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Aya Gold & Silver secure financing for Moroccan mine expansion

Published by , Editorial Assistant
Global Mining Review,

Aya Gold & Silver Inc. has announced that it has closed the US$100 million project financing facility to support construction of the Zgounder Silver Mine expansion in the Kingdom of Morocco.

As announced in the news release dated 25 October 2022, the facility consists of a US$92 million loan provided by the European Bank for Reconstruction and Development (EBRD) and a US$8 million tranche (pari-passu with the EBRD) by the climate investment funds through its clean technology fund (CTF).

Key terms of the loan agreement remain unchanged and include:

  • US$92 million loan provided by EBRD.
  • US$8 million loan provided by CTF. Interest rate is equal to the all-in rate at the time of signing reduced following achievement of three milestones:
    • Milestone 1: Task force on climate-related financial disclosures (TCFD) report disclosed by end of 2023 will result in a 25% rate reduction.
    • Milestone 2: Completion of certain capital expenditure set out in the TCFD report and in the development plan by end of 2024 will result in a 50% rate reduction.
    • Milestone 3: Reaching “advanced” maturity on the TCFD’s climate governance and strategy recommendation will result in reduction of interest to an all-in rate of 1.00%.
  • 6-year maturity.
    • 2-year principal grace period.
    • 24-month availability period.
  • 6-month SOFR (0% floor) + 5.00%.
    • CTF tranche can reduce to all-in rate of 1.00% following certain actions.
    • Interest and capital paid twice yearly.
    • Commitment fee representing 30% of margin for undrawn amounts during the availability period.
  • Cost overrun account of US$18 million funded prior to first drawdown, debt service reserve account of US$16.3 million funded at the end of the grace period.
  • Drawdowns available upon satisfaction of certain customary conditions precedent.
  • No mandatory silver hedging, off-takes, production-linked payments or equity issuances as part of its structure.

Benoit La Salle, President and CEO said:

“This project financing, along with the recently completed and very successful equity offering, corroborates our positive view on Morocco and provides Aya financial flexibility as we continue with the Zgounder silver mine expansion.”

“For this, we would like to thank our funding partners, who have worked diligently to close this facility, and we look forward to delivering value for all stakeholders and achieving the operational and ESG milestones set out by this partnership.”

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