DEBT

3 Months Ended

Mar. 31, 2021

DEBT

DEBT

NOTE 10 DEBT

On August 10, 2018, the Company finalized a $50.0 million senior secured three-year term loan facility with Royal Capital Management Corp., as administrative agent, and the lenders party thereto.  Interest on the loan accrued at the rate of 9.75% per annum with interest due monthly and was secured by a lien on certain of the Company’s and its subsidiaries’ assets.  

On June 25, 2020, the Company entered into an Amended and Restated Credit Agreement (“ARCA”) which refinanced the outstanding $50 million and which terms differed in material respects from the old loan as follows:

● Sprott Private Resource Lending II (Collector), LP replaced Royal Capital Management Corp. as the administrative agent.

● Sprott Private Resource Lending II (Collector), LP replaced certain lenders. An affiliate of Robert McEwen remains as a lender.

● Scheduled repayments of the principal were extended by two years; monthly repayments of principal in the amount of $2.0 million are now due beginning on August 31, 2022 and continuing for 12 months, followed by a final principal payment of $26.0 million, and any accrued interest on August 31, 2023.

● The minimum working capital maintenance requirement was reduced from $10.0 million under the original term loan to $nil at June 30, 2020 to December 31, 2020 and from $10.0 million to $2.5 million at March 31, 2021 to the end of 2021. The working capital requirement increases to $5.0 million for March 31, 2022, $7.0 million for June 30, 2022, and $10 million for September 30, 2022 and thereafter.

● The Company issued 2,091,700 shares valued at $1,875,000 to the lenders as consideration for the maintenance, continuation, and extension of the maturity date of the loan. The value of the shares plus the unamortized costs of the original term loan will be amortized over the modified term of the loan.

The remaining principal terms of the original agreement remain unchanged. The Company was in compliance with the minimum working capital maintenance requirement as at March 31, 2021.

A reconciliation of the Company’s long-term debt for the three months ended March 31, 2021 and for the year ended December 31, 2020 is as follows:

	Three months ended March 31, 2021		Year ended December 31, 2020
Balance, beginning of year	$	48,160	$	49,516
Interest expense		1,368		5,394
Interest payments		(1,202)		(4,875)
Bonus Interest - Equity based financing fee		—		(1,875)
Balance, end of year	$	48,326	$	48,160
Less current portion		—		—
Long-term portion	$	48,326	$	48,160