Breakwater clears hurdle

Agreements between Breakwater Resources (BWR-T) and its lenders will allow an 85.8-million-share issue to go ahead, providing the financially troubled base metal miner with a cash infusion of $30 million.

Breakwater’s banking syndicate and Dundee Bancorp (DBC.A-T), which is both a major shareholder and a major lender, have agreed to a schedule for Breakwater to pay down half of two loans: a US$17.6-million non-revolving credit facility and a US$6.5-million supplemental term facility. The two are paid down proportionately over the repayment schedule, and principal repayments start in July 2004.

The remaining balance on those two lines of credit is extended to January 2009, with interest payable on balances at the London Interbank Offer Rate (LIBOR) plus 2.75%. (Overnight LIBOR is currently 1.05%.)

The banks have also agreed to maintain an existing revolving-credit facility with a limit of US$25 million, down from US$30 million.