Nautilus receives additional loan under secured loan facility
16 October 2018 - 9:24PM
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$770,000
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 3,307,560 warrants of the
Company in connection with the US$770,000 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
68,492,264 share purchase warrants to the Lender in connection with
loans totaling US$15,945,000. 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 (the "PSV");
that the Company will be unable to arrange for the charter of the
PSV from the owner of the PSV; 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).