07:25 AM EDT, 06/05/2024 (MT Newswires) -- Fortuna Silver Mines Inc. ( FSM ) announced Wednesday that it is offering convertible senior notes due 2029 in an aggregate principal amount of US$150 million. The company in a statement said it expects to grant the initial purchasers of the Notes an option for a period of 15 days to buy up to an additional US$22.5 million aggregate principal amount of Notes.

Shares in Fortuna were down 5.25% in US premarket, having closed down near 5% in regular trade on the NYSE yesterday.

Wednesday's statement noted the company intends to use the net proceeds from the Offering to repay bank indebtedness, to fund working capital requirements, for general corporate purposes and to fund the repayment of its existing 4.65% senior subordinated unsecured convertible debentures, to the extent that such debentures are not converted into shares prior to the redemption date.

Immediately prior to the closing of the Offering, the company intends to issue a notice of redemption in respect of the existing debentures. Holders of the existing debentures may choose to convert their debentures prior to the redemption date or receive a cash payment from the debenture trustee.

The interest rate and the initial conversion rate of the Notes will be determined by Fortuna and the initial purchasers and will depend on market conditions at the time of pricing of the Offering. The Notes will bear cash interest semi-annually at a fixed rate and be convertible by holders into the capital of the company.

Fortuna will have the right to redeem the Notes in certain circumstances and holders will have the right to require Fortuna to repurchase their Notes upon the occurrence of certain events.