Horizon Copper Boosts Financing with New $30 Million Credit Plan

Author: Owen Jenkins Updated: 09-10-2024 04:43 PM

Horizon Copper Strengthens Financial Position

Horizon Copper Corp. is thrilled to announce a significant enhancement to its financing capabilities by entering a new revolving credit agreement. This robust agreement enables Horizon to borrow up to US$30 million, with an impressive accordion feature that offers an additional US$20 million in borrowing capacity. This brings total potential borrowing to a remarkable US$50 million.

Details of the Revolving Credit Agreement

The agreement, secured with National Bank of Canada and The Bank of Nova Scotia, comes with a four-year term set to mature in September 2028. This substantial loan structure is extendable, pending lender approvals. Horizon plans to strategically utilize these funds for forthcoming asset acquisitions, support the development of the Hod Maden project, and cover various corporate needs.

Understanding the Financial Dynamics

Interest rates on the amounts drawn from the Revolving Loan will hinge on the SOFR, supplemented by a variable spread ranging from 2.50% to 3.75%. It is essential to note that the undrawn portion will incur a standby fee of 0.56% to 0.84% annually, based on the company's leverage ratio. To maintain favorable terms, Horizon is mandated to uphold a leverage ratio of under 4.0x, excluding all debt from its growth partner, Sandstorm Gold Ltd.

Comments from Leadership

Horizon’s President and CEO, Erfan Kazemi, expressed his satisfaction regarding this new financing capability. He remarked, "We are pleased to expand our financing capabilities with this new Revolving Loan. This credit facility, along with our cash reserves, enhances our financial flexibility as we aim to grow the Company and continue investing in Hod Maden's development.”

Horizon Copper's Position in the Market

With a dedicated focus on copper assets, Horizon Copper is positioning itself as a key player in the industry. The company holds a 1.66% net profits interest in the prominent Antamina copper mine and boasts a 24% equity ownership in Entrée Resources Ltd., which is associated with the Oyu Tolgoi copper mine. Furthermore, Horizon has a substantial 30% interest in the promising copper-gold Hod Maden project, highlighting its strategic growth efforts.

Future Strategies and Outlook

Looking ahead, Horizon aims to broaden its portfolio, concentrating on valuable copper projects to satisfy the rising demand for this essential metal. As electric vehicles and renewable technologies continue to surge in popularity, the demand for copper is expected to intensify, presenting fantastic opportunities for Horizon to capitalize on its assets.

Frequently Asked Questions

What is the total borrowing capacity for Horizon Copper's new agreement?

The total borrowing capacity is US$50 million, which includes a Revolving Loan of US$30 million and an additional accordion feature of US$20 million.

Who are the lenders involved in Horizon Copper's credit agreement?

The lenders involved in this credit agreement are National Bank of Canada and The Bank of Nova Scotia.

How does Horizon Copper plan to use the funds?

Horizon intends to use the funds for future asset acquisitions, supporting the development of the Hod Maden project, and general corporate purposes.

What financial ratios must Horizon maintain under the new agreement?

Horizon is required to maintain a leverage ratio of less than 4.0x, excluding debt held by its strategic partner.

What does the future hold for Horizon Copper?

Horizon aims to expand its portfolio and focus on copper projects, capitalizing on increasing demand in various industries such as electric vehicles.

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