#Mining #Stock News: SilverCrest (TSX:
$SIL.TO; NYSE: $SILV) Announces US$120 Million Project Financing Facility and
US$76.5 Million Fixed Price EPC Contract for Construction of Process Plant; @SilverCrestMet
Vancouver, British Columbia - January 4, 2021
(Investorideas.com Newswire) In anticipation of making a final construction
decision based on a Feasibility Study ("Feasibility Study") for the
Las Chispas Project ("Las Chispas"), SilverCrest Metals Inc. (
TSX:
SIL.TO; NYSE
American: SILV) ("SilverCrest" or the
"Company") is pleased to announce that its Canadian subsidiary has
entered into a credit agreement (the "Credit Agreement") with an
affiliate of RK Mine Finance ("RK") to provide a secured project
financing facility (the "Facility") for a total of US$120 million for
the purpose of funding the construction of Las Chispas. Concurrently, one of
the Company's Mexican subsidiaries has entered into a fixed price Engineering,
Procurement and Construction contract (the "EPC Contract") with
Ausenco Engineering Canada Inc. ("Ausenco"), and one of its
affiliates, for construction of the Las Chispas process plant. While the
Feasibility Study is still pending finalization by Ausenco, with announcement
of results targeted for late January 2021, SilverCrest is confident entering
into the Credit Agreement and the EPC Contract based on the substantial
feasibility information currently available. However, in the absence of a
feasibility study of mineral reserves demonstrating economic and technical
viability, there is increased uncertainty and historically a higher economic and
technical risk of failure associated with the development of a commercially
mineable deposit until such time as the Feasibility Study has been completed.
See "EPC Contract and Feasibility Study" below.
Read this news featuring SILV in full at https://www.investorideas.com/CO/SILV/news/2021/01041Process-Plant.asp
Highlights:
Project Finance Facility
·
US$120 million Facility with a total cost of
capital of approximately 10% (refer to details below);
·
Facility does not require mandatory hedging, cash
sweeps, offtakes, production linked payments or equity issuances as part of its
structure;
·
US$30 million of the Facility has been drawn, and
subsequent drawdowns are available upon satisfaction of certain customary
conditions precedent. Drawdowns are not tied to any construction milestones;
·
Facility has a four-year term with a 20-month
availability period if 50% of the Facility is drawn or committed to be drawn
within six months (June 30, 2021) and 75% of the Facility is drawn within 12
months (December 31, 2021);
·
Up to US$30 million of the Facility can be used for
exploration and regional acquisitions; and
·
US$90 million remaining on the Facility, plus
estimated cash at year-end of US$135 million, will provide a substantial
component of funding for construction, exploration and regional growth
initiatives.
EPC Contract
·
Lump sum turnkey price of US$76.5 million will
include construction of a 1,250 tonne per day process plant at Las Chispas;
·
Execution of Ausenco's scope of work will begin in
February 2021, and commissioning of the process plant is targeted for Q2 2022,
with production ramp-up starting in Q3 2022;
·
The construction execution plan includes stringent
COVID-19 protocols including the use of a confined single room occupancy camp,
designed to limit the potential for a virus outbreak at the site and in the
local communities; and
·
The EPC Contract represents a portion of the total
scope of the planned construction but does not include development of the
underground mine, confined camp, powerline, dry stack tailings facility,
establishment of an analytical laboratory in the local community or the owner's
site costs.
N. Eric Fier, CPG, P.Eng and CEO, remarked,
"We are very pleased to have concurrently signed the Credit Agreement and
the EPC Contract with two well-established and respected partners in the mining
industry. The commitment by both partners ahead of the targeted January 2021
release of the Las Chispas Feasibility Study speaks to the strength of our team
and project. While we recognize the challenges of building during this
unprecedented time, we believe the strict and effective COVID-19 protocols that
we have implemented on site, which are highlighted in these two important
agreements, limit our risk. This news marks another important milestone on our
path to production at Las Chispas."
Pierre Beaudoin, COO, remarked, "We are
pleased to be working with Ausenco, a well-known and respected engineering firm
with substantial global experience in designing, constructing, and
commissioning precious metal process facilities. We have been working closely
with Ausenco to complete the EPC Contract and the Feasibility Study in close
succession. We are confident that their intimate knowledge of the project will
benefit the successful construction and commissioning of Las Chispas."
Project Finance Facility
·
Key terms of the Credit Agreement include:
·
US$120 million facility with initial 25% drawdown
complete at close on December 31, 2020 ("Closing")
·
No requirement for hedging, cash sweeps, offtakes,
production linked payments, shares or warrants
·
Term of four years
·
The Facility has an availability period of up to 20
months if:
·
Interest rate of 6.95% plus the greater of 3-month
LIBOR (or agreed upon equivalent) or 1.5%
·
3% arrangement fee paid upon Closing of the Credit
Agreement
·
Up to US$30 million of the Facility can be used for
exploration and acquisitions within Sonora, Mexico
EPC Contract and Feasibility Study
The EPC Contract with Ausenco locks in a fixed
price of US$76.5 million for construction of a 1,250 tonne per year process
plant at Las Chispas. Ausenco will begin construction in February 2021, as the
SilverCrest managed earthworks program for the process plant nears completion.
Commissioning of the process plant is targeted for Q2 2022 and production
ramp-up is slated to begin in Q3 2022.
