Alexco Resource Corp. (TSX: AXR; NYSE American: AXU) has secured a US $15 million credit facility with Sprott Private Resource Lending (Collector), L.P. to be used for the development of the Keno Hill Silver projects in Yukon.
Alexco Resource owns the Keno Hill Silver District in Canada’s Yukon Territory which historically, is one of the highest-grade silver districts in the world having produced more than 214 million ounces of silver at an average grade of approximately 1,373 grams per tonne (g/t) silver (44 ounces per tonne (oz/t)) during the early and mid-1900’s.
Managed by Sprott Resource Lending Corp., Sprott Private Resource Lending LP is a US $560 million 2015-vintage fund.
photo credit: Alexo Resource
Alexco Establishes US$15 Million Credit Facility
February 26, 2018 – Alexco Resource Corp. (NYSE American: AXU, TSX: AXR) (“Alexco” or the “Company”) is pleased to announce that it has entered into a definitive credit agreement with Sprott Private Resource Lending (Collector), L.P. (“Sprott”) to provide a US$15 million (“M”) credit facility (the “Credit Facility”) to be used for the development of the Keno Hill Silver projects (“Project”) located in Yukon, Canada.
Clynt Nauman, Alexco CEO and Chairman commented, “With the Credit Facility established, Alexco continues underground development of the Bermingham and Flame & Moth deposits as well as refurbishment of the district mill at Keno Hill, confident that funds are available to fulfill our goal of near-term production. The Credit Facility carries a total interest charge of approximately 8.5% on funds drawn down, has no minimum drawdown requirement and does not carry a stand-by charge. The Credit Facility is essentially a back-stop allowing the Company to manage project risk while minimizing dilution to our shareholders.”
Narinder Nagra, Managing Partner of Sprott, commented, “As one of the largest investors dedicated to the natural resource sector, Sprott is excited to partner with Alexco on the restart of the Project. Our partnership with the Alexco team is consistent with our strategy of providing innovative and flexible capital to maximize the value of exceptional projects.”
Key Terms of the Credit Facility
Term of 3 years, Maturity Date – February 23, 2021
Interest rate on funds drawn down: the greater of
o 7% plus US Dollar 3 month LIBOR and
o 8% per annum, payable monthly
Repayable in quarterly installments from October 31, 2019 through to the Maturity Date
Upon draw down of funds a 3% charge of the draw down is charged
1,000,000 share purchase warrants were issued to Sprott with a five-year term, an exercise price of Cdn$2.25 per share and a right by the Company to accelerate the expiry date to 30 days following the closing price of the shares exceeding Cdn$5.63 for more than 20 consecutive trading days
Repayable in whole or in part, without penalty, provided not less than twelve (12) months of interest has been paid on any outstanding amount
The Company has the option to extend the availability period of draw down from twelve (12) to eighteen (18) months by issuing to Sprott 171,480 Alexco common shares
Alexco owns 100% of the high-grade Keno Hill Silver District (“KHSD”) in Canada’s Yukon. Alexco published an updated Preliminary Economic Assessment in March 2017 which anticipates the sequential development of four high grade silver deposits over an eight year mine life to produce more than a million tonnes with an average grade of 843 grams per tonne, 3.3% lead and 4.6% zinc. Silver production is anticipated to be approximately 3.5 million ounces per year. (Please see the news release dated March 29, 2017 entitled “Alexco and silver Wheaton Amend Silver Purchase Agreement and Alexco Announces Positive Preliminary Economic Assessment for Expanded Silver Production at Keno Hill.”)
Employing a unique business model, Alexco also provides mine-related environmental services, remediation technologies and reclamation and mine closure services to both government and industry clients.
Clynton R. Nauman, Chairman and Chief Executive Officer
Lisa May, Director of Investor Relations
Phone: (778) 945-6577
Please visit the Alexco website at www.alexcoresource.com