S&P rates Tacora B-, notes B

S&P said it gave Tacora Resources Inc. a B- issuer credit rating and its planned $150 million of senior secured notes B with 2 recovery ratings.

“Tacora has limited operating breadth, with reliance on a single mine for cash flow generation. Our ICR on Tacora primarily reflects the company's small scale and scope as an early-stage single-mine operator. The company produces high-grade iron ore from its Scully mine in Newfoundland and Labrador,” S&P said in a press release.

The agency said it forecasts Tacora will generate FOCF of about $70 million in 2021, fueled by iron ore prices near historical peak levels.

“Tacora produces high-grade iron ore with 65.9% iron content and low levels of impurities, sold exclusively to Cargill through an off-take agreement,” S&P said.

The outlook is stable, reflecting an expectation that Tacora will generate strong FOCF and low leverage over the next two years, S&P said.

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