LONG-TERM DEBT

12 Months Ended

Dec. 31, 2024

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, and 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 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.

Subsequent to year-end, on January 31, 2025, further amendments were made to the ARCA, which refinanced the outstanding $40.0 million loan and included the following revisions:

● Scheduled repayments of principal under the ARCA were extended by 24 months. Monthly repayments of principal in the amount of $1.0 million are due beginning on January 31, 2027, with the remaining outstanding principal repayment on August 31, 2028.

● The Company is required to issue shares of common stock with a value equivalent to 2% of the outstanding loan balance as at March 31, 2025 to an affiliate of Robert R. McEwen as consideration for the maintenance, continuation, and extension of the maturity date of the loan.

● The Company is permitted to incur up to $110.0 million in principal borrowings under unsecured convertible senior notes due 2030.

On February 11, 2025, subsequent to the amendment of the ARCA on January 31, 2025, the Company issued convertible debt with net proceeds of $110.0 million. Refer to Note 22. Subsequent Events for further information. The issuance of convertible debt supports the Company’s ability and intention to refinance current liabilities on a long-term basis as of year-end. The Company reclassified the $12.0 million current portion of long-term debt to non-current liabilities as of December 31, 2024.

Following the issuance of convertible debt, on February 21, 2025, the Company voluntarily repaid $20.0 million in principal under the ARCA.

A reconciliation of the Company’s long-term debt for the years ended December 31, 2024 and 2023, is as follows:

	Year ended December 31,
	2024		2023
Balance, beginning of year	$	40,000	$	63,979
Principal repayment on debt		—		(25,000)
Interest expense		3,911		5,749
Interest payments		(3,911)		(4,728)
Balance, end of year	$	40,000	$	40,000
Less: current portion		—		—
Long-term portion	$	40,000	$	40,000