Hudbay Minerals has entered into a gold forward sale and prepay arrangement with existing lenders where the company will receive a payment of $115 million for delivering 79,954 gold ounces (oz) in 2022 and 2023 based on gold forward curve prices averaging approximately $1,682/oz. The upfront payment is not subject to any conditions and will be paid on May 11.
“We are pleased to bolster our liquidity position and prefund the entire capital budget for the New Britannia gold mill refurbishment, which is a low-risk, high-return investment with a short payback that is expected to more than double our gold production in Snow Lake to more than 150,000 oz/y by 2022,” Hudbay President and CEO Peter Kukielski said. “This transaction allows us to take advantage of the strong gold price environment at a forward price that is significantly higher than our internal gold price forecasts used for reserve calculations and budgeting.”
The gold prepay was executed by National Bank Financial, as lead arranger, and includes Bank of Montreal, ING Capital Markets LLC and Canadian Imperial Bank of Commerce as counterparties.