Nautilus provides funding update
January 11 2018 - 6:06AM
Nautilus Minerals Inc. (TSX:NUS) (OTC:NUSMF) (the
"Company" or
"Nautilus")
announces that it continues to arrange bridge loans from Deep Sea
Mining Finance Ltd. (the
"Lender"), which are
expected to form part of a larger secured structured credit
facility of up to US$34 million to be provided by the Lender to the
Company.
In conjunction with initial advances under the
bridge loans, the Company has issued to the Lender an additional
8,591,065 warrants of the Company (the
"Warrants"), for a total of 11,812,714 share
purchase warrants issued to the Lender to date. Each 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.
The bridge loans, which the Company expects to be
in the amount of up to US$7 million, will assist the Company's
immediate working capital requirements and facilitate payments
required to continue the development of the Company's seafloor
production system to be first utilized at the Company's Solwara 1
Project. The loans bear interest at 8% per annum, payable
bi-annually in arrears with a one year maturity date.
The Company will be entitled to pre-pay each loan
prior to maturity, by paying 108% of the outstanding principal of
the loan plus accrued and unpaid interest. Each loan will be
represented by a promissory note and will initially be secured
against the assets of the Company through a general security
agreement. The Lender may subsequently require the loan to be
guaranteed by the Company's material operating subsidiaries and
secured against the assets of such subsidiaries.
There can be no assurance that the Company will be
successful in concluding the larger credit facility transaction or
that any further funding will be secured by the Company.
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
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 MI 61-101
Protection of Minority Security Holders in Special Transactions
("MI 61-101"). The transactions comprising the
bridge loans and the Warrants will be 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 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. Failure to secure
the necessary financing may result in the Company undergoing
various transactions including, without limitation, asset sales,
joint ventures and capital restructurings.
The Company will provide further updates as
circumstances warrant.
Links
http://www.nautilusminerals.com/irm/PDF/1950_0/Nautilusarrangesbridgeloansandsignsnewfundingmandate
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 bridge loans and enter into a credit facility, 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).