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BlackRock loans W Resources cash for La Parrilla restart
Tungsten, copper and gold exploration and development company W Resources has signed a credit and guaranty agreement, it announced on Friday, with lenders including funds managed by BlackRock Financial Management, to provide a $35m secured term loan facility to fund the La Parrilla mine development.
The AIM-traded firm said the first $13.125m was expected to be drawn this week after satisfaction of the conditions applicable to the funding, with the balance of $21.875m expected to be committed and funded in the second quarter of 2018, after the satisfaction of a number of conditions.
It said the loan was for a scheduled term of five years, with a two year non-call period.
The company had the right to repay the loan after two years for a premium of 5%, after three years for a premium of 3%, and after four years for no premium.
Subject to any early repayment permitted or required under the agreement, repayment would made by way of a cash flow sweep, utilising free cash to repay the loan.
The company said the loan was subject to an average five-year interest rate of 12.6%, being 14% in the first year, 13% in the second year and 12% thereafter.
First year interest would be payable in kind and added to the principal, while 50% of the second year interest would be payable in kind, and 50% payable in cash;
Lenders would receive a non-refundable upfront fee of 3% of the face value of each of the respective loan disbursements, as well as warrants totalling 5% of W's fully-diluted equity.
"We are delighted to have partnered with BlackRock to obtain this $35m secured term loan facility," said W Resources chairman Michael Masterman.
"The loan provides full funding for La Parrilla and now it is full steam ahead."
Masterman said engineering and planning at La Parrilla was at an advanced stage, and the three primary construction contracts had been awarded.
"As outlined, the timetable to deliver the project is 12 months from the close of financing which moves the company into production in the first quarter of 2019."
David Trucano, portfolio manager at the BlackRock Global Credit team, added that his organisation was "pleased" to provide funding on behalf of its clients to restart operations at La Parrilla.
"We believe the current dynamics of the tungsten market present a unique opportunity for W and our clients."