Almas’ 2nd Issuance of Simple Debentures: A Closer Look

Aura Minerals Inc. (TSX: ORA) (B3: AURA33) (OTCQX: ORAAF) has announced that its subsidiary, Aura Almas Mineração S.A. (Almas), has approved the rectification of certain terms and conditions of the 2nd issue of simple debentures. This article delves into the key aspects of this issuance, its potential implications, and the revised use of funds.

The total amount of the issuance has been increased from BRL 500,000,000.00 to BRL 1,000,000,000.00 (one billion reais). This increased total amount may impact the company's liquidity and cash flow management positively, as it provides Almas with more funds to address its financial needs. However, it also increases the risk for investors, as a larger issuance may lead to a higher level of dilution.


The new interest rate structure is based on the one-day Interbank Deposit (DI) Rate, with a spread ranging from 1.60% to 1.75% per year, based on 252 business days. This structure may make the debentures more attractive to investors, as it ties the interest rate to a benchmark rate, providing a degree of security. However, the higher interest rate and spread may also make the debentures less attractive to potential investors, as it increases the cost of borrowing for Almas.

The net funds raised through the issuance will be used for cash reinforcement and ordinary management of the company's business, early redemption of all debentures issued by the company within the scope of the 1st issue, and payment and full settlement of other debts of the company. The early redemption of existing debentures may influence the company's long-term debt management strategy, as it reduces the outstanding debt and potentially improves the company's creditworthiness. However, it may also impact the company's cash flow, as it requires additional funds for redemption.


The debentures will continue to mature in six years, counting from the effective date of issue, and will be distributed to the public under the automatic registration rite, pursuant to CVM Resolution 160 as of July 13, 2022. This continued maturity and the automatic registration rite for the offering may affect the liquidity and accessibility of the debentures for investors, as it provides a clear timeline for redemption and a streamlined process for acquisition.

In conclusion, Almas’ 2nd issuance of simple debentures presents both opportunities and challenges for investors. The increased total amount, new interest rate structure, and revised use of funds may impact the company's liquidity, cash flow management, debt management strategy, and the attractiveness of the debentures to potential investors. As always, it is essential for investors to carefully evaluate the risks and potential rewards before making any investment decisions.