Kingsgate Consolidated (ASX:KCN) has secured a US$25 million standby loan facility with Nebari Natural Resources Credit Fund II, and affiliated entities, marking a major step in reducing its debt.
An initial US$10 million drawdown, combined with cash proceeds of approximately US$21 million, will be used to refinance Kingsgate's existing US$31 million loan facility, following the update announced on July 16, 2024.
The refinancing is expected to reduce Kingsgate's total borrowings by 68%, from $47 million to $15 million, following the initial drawdown.
The funds will be available once standard conditions precedent are met, providing the company with greater financial flexibility.
The facility allows progressive drawdowns over the next 12 months, a reduction in interest rates on drawn amounts by up to 1.25% per annum, and no principal repayments in the first six months.
It also extends the loan maturity by six to twelve months compared with previous tranches and replaces contingent issuance of ~2.9 million warrants with ~1.95 million new subscription warrants at a strike price of 1.3 times the 15-day VWAP of Kingsgate shares, expiring two years from the closing date.
Kingsgate CEO Jamie Gibson said the refinancing represents a "significant milestone" in deleveraging the company while maintaining funding flexibility.
Nebari’s Senior Managing Director, Roderik van Losenoord, highlighted the company’s rapid growth, noting Kingsgate's increase from no production to 24,000 ounces of gold and over 200,000 ounces of silver in the past quarter.