DEBT

9 Months Ended

Sep. 30, 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 loan 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 due beginning on August 31, 2022 and continuing for 11 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 and until the end of 2021. The working capital requirement increases to $5.0 million at March 31, 2022, $7.0 million at June 30, 2022, and $10 million at September 30, 2022 and each fiscal quarter thereafter.

● The Company issued 2,091,700 shares of common stock 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 are being amortized over the modified term of the loan.

The remaining principal terms of the original agreement remain unchanged. The Company was in compliance with all covenants as at September 30, 2021.

A reconciliation of the Company’s long-term debt for the nine months ended September 30, 2021 and for the year ended December 31, 2020 is as follows:

	Nine months ended September 30, 2021		Year ended December 31, 2020
Balance, beginning of period	$	48,160	$	49,516
Interest expense		4,166		5,394
Interest payments		(3,646)		(4,875)
Balance, end of period	$	48,680	$	48,160
Less current portion		4,000		—
Long-term portion	$	44,680	$	48,160