Nautilus receives additional loan under facility with major shareholders
12 June 2018 - 12:00PM
Nautilus Minerals Inc. (TSX:NUS) (OTC:NUSMF)
(Nasdaq Intl Designation) (the
"
Company" or "
Nautilus")
announces that the Company has received a loan from Deep Sea Mining
Finance Ltd. (the "
Lender") in the principal
amount of US$1.3 million under the previously announced loan
agreement (the "
Loan Agreement") between the
Company, two of its subsidiaries and the Lender which provides for
a secured structured credit facility of up to US$34 million.
Consistent with previous bridge loans provided
by the Lender, pursuant to the Loan Agreement the Company has
issued to the Lender an additional 5,584,192 warrants of the
Company in connection with the US$1.3 million loan. Each such
warrant entitles the Lender to purchase one common share of the
Company at a price of C$0.22 for a period of five years from the
date of issuance of the warrant.
To date the Company has issued a total of
53,908,932 share purchase warrants to the Lender in connection with
loans totaling US$12,550,000. Pursuant to the Loan Agreement, share
purchase warrants are issued on the basis of one warrant for each
US$0.2328 of principal amount of loan advanced.
The Company may draw loans under the Loan
Agreement on a monthly basis, which shall bear interest at 8% per
annum, payable bi-annually in arrears. Advances of loans are
subject to, among other things, the Lender's ongoing review and
approval of the Company's monthly operational budget. All loans
have a maturity date of January 8, 2019 (being one year after the
date that the first bridge loan was made). The Company will be
entitled to pre-pay, in whole but not in part, the loans at any
time prior to maturity, by paying 108% of the outstanding principal
of the loans plus accrued and unpaid interest.
The loans are being provided to fund the
Company's working capital requirements and enable the Company to
continue the advancement of the Solwara 1 Project while the Company
seeks, with the assistance of its financial advisors, the remaining
project financing of up to approximately US$350 million required to
complete the development of the Solwara 1 Project.
As previously disclosed, the Lender is a private
company owned 50% by each of: (i) USM Finance Ltd., a wholly owned
subsidiary of USM Holdings Ltd, an affiliate of Metalloinvest
Holding (Cyprus) Limited; and (ii) Mawarid Offshore Mining Ltd., a
wholly-owned subsidiary of MB Holding Company LLC. As the Lender is
indirectly controlled by two insiders of the Company, the Lender is
a "related party" of the Company and the loan transaction
constitutes a "related party transaction" of the Company under MI
61-101 Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). The transactions
comprising the loans and the share purchase warrants are exempt
from the formal valuation and minority shareholder approval
requirements of MI 61-101.
The Company did not file a material change
report more than 21 days before the expected closing of this
transaction, as the details of the transaction were not finalized
until immediately prior to the closing and the Company wished to
close the transaction as soon as practicable for sound business
reasons.
Annual General Meeting (AGM)
As previously disclosed, the Company plans to
hold its annual general meeting on June 25, 2018, at the offices of
its Canadian legal counsel DuMoulin Black LLP in Vancouver, British
Columbia. At the AGM, in addition to routine annual business, the
Company will be seeking disinterested shareholder approvals of: (i)
the issuance of the maximum number of share purchase warrants to
the Lender under the Loan Agreement in connection with loans of up
to US$34 million; and (ii) an exercise price of C$0.17 per share in
respect of all such warrants (including the warrants issued with
the most recent loan of US$1.3 million referred to above), all as
required by the rules of the Toronto Stock Exchange.
Further details of the AGM are provided in the
notice of meeting and information circular delivered or made
available to shareholders on May 16, 2018, and which can be
obtained under the Company's profile at www.sedar.com.
For more information please refer to
www.nautilusminerals.com or contact:
Investor Relations
Nautilus Minerals Inc. (Toronto) Email:
investor@nautilusminerals.com Tel: +1 416 551 1100 |
|
The TSX does not accept responsibility
for the adequacy or accuracy of this press release.
Certain of the statements made in this news
release may contain forward-looking information within the meaning
of applicable securities laws, including statements with respect to
the Company's funding requirements, expectations to receive
additional loans under the Loan Agreement, and the continued
development of the Solwara 1 Project. We have made numerous
assumptions about such statements, including
assumptions relating to the Company’s funding
requirements, project funding, and completion and
operation of the Company's seafloor
production system. Even though our
management believes the assumptions made
and the expectations represented by such statements are
reasonable, there can be no assurance that they will prove to be
accurate. Forward-looking information by
its nature involves known and
unknown risks, uncertainties and
other factors which may cause the actual results to be
materially different from any future results expressed or implied
by such forward-looking information. Please
refer to our most recently
filed Annual Information Form in
respect of material assumptions and risks related to
the prospects of extracting minerals from the seafloor and other
risks relating to the Company's
business and plans for development
of the Solwara 1 Project. Risks
related to continuing the Company's operations and advancing the
development of the Solwara 1 Project include the risk that the
Company will be unable to obtain at all or on acceptable terms, and
within the timeframes required, the remaining financings necessary
to fund completion of the build, testing and deployment of the
Company's seafloor production system; that the Company will be
unable to satisfy the conditions to receiving additional loans
under the Loan Agreement; that the Company will be unable to
rectify or arrange for the rectification of the default under the
shipbuilding contract for the construction of the production
support vessel; and that agreements with third party contractors
for building slots within certain timeframes are not secured as
required. As the Company has not
completed a prefeasibility study or feasibility study
in respect of the Solwara 1
Project, there can be no assurance
that the Company's production plans will, if fully funded and
implemented, successfully demonstrate that seafloor resource
production is commercially viable. Except as required by law, we do
not expect to update forward-looking statements
and information as conditions change
and you are referred to the
full discussion of the Company's
business contained in the Company's
reports filed with the securities
regulatory authorities in Canada.
About Nautilus Minerals Inc.
Nautilus is the first company to explore the ocean floor for
polymetallic seafloor massive sulphide deposits. Nautilus was
granted the first mining lease for such deposits at the prospect
known as Solwara 1, in the territorial waters of Papua New Guinea,
where it is aiming to produce copper, gold and silver. The Company
has also been granted its environmental permit for this site.
Nautilus also holds highly prospective exploration acreage in the
western Pacific (granted and under application), as well as in
international waters in the Central Pacific. A Canadian registered
company, Nautilus is listed on the TSX:NUS stock exchange and is
also a member of the Nasdaq International Designation program. Its
corporate office is in Brisbane, Australia. Its major shareholders
include MB Holding Company LLC, an Oman based group with interests
in mining, oil & gas, which holds a 30.4% interest and
Metalloinvest, the largest iron ore producer in Europe and the CIS,
which has a 19.2% holding (each on a non-diluted basis, excluding
loan shares outstanding under the Company’s share loan
plan).