TMAC Resources Revises Credit Facility

TMAC Resources Inc. (TSX: TMR) ("TMAC” or the "Company”) has entered into a term sheet with Sprott Private Resource Lending (Collector), LP ("Sprott”) to provide for total borrowings of US$160 million. The approximately US$30 million of additional funds allow TMAC to finance the significant, seasonal expenses incurred during the summer sealift period and the revisions to the term and repayment schedule of the existing senior secured term loan facility Credit Agreement (the "Credit Agreement”) entered into in July 2015 (see news release dated July 23, 2015) accommodates the Company’s plans to develop the Madrid and Boston deposits over the next five years. Under the term sheet Morgan Stanley Capital Group Inc. will no longer be a lender under the Credit Agreement.

The amendments to the original Credit Agreement will result in an Amended and Restated Credit Agreement (the "Revised Credit Agreement”) comprising two Tranches: Tranche 1 for US$30 million; and, Tranche 2 for US$130 million. The original Credit Agreement had an aggregate principal amount of US$120 million which, with accrued interest, totalled approximately US$130 million at June 30, 2017, had monthly principal repayments starting July 31, 2017 and had repayment in full required on December 31, 2018. The Revised Credit Agreement will have an aggregate principal amount of US$160 million with principal repayments deferred until October 2018 and the maturity date extended to July 31, 2022.

Ron Gagel, TMAC’s Executive Vice President and Chief Financial Officer, stated, "The Revised Credit Agreement’s principal repayment schedule is better aligned with our production and revenue profiles from the Doris mine. In addition, the five-year term matches TMAC’s development timetable for putting both Madrid and Boston into production using expected cash flows. It also allows us to maintain our strong relationship with our principal lender, Sprott, who has been extremely supportive of the Company and who has worked closely with us throughout our development.”

Jim Grosdanis, Managing Partner of Sprott, commented, "As one of the largest investors dedicated to the natural resource sector, Sprott is excited to continue its partnership with TMAC. We look forward to working with the management team on the development of Hope Bay, one of the premier gold assets in Canada.”

Revised Credit Agreement

Tranche 1 of the Revised Credit Agreement will have a single bullet repayment on January 31, 2019. It will provide additional funds for this summer’s sealift period, the continued ramp up of the processing plant this year and the installation and ramp up of the second pre-concentrator to be delivered during this year’s sealift and expected to be installed later this year and commissioned in 2018.

Tranche 2 of the Revised Credit Agreement has a term of up to five years, maturing on July 31, 2022, with an initial three-year period that can be extended to five years provided that, fifteen days after the third anniversary of closing, TMAC pays an additional cash payment of US$1.56 million, equal to 2.00% of the amount of the then outstanding Revised Credit Agreement, and the Doris mine has and maintains a mineral reserve tail greater than 20%. During the initial three-year term, prepayment can be made at a cost of 2.0% of the then outstanding principal balance and thereafter at no cost. The extended repayment period, along with cash generated by TMAC from operations, is expected to provide all of the funds necessary for TMAC to develop both the Madrid and Boston deposits for production and continue the exploration of the Hope Bay belt.

The Revised Credit Agreement has an interest rate of 6.5% plus the greater of (i) US Dollar three-month LIBOR, and (ii) 1.0% per annum, payable quarterly. The original Credit Agreement bears interest at 8.75%.

The revised amortization is to be as follows:

• Tranche 1:
  • Bullet repayment of US$30 million on January 31, 2019.
• Tranche 2:
  • Principal repayments equal to $6.5 million will commence October 31, 2018 and be paid quarterly thereafter until July 31, 2020 (i.e., 40% amortized through to the third anniversary of the closing date).
  • Principal repayments equal to $5.5 million will commence October 31, 2020 and be paid quarterly thereafter (i.e., further 30% amortized through to the maturity date).
  • A final payment equal to the remaining unpaid balance will be made on the maturity date (i.e., 30% bullet payment).

On closing of the Revised Credit Agreement, expected before the end of July, Sprott will receive:

• US$3.2 million, equal to 2.0% of the US$160 million.
• 1,900,000 warrants that will entitle the holder to purchase one common share, will have a term of five years from their date of issue and will have an exercise price equal to a 25% premium of the price of TMAC’s common shares based on the volume weighted average trading price of TMAC’s common shares on the Toronto Stock Exchange (the "TSX”) for the five trading days immediately following this announcement.

The Revised Credit Agreement will contain other usual and customary terms and conditions similar to the existing Credit Agreement.

As at June 30, 2017, TMAC had $17 million of cash including the Credit Agreement’s required minimum cash balance and excluding the other $42 million of restricted cash balances for environmental and other bonding requirements.

ABOUT TMAC RESOURCES

TMAC holds a 100% interest in the Hope Bay Project located in Nunavut, Canada. TMAC is an emerging gold producer with the Doris Mine pouring first gold in the first quarter of 2017 and achieving commercial production in the second quarter of 2017. The Madrid and Boston properties are expected to commence production in 2020 and 2022, respectively. The Company has an experienced, expert board of directors combined with exploration, development and operating teams with extensive track records of discovering, developing and operating high grade, profitable underground mines. TMAC’s shares trade on the Toronto Stock Exchange under the trading symbol TMR.

FORWARD-LOOKING INFORMATION

This release contains "forward-looking information” within the meaning of applicable securities laws that is intended to be covered by the safe harbours created by those laws. "Forward-looking information” includes statements that use forward-looking terminology such as "may”, "will”, "expect”, "anticipate”, "believe”, "continue”, "potential” or the negative thereof or other variations thereof or comparable terminology. Such forward-looking information includes, without limitation, the returns from the Hope Bay Project being greater than the cost of capital under the Revised Credit Agreement, the timing for bringing Madrid and Boston into production and the ramp up at Doris.

Forward-looking information is not a guarantee of future performance and management bases forward-looking statements on a number of estimates and assumptions at the date the statements are made. Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors, which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking information. See "Risk Factors” in the Company’s Annual Information Form dated February 23, 2017 filed on SEDAR at www.sedar.com for a discussion of these risks.

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