Note 9 - Credit Facilities and Capital Leases

3 Months Ended

Mar. 31, 2013

Debt Disclosure [Text Block]

Note 9.    Credit Facilities and Capital Leases

Credit Facilities

We have a $100 million senior secured revolving credit facility, which is collateralized by the shares of common stock held in our material domestic subsidiaries and by our joint venture interests in the Greens Creek mine, all of our rights and interests in the joint venture agreement, and all of our rights and interests in the assets of the joint venture.  This credit facility originated with a $60 million senior secured revolving credit agreement entered into in October 2009 that has been amended several times.  On April 1, 2013 we amended the agreement to reduce the commitment amount from $150 million to $100 million while also adjusting certain covenants and limitations.  Amounts borrowed under the credit agreement are available for general corporate purposes.  The interest rate on outstanding loans under the agreement is between 3.00% and 3.75% above the London Interbank Offered Rate or an alternative base rate plus an applicable margin of between 2.00% and 2.75%.  We are required to pay a standby fee of between 0.825% and 1.05% per annum on undrawn amounts under the revolving credit agreement.  The credit facility is effective until August 1, 2015. In the first three months of 2013, we incurred $0.1 million in interest expense for the amortization of loan origination fees and $0.3 million in interest expense for commitment fees relating to the credit agreement.  

The credit agreement includes various covenants and other limitations related to our various financial ratios and indebtedness and investments, as well as other information and reporting requirements, including the following limitations:

• Senior Leverage ratio (calculated as debt secured by liens divided by EBITDA) of not more than 2.50:1.

• Leverage ratio (calculated as total debt divided by EBITDA) of not more than 4.50:1 at all times prior to March 31, 2014, and not more than 4.00:1 at all times from and after March 31, 2014.

• Interest coverage ratio (calculated as EBITDA divided by interest expense) of not less than 3.0:1.

• Tangible net worth of greater than 80% of the Tangible Net Worth at completion of the acquisition of Aurizon, if consummated, plus 50% of positive quarterly Net Income thereafter.  (see Note 13 for more information on the acquisition of Aurizon).

We were in compliance with all covenants under the credit agreement as of March 31, 2013.  We have not drawn funds on the current revolving credit facility as of the filing date of this Form 10-Q.

Capital Leases

We have entered into various lease agreements for equipment at our Greens Creek and Lucky Friday units, which we have determined to be capital leases.  At March 31, 2013, the total liability balance associated with capital leases, including certain purchase option amounts, was $22.7 million, with $7.3 million of the liability classified as current and the remaining $15.4 million classified as non-current. At December 31, 2012, the total liability balance associated with capital leases was $17.5 million, with $5.6 million of the liability classified as current and $11.9 million classified as non-current. The total obligation for future minimum lease payments was $23.6 million at March 31, 2013, with $1.1 million attributed to interest.

At March 31, 2013, the annual maturities of capital lease commitments, including interest, are (in thousands):

Twelve-month period ending March 31,
2014	$	7,293
2015		7,392
2016		6,092
2017		2,851
2018		—
Total		23,628
Less:  imputed interest		(1,117	)
Net capital lease obligation	$	22,511