Sprott Resource Lending Corp. is a natural resource lender focused on providing financing to mining and oil and gas companies.In July 2013, Sprott Inc. completed the acquisition of Sprott Resource Lending Corp. which now operates as a subsidiary of Sprott Inc.
The Company’s leadership team has significant lending experience and deep expertise investing in the natural resource space and applies conservative lending practices and careful asset evaluation to generate shareholder value.
Accessing capital from Sprott Resource Lending Corp. allows mid cap and junior resource companies to execute on their strategic plans through increasing their enterprise value or restructuring their capital base.
Growth in the natural resource space, and in particular through the TSX and TSX-V, have put Canada in the centre of financings in this sector. The Company is focused on providing temporary specific purpose loans with attractive and desirable security and attractive interest yields with equity participation.
Sprott Resource Lending Corp. applies strict underwriting discipline and engages in extensive due diligence to identify mining and oil and gas companies that are strong loan candidates.
Typical Sprott Resource Lending Corp. loan
Loan sizes will vary depending on the borrower’s plans and stage of development but typically will vary from $10 million to $25 million. As amounts exceed $25 million, Sprott Resource Lending Corp. will organize and arrange affiliates and other lenders to provide facilities ranging from $50 million to $400 million.
Oil and gas, mining, precious and base metals; start ups excluded but will consider early stage companies. Private companies may also be considered depending on the project.
Purpose and Structure
With an eye to reducing dilution that permanent financings may bring, Sprott Resource Lending provides customized structures that match the business plans of its clients and do not require hedging of commodity risks. Financings can range from short term bridge financing to longer four or five year term notes or more conventional project debt financing.
Payment structures can be in the form of precious metal loans or prepaid precious metal purchases, and interest only or amortizing principal. Use of proceeds may vary and include funding feasibility studies, project or expansion capital, acquisition financing, working capital and a bridge to more permanent financings.
Depending on the borrower’s capital structure, a general security agreement and/or specific security will be a condition of financing.