding for general corporate and working capital purposes.
The ALF will have a term of 18 months and will be used to assist with costs associated with the takeover of Azimuth Resources (ASX: AZH) and ongoing work associated with completing the prefeasibility study of Azimuth’s West Omai deposit.
Drawdown under the Facilities is subject to certain conditions precedent, with the RCF to be available following completion of documentation and the ALF following completion of the Company’s takeover offer for Azimuth.
As part consideration for the provision of the Facilities, subject to receipt of the approval from the Toronto Stock Exchange, Troy has agreed to grant just under 1.4 million call options over Troy ordinary shares to Investec to the value of $5 million with an exercise price of $3.67 and a three year term.
It is not the first time Investec has provided funding for Troy having stumped up $35 million in loan funding to assist with construction of the company’s Casposo project in 2010.
Project locations. Source: Company announcement
This loan was repaid ahead of schedule in October 2012, which was no doubt taken into consideration by Investec when signing the papers on this latest deal.
“We are very pleased to have agreed these facilities with Investec who have been supportive of the company through the provision of the $35 million facility to construct Casposo and of the company’s acquisition growth strategy,” Troy Resources managing director Paul Benson said in the company’s announcement to the Australian Securities Exchange.
“These new facilities will not only give Troy tremendous flexibility over the next few years, they provide a degree of comfort and certainty, which is invaluable in these volatile markets.
“In particular, the ALF is expected to allow us to accelerate activities at West Omai.
“It also puts us in a strong position to acquire second hand plant suitable for the mine’s development which is part of Troy’s successful strategy for minimising mine development capital.”