Noront Announces Debt Extension and Royalty Sale and Provides Additional Updates
24 December 2019 - 7:05AM
Noront Resources Ltd. (“Noront” or the “Company”) (TSX Venture:
NOT) has extended the terms of its current debt facilities with
Franco-Nevada Corporation ("Franco-Nevada") and Resource Capital
Fund V L.P. ("RCF V"). The Company’s loan with Franco-Nevada
has been extended to September 30, 2022 and the maturity of its
convertible debenture with RCF V has been extended to September 30,
2021. In addition, Noront has granted a 1% gross revenue
royalty on the Eagle’s Nest Nickel-Copper-PGM deposit for C$5.0
million to Franco-Nevada.
“Our largest financial partners have extended
the terms of their existing support and Franco-Nevada has increased
its investment in Noront,” said Alan Coutts, President and CEO of
Noront Resources. “We appreciate this vote of confidence and are
fortunate to have many supportive stakeholders who share our vision
of developing the Ring of Fire in a responsible manner with local
communities, for the benefit of generations to come.”
Amended Loan Agreements
Franco-Nevada Loan ExtensionIn 2015, Noront
Muketei Minerals Ltd. (100% owned subsidiary of Noront) entered
into an amended and restated loan agreement (the “Loan Agreement”)
through which Franco-Nevada loaned Noront US$25 million for a term
of five-years at an interest rate of 7% per annum, with all
interest accrued and payable at the end of the term. The loan
proceeds were used to finance the acquisition of the Cliff’s
Natural Resources Chromite Properties in the Ring of Fire (the
"Cliffs Transaction"). This loan is secured by the assets
acquired in the Cliffs Transaction and was to be repayable on April
30, 2020. Pursuant to an amending agreement entered into on
the date hereof between Noront and Franco-Nevada, the Loan
Agreement has been extended under substantially the same terms and
conditions until September 30, 2022.
RoyaltyThe Company has granted Franco-Nevada a
1% gross revenue royalty on the Eagles’ Nest Nickel-Copper-PGM
deposit for C$5.0 million. The proceeds from the sale
of the royalty will be used to advance Noront’s Eagle’s Nest
Project, the Chromite Projects and for general working capital
purposes.
Resource Capital Convertible DebentureNoront
also entered into a ninth amending agreement dated December 23,
2019 (the “Ninth Amending Agreement”) with its largest shareholder,
RCF V to, among other things, extend the term of its existing US$15
million convertible debenture (the “Convertible Debenture”). The
maturity date of the Convertible Debenture has been extended to
September 30, 2021. RCF will continue to accept all interest
payments in common shares of the Company, subject to the approval
of the TSX Venture Exchange (the “TSXV”), with interest paid
quarterly in arrears at the same rate of 8% per annum. The
Convertible Debenture continues to be convertible into common
shares of the Company at the option of RCF V, with the conversion
price having been set at C$0.20 cents per common share (previously
C$0.34 cents per common share), at any time prior to the maturity
date. All other material terms and conditions of the Convertible
Debenture remain the same.
Additional Updates
Earlier this year, the environmental assessment
for sections of the Ring of Fire all-season access road being led
by traditional land holders Marten Falls and Webequie First Nation
advanced to the public review and commentary phase on both the
provincial Terms of Reference and federal Project Descriptions. In
addition, an upgrade was completed on the 20 kilometre stretch of
Highway 643 between Nakina and Aroland First Nation.
In June 2019, the U.S. government issued a
report and action plan for A Federal Strategy to Ensure a Reliable
Supply of Critical Minerals designed to make America’s economy and
defense more secure. The strategy directs the U.S. government to
reduce its reliance on foreign-supplied critical minerals,
including chromium which is used in domestic stainless-steel
production and currently imported as ferrochrome from South Africa
and Asian countries. The action plan is designed to develop an
internal supply for these minerals or to import them through
investment or trade with American allies. Canada is the first ally
listed, potentially offering a unique opportunity for us to meet
this strategic need with exported ferrochrome produced in
Ontario.
Certain of the transactions described in this
news release between the Company and RCF constituted “related party
transactions” within the meaning of Multilateral Instrument 61-101
– Protection of Minority Shareholders in Special Transactions (“MI
61-101”). For this transaction the Company intends to rely on the
exemption from the formal valuation requirements of MI 61-101
contained in section 5.5(b) of MI 61-101 on the basis that no
securities of the Company are listed on a specified market set out
in such section, and the Company intends to rely on the exemption
from the minority shareholder approval requirements of MI 61-101
contained in Section 5.7(1)(e) of MI 61-101 on the basis of
financial hardship if the Convertible Debenture is not
extended. The Company did not file a material change report
more than 21 days before the entering into of the Ninth Amending
Agreement as the details of such agreement were not settled until
shortly prior to closing and the Company wished to close the Ninth
Amending Agreement on an expedited basis for sound business
reasons.
About Noront Resources
Noront Resources Ltd. is focused on the
development of its high-grade Eagle’s Nest nickel, copper, platinum
and palladium deposit and the world class chromite deposits
including Blackbird, Black Thor, and Big Daddy, all of which are
located in the James Bay Lowlands of Ontario in an emerging metals
camp known as the Ring of Fire. www.norontresources.com
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
For more information:Janice
Mandeljanice.mandel@stringcom.com647-300-3853
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