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(Sharecast News) - Amaroq announced on Wednesday that it has secured improved terms on its debt financing package with Icelandic lender Landsbankinn, extending the facility's maturity by 14 months and adding new margin step-downs linked to earnings performance.
The AIM-traded company said the revised agreement would strengthen its financial flexibility as commissioning progresses at its Nalunaq gold project in South Greenland.
It said the maturity of the revolving credit facility was pushed out from December 2026 to February 2028, while the interest margins across its three tranches had the potential to fall significantly as the business generated higher earnings.
The $35.245m facility comprises a fully drawn $18.5m tranche A and a $10.245m tranche B, both carrying a current margin of 9.5% that will reduce to 7.5% once tranche C becomes available.
Amaroq said the $6.5m tranche C, which would carry a 7.5% margin on availability, could be accessed once the company records cumulative EBITDA of at least CAD 6m over a three-month period.
Under the amended terms, margins can decline further based on last-twelve-months EBITDA, stepping down to 6.25% if EBITDA exceeds CAD 25m, 5.00% above CAD 50m and 4.50% above CAD 70m.
The board said the amendment included a 0.7% fee on total commitments, equivalent to US$245,000, which has been capitalised into tranche B.
It said the facility remained secured against a mix of property and equipment mortgages, subsidiary share pledges, bank account pledges and a licence transfer agreement.
Chief financial officer Ellert Arnarson said the improved package reflected the company's progress at Nalunaq.
"We are very pleased to have executed an amendment to our debt financing agreement with Landsbankinn, extending the maturity from December 2026 to February 2028 and the potential to improve overall terms to 4.5% plus SOFR, thereby enhancing Amaroq's financial flexibility," he said.
"The Nalunaq project in South Greenland is well advanced in its commissioning and beginning to generate revenues, which will unlock the improved margins on our financing facility and lower operating costs.
We also continue to pursue additional financing opportunities, including with offtakers and credit agencies, to further support the company's growth and balance sheet strength."
At 1206 GMT, shares in Amaroq were up 3.26% at 95p.
Reporting by Josh White for Sharecast.com.