The mineral explorer has lifted the weight of US$20 million in debt off its shoulders.
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The Aeris Resources Ltd (ASX: AIS) share price is pushing higher today following the company’s update in regards to its balance sheet.
At the time of writing, the mineral explorer’s shares are swapping hands for 22 cents, up 4.76%.
It’s worth noting that the Aeris share price is also within reach of breaking its multi-year high of 23 cents, which it hit in January 2021.
What did Aeris announce?
Investors appear pleased with the company’s efforts to shore up its balance sheet, sending the Aeris share price higher.
According to the release, Aeris advised it has become debt-free, repaying US$20 million to clear the balance of its senior debt facility (Tranche A).
Since 2015, Aeris has been financed by Special Portfolio Opportunity V Limited (SPOV), a subsidiary of a fund managed by PAG.
In addition to that announcement, Aeris revealed that Australia and New Zealand Banking GrpLtd (ASX: ANZ) has entered arrangements to becomes its senior banker. As such, ANZ will provide a $35 million Contingent Instrument Facility, a $20 million Working Capital Facility and unsecured hedging lines for gold and FX.
Both the Contingent Instrument Facility and the Working Capital Facility are subject to an annual review. Aeris stated that the pricing and terms are competitive for these types of facilities.
The Contingent Instrument Facility will cover the company’s environmental bonding and bank guarantee requirements. This releases $20 million that was held as collateral against bonding/guarantee obligations.
Following the final debt repayment and the release of $20 million in restricted cash, the net impact on the corporate cash balance is a reduction of $7 million.
Aeris executive chair, Andre Labuschagne commented:
When I started with Aeris at the end of 2012 we had almost US$150m in debt. Making this last repayment and finally being debt free is particularly satisfying.
We have had a long working relationship with ANZ, which has been further strengthened today as they now become our senior banker.
With a strong cash balance and financial flexibility, our focus is now to deliver on our development pipeline and aggressive exploration program planned for FY22.
About the Aeris share price
Shareholders will be celebrating the company’s news today, further accelerating the Aeris share price to a near multi-year high. Since this time last year, the Aeris share price has gained 450%, with year-to-date growth of 100%.
Based on today’s price, Aeris has a market capitalisation of roughly $468 million, with more than 2.2 billion shares on issue.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.