EMX Royalty Announces Closing of Its Previously Announced Credit Agreement for a $35 Million Loan with Franco-Nevada Corporation

Rhea-AI Summary

EMX Royalty (NYSE American: EMX) has successfully closed and drawn down a $35 million loan from a subsidiary of Franco-Nevada The loan, maturing on July 1, 2029, was used to repay a $34.42 million outstanding balance to Sprott Resource Lending Corp. and cover a 1% commitment fee. The interest rate is based on the three-month SOFR plus a margin determined by EMX's net debt to adjusted EBITDA ratio, ranging from 300 to 425 basis points.

The loan is secured by EMX's assets and includes certain covenants. Up to $10 million can be voluntarily prepaid annually without penalty. This arrangement further strengthens EMX's relationship with Franco-Nevada, a key shareholder, with whom they have previously collaborated on royalty purchases and joint ventures.

Positive

• Secured $35 million loan to refinance existing debt and improve working capital
• Strengthened relationship with key shareholder Franco-Nevada
• Flexible prepayment option of up to $10 million annually without penalty
• Interest rate tied to company's financial performance, incentivizing improved metrics

Negative

• Increased debt obligation with new $35 million loan
• Additional financial covenants and restrictions on the company's operations
• Potential for higher interest rates based on debt-to-EBITDA ratio

Vancouver, British Columbia--(Newsfile Corp. - August 9, 2024) - EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9) (the "Company" or "EMX") is pleased to announce that it has completed the closing and drawn down the $35 million loan (the "Loan") contemplated in the credit agreement (the "Credit Agreement") between the Company, its subsidiary, EMX Chile SpA ("EMX Chile"), and a wholly-owned subsidiary (the "Lender") of Franco-Nevada Corporation ("Franco-Nevada") (NYSE and TSX:FNV), which was previously announced in the Company's news release dated June 20, 2024. The Company used the proceeds of the Loan to repay the $34.42 million outstanding balance of the loan owed to a Fund managed by Sprott Resource Lending Corp. ("Sprott"), to pay the Lender a commitment fee equal to 1% of the principal amount of the Loan and for general working capital purposes.

The Company is pleased to further develop its working relationship with Franco-Nevada, a key EMX shareholder. In addition to the Loan arrangement, EMX and Franco-Nevada have jointly syndicated royalty purchases (e.g., Caserones) and are actively engaged in a joint venture seeking new royalty financing opportunities.

Credit Agreement - The Loan is structured as a $35 million senior secured term loan facility which matures on July 1, 2029. Interest is payable monthly at a rate equal to the three-month SOFR (i.e., Secured Overnight Financing Rate) plus the applicable margin based on the ratio of the Company's net debt to adjusted EBITDA (see table below), adjusted quarterly.

Ratio of Net Debt / Adjusted EBITDA:	Applicable Interest Rate (per annum):
< 1.00:1	Term SOFR plus 300 basis points
>= 1.00:1 and <1.50:1	Term SOFR plus 325 basis points
>= 1.50:1 and <2.00:1	Term SOFR plus 350 basis points
>= 2.00:1 and <3.00:1	Term SOFR plus 375 basis points
>= 3.00:1	Term SOFR plus 425 basis points

 

During each year, up to $10 million of the Loan may be voluntarily prepaid without penalty, on a cumulative basis.

The Loan is secured by a general security agreement over the assets of EMX and share pledges by EMX and EMX Chile of certain of their subsidiaries or other equity interests, with the Lender retaining the ability, at any time, to designate certain material subsidiaries of the Company to be guarantors of the Loan and provide similar security. Certain covenants under the Credit Agreement, including restrictions on incurring indebtedness and encumbrances, shall apply to the Company and its subsidiaries.

All amounts referred to herein are to United States dollars.

About EMX - EMX is a precious and base metals royalty company. EMX's investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company's common shares are listed on the NYSE American Exchange and TSX Venture Exchange under the symbol "EMX". Please see www.EMXroyalty.com for more information.

About Franco-Nevada - Franco-Nevada Corporation is the leading gold-focused royalty and streaming company with the most diversified portfolio of cash-flow producing assets. Its business model provides investors with gold price and exploration optionality while limiting exposure to cost inflation. Franco-Nevada is debt free and uses its free cash flow to expand its portfolio and pay dividends. It trades under the symbol "FNV" on both the Toronto and New York stock exchanges.

For further information contact:

David M. Cole
President and CEO
Phone: (303) 973-8585
Dave@EMXroyalty.com

Isabel Belger
Investor Relations
Phone: +49 178 4909039
IBelger@EMXroyalty.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release

Forward-Looking Statements

This news release may contain "forward-looking statements" that reflect the Company's current expectations and projections about its future results, but which are not statements of fact. When used in this news release, words such as "estimate," "intend," "expect," "anticipate," "will", "believe", "potential" and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company's future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company's actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to the Company being unable to comply with the covenants under the Credit Agreement, including the repayment of any amounts owing under the Loan, and other factors.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company's MD&A for the quarter ended March 31, 2024 (the "MD&A"), and the most recently filed Annual Information Form ("AIF") for the year ended December 31, 2023, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR+ at www.sedarplus.ca and on the SEC's EDGAR website at www.sec.gov.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/219316

FAQ

What is the purpose of EMX Royalty's new $35 million loan from Franco-Nevada?

EMX Royalty (EMX) used the $35 million loan to repay an outstanding $34.42 million balance to Sprott Resource Lending Corp., pay a 1% commitment fee to the lender, and for general working capital purposes.

When does EMX Royalty's new $35 million loan from Franco-Nevada mature?

The $35 million loan from Franco-Nevada to EMX Royalty (EMX) matures on July 1, 2029.

How is the interest rate determined for EMX Royalty's new loan from Franco-Nevada?

The interest rate for EMX Royalty's (EMX) loan is based on the three-month SOFR plus a margin determined by the company's net debt to adjusted EBITDA ratio, ranging from 300 to 425 basis points.

What are the prepayment terms for EMX Royalty's new $35 million loan?

EMX Royalty (EMX) can voluntarily prepay up to $10 million of the loan annually without penalty, on a cumulative basis.