Horizon arranges US$30 million credit facility
Horizon Copper Corp. [HCU-TSXV, HNCUF] said it has strengthened its financing capacity by arranging a US$30 million revolving credit facility with an additional uncommitted accordion of up to US$20 million for total availability of US$50 million.
Those amounts are available under the terms of a revolving credit agreement with National Bank of Canada and the Bank of Nova Scotia. The company said it intends to use the revolving loan for future asset acquisitions, its funding requirements related to the Hod Maden copper-gold project in northeastern Turkey, and general corporate purposes.
Horizon shares were unchanged Wednesday at 60 cents. The share trade in a 52-week range of 94 cents and 52 cents.
Horizon Copper holds a portfolio of assets that includes a 1.66% net profits interest in the Antamina copper mine in Peru, exposure to the Oyu Tolgoi copper mine in Mongolia through a 24% equity ownership in Entrée Resources Ltd. [ETG-TSX, ERLFF-OTCQB], and a 30% interest in the Hod Maden project
Based on a feasibility study dated February 2021 and published by Horizon Copper, Hod Maden features a 13-year mine live averaging (on a 100% basis) approximately 195,000 ounces of gold equivalent production annually at a first quartile all-in-sustaining cost (AISC) of US$588 and ounce. The study indicates the project can generate US$164 million of annual free cash flow and a 36% after-tax internal rate of return (IRR) at a base case commodity price of US$1,599 per ounce of gold and US$3.19 per pound copper.
SSR Mining Inc. [SSRM-TSX, NASDAQ, SSR-ASX] announced the acquisition of operatorship and up to 40% ownership interest in the Hod Maden project back in May, 2023. The other partner in the project is private Turkish company Lidya Mines, which retains a 30% interest.
SSR said the $270 million deal included a $120 million upfront cash payment to acquire a 10% stake, followed by $150 million in earn-in structured milestone payments to acquire an additional 30%, payable between the start of construction and the firs anniversary of commercial production.
SSR has said it will spend the next 12 months updating the 2021 feasibility study for value enhancing opportunities, and will aim to advance the project to a full construction decision in 2024 with the goal of delivering first production in 2027.
Sandstorm Gold Ltd. [SSL-TSX, SSRM-NASDAQ American] has a gold stream on the Hod Maden project, allowing the company to purchase 20% of gold produced (on a 100% basis) for continuing payments at a price equal to 50% of the gold spot price until 405,000 ounces of gold are delivered. After the delivery threshold has been reached, the gold stream will entitle Sandstorm to purchase 12% of the gold produced for the life of the mine at a price equal to 60% of the gold spot price. Sandstorm also holds a 2.0% net smelter return royalty on Hod Maden.