Nautilus Minerals Inc. (TSX:NUS) (OTC:NUSMF) (the
"
Company" or "
Nautilus")
announces that it has entered into a Funding Mandate Agreement (the
"
Agreement") with Deep Sea Mining Finance Ltd.
("
DSMF") pursuant to which DSMF will seek to
leverage the international expertise and financial relationships of
Nautilus' two major shareholders to assist in advancing the
development of the Company's Solwara 1 Project.
As previously disclosed, Mark P. M. Horn will
lead DSMF, which is a newly incorporated private company in the
British Virgin Islands and intended to be 50% owned by each of: (i)
USM Finance Ltd, a wholly-owned subsidiary of USM Holdings Ltd, an
affiliate of Metalloinvest Holding (Cyprus) Limited
("Metallo"); and (ii) Mawarid Offshore Mining Ltd.
("Mawarid"), a wholly-owned subsidiary of MB
Holding Company LLC.
DSMF has been appointed as the Company's
exclusive financial advisor in respect of the remaining project
financing of up to US$350 million to complete the development of
the Solwara 1 Project.
The Company may terminate DSMF's exclusivity
rights under the Agreement if DSMF fails to arrange binding
commitments in respect of financings of at least US$50,000,000 (the
“Interim Financing”) by December 4, 2017.
The Company will pay the following to DSMF:
- an initial retainer fee of US$75,000 upon DSMF securing the
Interim Financing, and an additional fee of US$30,000 to be made
following the initial six month period in advance of each three
month period during the term of the Agreement (collectively, the
"Retainer Fees").
- subject to DSMF securing the Interim Financing, the Company
will make a lump sum payment of US$350,000 as reimbursement for
costs and expenses of DSMF incurred in connection with the Interim
Financing (the "Expense Reimbursement"), and the
Company will reimburse DSMF for all of its reasonable costs and
expenses which may be incurred in connection with subsequent
financings.
- a cash fee on the aggregate consideration received by the
Company in a funding transaction equal to 6% in respect of equity
financings, or 5% in respect of any debt financing, trade financing
or other form of funding transaction during the term of the
Agreement, and for a period of twelve months following its
cancellation in respect of investors introduced to the Company by
DSMF (the "Finder Fees"). No fees will be payable
in respect of any funds provided by DSMF or its affiliates
(including Metallo and Mawarid).
- a cash fee equal to 1.0% of the amount raised by the Company in
a funding transaction arising from an unsolicited investment
proposal received from a third party pursuant to the terms of the
Agreement (together with the Finder Fees, the "Financing
Fees").
DSMF will have a right of first refusal in
respect of matching any unsolicited investment proposals.
The Agreement will remain in effect until the
earlier of January 1, 2019, or until terminated by: (a) mutual
agreement; (b) the termination of DSMF's exclusivity rights
pursuant to the Agreement; (c) automatically upon the closing of
funding transactions of US$350 million; or (d) upon a sale of the
Company.
As DSMF will be controlled by two insiders of
the Company, DSMF is a "related party" of the Company and the
transactions contemplated by the Agreement constitute a "related
party transaction" of the Company under MI 61-101 Protection of
Minority Security Holders in Special Transactions ("MI
61-101").
The independent committee of directors of the
Company, consisting of Russell Debney, determined that entering
into the Agreement was exempt from the formal valuation and
minority shareholder approval requirements of MI 61-101 in reliance
on the exemptions set forth in sections 5.5(a) and 5.7(1)(a) of MI
61-101, on the basis that, at the time the transaction was agreed
to, neither the fair market value of the subject matter of, nor the
fair market value of the consideration for, the Agreement including
the Retainer Fees and the Expense Reimbursement (but excluding the
Financing Fees), exceed 25% of the Company's market
capitalization.
Payment of Financing Fees by the Company to DSMF
will remain subject to receipt of all necessary shareholder
approvals in compliance with the requirements of MI 61-101 and/or
TSX rules in the context of a specific future financing transaction
which may trigger the requirement to pay Financing Fees pursuant to
the Agreement.
A copy of the Agreement will be available under
the Company's profile on the SEDAR website (www.sedar.com).
The Agreement remains subject to receipt of all
necessary approvals from the TSX.
The Company requires significant additional
funding in order to complete the build and deployment of the
seafloor production system to be utilized at the Solwara 1 Project
by the Company and its joint venture partner (as to 15%), the
Independent State of Papua New Guinea’s nominee.
There can be no assurances that the Company will
be successful in securing the necessary additional financing
transactions within the required time or at all, including in
connection with the Agreement. Failure to secure the necessary
financing may result in the Company undergoing various transactions
including, without limitation, asset sales, joint ventures and
capital restructurings.
Termination of the 2016 Bridge Financing
Agreement
In conjunction with entering into the Agreement,
the Company, Metallo and Mawarid entered into an agreement to
terminate the subscription agreement among the Company, Metallo and
Mawarid dated August 21, 2016, as amended (the "Bridge
Financing Agreement"). As a result, no further amounts may
be drawn by the Company under the Bridge Financing Agreement. The
Company issued a total of 78,247,462 common shares for gross
proceeds of US$12,000,000 under the Bridge Financing Agreement.
For inquiries relating to the Interim Financing
please contact:
Mark P. M. Horn |
|
|
Hussein Al Tamimi |
|
|
Inessa Krasnokutskaya |
|
|
Michael Joyner |
|
|
Noreen Dillane |
(UK) |
|
|
(Middle
East) |
|
|
(Europe) |
|
|
(North
America) |
|
|
(Australia) |
Tel:+44 7886 776 234 Email:
mark@horn.co.uk |
|
|
Tel:+ 971 4 709 1901 |
|
|
Tel:+35 725 206 000Email:
inessak@usm-group.com |
|
|
Tel:+1 416 551
1100Email:investor@nautilusminerals.com |
|
|
Tel:+61 7 3318 5552Email:
investor@nautilusminerals.com |
For other information please refer to
www.nautilusminerals.com or contact:
Investor Relations
Nautilus Minerals Inc. (Toronto) Email:
investor@nautilusminerals.com Tel: +1 416 551 1100 |
|
Links:
http://www.nautilusminerals.com/irm/PDF/1924_0/Nautilusprovidescorporateupdate
http://www.nautilusminerals.com/irm/PDF/1925_0/NautilusMineralsResignationofMarkPMHornasaDirector
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 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 and that agreements with third party
contractors for building slots within certain timeframes are not
secured as required. As the Company has not completed an economic
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 29.3% interest and Metalloinvest, the largest iron ore
producer in Europe and the CIS, which has a 18.5% holding (each on
a non-diluted basis, excluding loan shares outstanding under the
Company’s share loan plan).