Novo Resources amends, draws from Sprott credit facility

By Marisa Wong

Los Angeles, April 9 – Novo Resources Corp. said it entered into an agreement to amend some terms of its outstanding $60 million credit facility with Sprott Resource Lending Corp. and Sprott Private Resources Lending II (Collector), LP.

Novo has also drawn down an additional $5 million, according to a press release. The company drew down the first $35 million tranche of the facility in September 2020.

The company has renegotiated the second tranche of the facility to total $15 million – subject to a lender’s 2% cash discount – inclusive of the $5 million drawdown, available to be drawn until Sept. 30, at its discretion.

Novo renegotiated the second tranche in order to retain financial flexibility as it advances its Beatons Creek conglomerate gold project to full-scale commercial production and in light of completion of the sale of a portion of its Blue Spec tenure to Calidus Resources Ltd., which included a significant equity component in lieu of cash.

The remaining $10 million available under the renegotiated second tranche is subject to the satisfaction by Novo, or waiver by Sprott, of some conditions set out in the credit agreement governing the facility.

In addition to the lender’s cash discount, the company is also required to pay to Clarus Securities Inc. and Stifel GMP a 4.5% cash fee on amounts drawn.

The gold exploration company is based in Vancouver, B.C.

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