Contango Silver & Gold Inc. amended its credit facility to convert 15,000 ounces of hedged gold into debt. This move eliminates the ceiling on future cash flows from gold production. Shareholders now have full, unhedged exposure to gold prices.
CEO Rick Van Nieuwenhuyse cited the recent pullback in gold prices as the reason to liquidate the hedge book.
The amended facility reduced the interest rate from approximately 8.9% to 7.40%. Total principal increased from $12.6 million to $46.3 million. Repayments are scheduled through mid-2027.
Contango purchased 15,000 put contracts to provide price protection. These contracts feature a strike price of $3,100 per ounce. The company will host a conference call and webcast to discuss the conversion later today.