LONG-TERM DEBT

12 Months Ended

Dec. 31, 2023

LONG-TERM DEBT

LONG-TERM DEBT

NOTE 11 LONG-TERM DEBT

On August 10, 2018, the Company finalized a $50.0 million senior secured three-year term loan. 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 $50.0 million loan and revised the required scheduled repayments and working capital maintenance requirements, in addition to the following:

● The Company issued 209,170 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.

● Sprott Private Resource Lending II (Collector), LP (“Sprott”) replaced Royal Capital Management Corp. as the administrative agent and lender. An affiliate of Robert R. McEwen remained as a lender. The remaining principal terms of the original agreement remained unchanged.

On March 31, 2022, further amendments were made to the ARCA which refinanced the outstanding $50.0 million loan and revised the required scheduled repayments and working capital maintenance requirements, in addition to the following:

● The Company issued shares of common stock valued at $0.5 million to the unaffiliated lender 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.

On March 31, 2022, the Company issued a $15.0 million unsecured subordinated promissory note to a company controlled by Robert R. McEwen, the Chairman and Chief Executive Officer of the Company (“Promissory Note”). The Promissory Note was payable in full on or before September 25, 2025, interest was payable monthly at a rate of 8% per annum. The promissory note was subordinated to the ARCA facility.

On May 19, 2023, the Company repaid outstanding amounts to Sprott of $25.0 million in principal. Subsequently, further amendments were made to the ARCA effective May 23, 2023, which included the following revisions:

● Sprott was removed as the administrative agent and lender. An affiliate of Robert R. McEwen remained as a lender and replaced Sprott as the administrative agent.

● An affiliate of Robert R. McEwen added the $15.0 million outstanding under its unsecured promissory note with the Company dated March 31, 2022, as an advance under the ARCA, forming a loan of $40.0 million with interest payable monthly at a rate of 9.75% per annum. Concurrently, the unsecured promissory note was cancelled.

● Scheduled repayments of principal under the ARCA were extended by 18 months compared with the Second Amended and Restated Credit Agreement. Monthly repayments of principal in the amount of $1.0 million are due beginning on January 31, 2025, and will continue for 18 months, followed by a final principal payment of $21.0 million and any accrued interest on August 31, 2026. The remaining principal terms of the original agreement remained unchanged.

A reconciliation of the Company’s long-term debt for the years ended December 31, 2023, and 2022 is as follows:

		Year ended		Year ended
		December 31, 2023		December 31, 2022
Balance, beginning of year	$	63,979	$	48,866
Promissory note - initial recognition		—		15,000
Principal repayment on debt		(25,000)		—
Interest expense		5,749		5,488
Interest payments		(4,728)		(4,875)
Bonus interest-equity-based financing fee		—		(500)
Balance, end of year	$	40,000	$	63,979
Less: current portion		—		10,000
Long-term portion	$	40,000	$	53,979