NAUTILUS RECEIVES ADDITIONAL LOAN UNDER FACILITY WITH MAJOR SHAREHOLDERS
Nautilus Minerals Inc. has received a loan from Deep Sea Mining Finance Ltd. in the principal amount of $1.3-million (U.S.) under the previously announced loan agreement between the company, two of its subsidiaries and the lender, which provides for a secured structured credit facility of up to $34-million (U.S.).
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 $1.3-million (U.S.) loan. Each such warrant entitles the lender to purchase one common share of the company at a price of 22 Canadian cents 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 totalling $12.55-million (U.S.). Pursuant to the loan agreement, share purchase warrants are issued on the basis of one warrant for each 23.28 U.S. cents 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 cent per annum, payable biannually in arrears. Advances of loans are subject to, among other things, the lender’s continuing review and approval of the company’s monthly operational budget. All loans have a maturity date of Jan. 8, 2019 (being one year after the date that the first bridge loan was made). The company will be entitled to prepay, in whole but not in part, the loans at any time prior to maturity, by paying 108 per cent of the outstanding principal of the loans plus accrued and unpaid interest.
The loans are being provided to finance 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 advisers, the remaining project financing of up to approximately $350-million (U.S.) required to complete the development of the Solwara 1 project.
As previously disclosed, the lender is a private company owned 50 per cent by each of: (I) USM Finance Ltd., a wholly owned subsidiary of USM Holdings Ltd., an affiliate of Metalloinvest Holding (Cyprus) Ltd.; 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 Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions. 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, B.C. 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 $34-million (U.S.); and (ii) an exercise price of 17 Canadian cents per share in respect of all such warrants (including the warrants issued with the most recent loan of $1.3-million (U.S.) 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 SEDAR.
About Nautilus Minerals Inc.
Nautilus is the first company to explore the ocean floor for polymetallic sea floor 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.
