Ann: NCZ EXPANDS WORKING CAPITAL FACILITIES WITH VARDE PARTNERS, page-7

Spot on. Being senior secured over the assets (vs unsecured previously) for the additional $40M reduces Varde’s risk significantly regardless of the zinc price.

For NCZ on the other hand it means that more of their cash goes out as interest + a cap in case the share price if the shares have a modest rise. They have $100M to pay in 2.5 years time + their deferred state royalties ($50-70M from memory) also be comes due around that time. They also deferred their private royalty (will be interesting to see when this resumes). Not to mention the progressive replacement of the MMG enviro liability.

That all said, It’s probably the least bad deal that they could have done given the cards they have.

All this doesn’t change the fundamentals of the zinc market though - Price of zinc will be sub $1/lb in Q1’20.