EARLY WARNING NEWS RELEASE OF DEEP SEA MINING FINANCE LTD.
Nautilus Minerals Inc. lender Deep Sea Mining Finance Ltd. and its joint actors, Metalloinvest Holding (Cyprus) Ltd. and its affiliates and Mawarid Offshore Mining Ltd., have acquired 75,171,816 warrants of Nautilus. Each warrant entitles the holder to purchase one common share in the capital of the issuer, for a period of five years after the issuance of the warrant, at a price equal to 17 cents per common share.
The warrants were acquired pursuant to a loan agreement dated June 8, 2018, as amended, among the acquiror, the issuer, Nautilus Minerals Pacific Pty. Ltd. and Nautilus Minerals Niugini Ltd. Pursuant to the loan agreement, the acquiror agreed to make a loan to the issuer in the principal amount of $34-million (U.S.). Prior to June 8, 2018, the acquiror had previously advanced to the issuer an aggregate amount of $11.25-million (U.S.) under the loan.
Prior to the acquisition, the acquiror held no common shares and held no securities convertible into common shares. After the acquisition, the acquiror holds 75,171,816 warrants. Upon exercise of the warrants, the acquiror may acquire up to 75,171,816 common shares. As a result of the acquisition and assuming the exercise of all warrants, the acquiror would hold 75,171,816 common shares, which, on a partially diluted basis, is equal to approximately 10.02 per cent of the issued and outstanding common shares (excluding in the calculation common shares which have been issued under, and remain subject to the terms and conditions of, the issuer’s share loan plan).
Metallo, a joint actor of the acquiror, holds 129,792,256 common shares, which, on a partially diluted basis, is equal to approximately 19.23 per cent of the issued and outstanding common shares, or including the 75,171,816 warrants acquired by Deep Sea, 27.33 per cent of the issued and outstanding common shares (excluding in the calculation common shares which have been issued under, and remain subject to the terms and conditions of, the issuer’s share loan plan).
Mawarid, a joint actor of the acquiror, holds 205,039,991 common shares (including 195,400 common shares owned by an affiliate of Mawarid, MB Holding Company LLC), which on a partially diluted basis is equal to approximately 30.39 per cent of the issued and outstanding common shares, or including the 75,171,816 warrants acquired by Deep Sea, 37.36 per cent of the issued and outstanding common shares (excluding in the calculation common shares which have been issued under, and remain subject to the terms and conditions of, the issuer’s share loan plan).
After the acquisition, the acquiror and the joint actors collectively hold 334,832,247 common shares and 75,171,816 warrants. Upon exercise of the warrants by the acquiror, the acquiror may acquire up to 75,171,816 common shares. As a result of the acquisition and assuming the exercise of all warrants, the acquiror and the joint actors would collectively hold 410,004,063 common shares, which, on a partially diluted basis, is equal to 54.67 per cent of the issued and outstanding common shares (excluding in the calculation common shares which have been issued under, and remain subject to the terms and conditions of, the issuer’s share loan plan).
The warrants were acquired by the acquiror and the joint actors pursuant to the loan agreement. The warrants were issued by the issuer as consideration for the loan. The warrants were issued on the basis of one warrant for each 23.28-U.S.-cent (30.95-Canadian-cent) principal amount of each advance under the loan. The consideration paid by the acquiror and received by the issuer was 23.28 U.S. cents (30.95 Canadian cents) per warrant or $17.5-million (U.S.) ($23,265,677 (Canadian)) for the 75,171,816 warrants.
The acquiror and the joint actors acquired the warrants under the loan agreement. Pursuant to the loan agreement, the issuer may issue warrants to purchase up to an additional 70,876,293 warrants to the acquiror. The acquiror and the joint actors have no current intention to purchase more common shares or warrants other than in connection with the loan agreement. However, the acquiror and the joint actors reserve the right to formulate other plans or make other proposals and take such actions with respect to their investment in the issuer. Depending on market conditions and other factors, the acquiror and/or the joint actors may acquire additional securities of the issuer as the acquiror and/or the joint actors deem appropriate, whether in open market purchases, privately negotiated transactions or otherwise. The acquiror and joint actors may dispose of some or all of such securities. The acquiror and the joint actors may also reconsider and change their plans or proposals relating to the foregoing.
This press release is issued pursuant to early warning requirements of National Instrument 62-104 and National Instrument 62-103, which also requires a report to be filed with regulatory authorities in each of the jurisdictions containing additional information with respect to the foregoing matters. A copy of the early warning report will be available under the company’s SEDAR profile.
