TORONTO, ONTARIO--(Marketwired - Sep 16, 2013) - Lundin Mining Corporation (LUN.TO)(OMX:LUMI) ("Lundin Mining" or the "Company") today announced that it has executed a term sheet (the "Term Sheet") and secured commitments from a syndicate of lenders for a new term loan of $250 million (the "Term Loan") to be extended under an amendment to its existing credit agreement (the "Amended Credit Agreement"). The Amended Credit Agreement will also extend the maturity of the existing $350 million revolving credit facility (the "Revolving Facility") to four years from the date of closing of the amendment. The availability of the Term Loan and extension of the Revolving Facility is subject to the completion of the Amended Credit Agreement and other related definitive loan documentation on the terms and conditions set out in the Term Sheet.
The Term Loan and Revolving Facility are intended to provide the necessary funding to acquire and complete the construction of the Eagle Project located in the Upper Peninsula of Michigan, near the City of Marquette. The Company currently has $200 million drawn on the Revolving Facility which was used to pay a portion of the $315 million acquisition cost of the Eagle Project on July 17, 2013. Initial production is expected to commence in Q4 2014.
Under the terms agreed in the Term Sheet, the Company will achieve flexibility in the debt structure to allow for up to a maximum of $600 million of debt to be outstanding and repaid from cash flows as they become available. The terms provide for, among other things, LIBOR based interest rates on drawn funds from LIBOR+ 2.75% to LIBOR +3.75% depending upon the Company's leverage ratio. The repayments required under the Term Loan commence in March of 2016 and complete on the fourth anniversary of the agreement date. The Revolving Facility will mature four years from the closing date, with a bullet repayment of any drawn funds at maturity. Amounts may also be prepaid without penalty at any time.
Mrs. Marie Inkster, Senior Vice President and Chief Financial Officer, commented, "This arrangement is ideal for our Eagle Project needs. We are pleased that we will have the ability to draw on the funds only as they are required to manage our cost of capital, rather than having excess cash and high levels of debt sit on our balance sheet."
Lundin Mining currently has approximately $135 million of cash on hand. The Company expects to complete and execute the Amended Credit Agreement and related loan documentation within one month.
About Lundin Mining
Lundin Mining is a diversified base metals mining company with operations and projects in Portugal, Sweden, Spain and the U.S.A. producing copper, zinc, lead and nickel. In addition, Lundin Mining holds a 24% equity stake in the world-class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo and in the Freeport Cobalt Oy business, which includes a cobalt refinery located in Kokkola, Finland.
On Behalf of the Board,
Paul Conibear, CEO
Forward Looking Statements
Certain of the statements made and information contained herein is "forward-looking information" within the meaning of the Ontario Securities Act. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to foreign currency fluctuations; risks inherent in mining including environmental hazards, industrial accidents, unusual or unexpected geological formations, ground control problems and flooding; risks associated with the estimation of Mineral Resources and Reserves and the geology, grade and continuity of mineral deposits; the possibility that future exploration, development or mining results will not be consistent with the Company's expectations; the potential for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations; uncertain political and economic environments; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; and other risks and uncertainties, including those described under Risk Factors Relating to the Company's Business in the Company's Annual Information Form and in each management discussion and analysis. Forward-looking information is in addition based on various assumptions including, without limitation, the expectations and beliefs of management, the assumed long term price of copper, nickel, lead and zinc; that the Company can access financing, appropriate equipment and sufficient labour and that the political environment where the Company operates will continue to support the development and operation of mining projects. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements.