Nautilus receives additional loan under secured loan facility
14 September 2018 - 10:18AM
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$500,000
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.
Pursuant to the Loan Agreement, the Company has
issued to the Lender an additional 2,147,766 warrants of the
Company in connection with the US$500,000 loan. Each such warrant
entitles the Lender to purchase one common share of the Company at
a price of C$0.17 for a period of five years from the date of
issuance of the warrant.
To date the Company has issued a total of
63,896,044 share purchase warrants to the Lender in connection with
loans totaling US$14,875,000. 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. 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 affiliates of the Company's two largest
shareholders, 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.
The issuance by the Company of the maximum
number of warrants under the Loan Agreement, and the C$0.17
exercise price of such warrants, received the requisite
disinterested shareholder approvals at the Company's annual general
meeting held on June 25, 2018 as required by the Toronto Stock
Exchange.
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 previously disclosed default and rescission 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).