Ausenco is completing the Las Chispas Feasibility
Study and progressing detailed engineering and the construction management
plan. Detailed engineering is progressing well at approximately 60% completion
and procurement of long lead items started in Q4 2020. Advancing these programs
in parallel has allowed Ausenco to develop comprehensive capital and operating
cost estimates for Las Chispas while progressing detailed engineering beyond
what is customary at a Feasibility Study level. The disruption caused by the
COVID-19 pandemic also allowed SilverCrest to initiate an Early Works program
tailored to further reduce project execution risks. This program included the
earthworks package, the water pumping system, and the first phase of the
construction camp. The advancement of the Early Works program coupled with the
fixed price nature of the EPC Contract reduces many common construction, and
market-related risks.
Beyond the tasks included in the EPC Contract, the
remaining initial capital costs anticipated for Las Chispas construction will
include:
·
Development costs of the underground mine;
·
Owner's site costs;
·
On-site infrastructure including Phase 2 of the
confined construction camp, a bridge and the filtered (dry-stack) tailings
system facility;
·
A new 33 kV, 49 km long powerline to replace the
proposed diesel power generation, originally contemplated in the Las Chispas
2019 Preliminary Economic Assessment, effective May 15, 2019, as amended July
19, 2019, to provide better long-term economics and a reduction in greenhouse
gas-emissions; and
·
An analytical laboratory located in the community,
instead of on-site, to provide additional local employment.
Details of the costs beyond the EPC contract will
be presented in the upcoming Feasibility Study.
In the absence of the Feasibility Study of mineral
reserves demonstrating economic and technical viability, there remains
increased uncertainty and historically a higher economic and technical risk of
failure associated with the development of a commercially mineable deposit
until such time as the Feasibility Study has been completed. These risks include,
among others, areas that are analyzed in detail in a feasibility study, such as
applying economic analysis to resources and reserves, more detailed metallurgy
and a number of specialized studies in areas such as mining and recovery
methods, market analysis, and environmental and community impacts.
SilverCrest's Canadian legal counsel for the
agreements were Cassels Brock & Blackwell LLP and Koffman Kalef LLP. Urias
Romero Y Asociados, S.C. acted as SilverCrest's Mexican counsel.
ABOUT SILVERCREST METALS INC.
SilverCrest is a Canadian precious metals
exploration company headquartered in Vancouver, BC, that is focused on new
discoveries, value-added acquisitions and targeting production in Mexico's
historic precious metal districts. The Company's current focus is on the high-grade,
historic Las Chispas mining district in Sonora, Mexico. The Las Chispas Project
consists of 28 mineral concessions, of which the Company has 100% ownership of
where all the resources are located. SilverCrest is the first company to
successfully drill-test the historic Las Chispas Property resulting in numerous
high-grade precious metal discoveries. The Company is led by a proven
management team in all aspects of the precious metal mining sector, including
taking projects through discovery, finance, on time and on budget construction,
and production.
ABOUT RK MINE FINANCE
RK Mine Finance provides bespoke financing
solutions to mining companies including bridge finance, construction finance,
expansion funding, working capital and acquisition facilities. RK has a strong
track record of supporting mining companies with their financing needs and
since its inception has provided committed capital of over $2.0 billion.
Further information on RK can be found at www.rkminefinance.com.
ABOUT AUSENCO
Ausenco is a global company redefining what's
possible. Our team is based across 26 offices in 14 countries, with projects in
over 80 locations worldwide. Combining our deep technical expertise with a
30-year track record, we provide innovative, value-add consulting and
engineering studies and project delivery, asset operations and maintenance
solutions to the mining & metals, oil & gas and industrial sectors.
FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking
statements" within the meaning of Canadian securities legislation. These
include, without limitation, statements with respect to: the strategic plans,
timing and expectations for the Company's exploration, development and
construction activities at the Las Chispas Property, including completion of
the Feasibility Study, the ability to complete further drawdowns under the
Credit Agreement, the costs and timing of construction associated with the EPC
Contract and the timing of completion of the process plant and production ramp
up. Such forward looking statements or information are based on a number of
assumptions, which may prove to be incorrect. Assumptions have been made
regarding, among other things: impact of the COVID-19 pandemic; the reliability
of mineralization estimates, he availability of additional drawdowns under the
Credit Agreement, completion of the Feasibility Study, the conditions in
general economic and financial markets; availability of skilled labour; timing
and amount of expenditures related to rehabilitation and drilling programs; and
effects of regulation by governmental agencies. The actual results could differ
materially from those anticipated in these forward-looking statements as a
result of risk factors including: uncertainty as to the impact and duration of
the COVID-19 pandemic; the timing and content of work programs; proceeding with
the EPC Contract without completion of the Feasibility Study, the availability
of funds under the Credit Agreement and otherwise, results of exploration
activities; the interpretation of drilling results and other geological data;
receipt, maintenance and security of permits and mineral property titles;
environmental and other regulatory risks; project cost overruns or
unanticipated costs and expenses; and general market and industry conditions.
Forward-looking statements are based on the expectations and opinions of the
Company's management on the date the statements are made. The assumptions used
in the preparation of such statements, although considered reasonable at the
time of preparation, may prove to be imprecise and, as such, readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date the statements were made. The Company undertakes
no obligation to update or revise any forward-looking statements included in
this news release if these beliefs, estimates and opinions or other
circumstances should change, except as otherwise required by applicable law.
N. Eric Fier, CPG, P.Eng
Chief Executive Officer
SilverCrest Metals Inc.
SOURCE SilverCrest Metals Inc.
SilverCrest
Metals Inc. (TSXV: SIL.V; NYSE: SILV) is a featured company on Investorideas.com
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