Nautilus Minerals Inc. (TSX:NUS)
(OTC:NUSMF)
(Nasdaq Intl Designation) (the
"
Company" or "
Nautilus")
announces that it has entered into a loan agreement with Deep Sea
Mining Finance Ltd. (the "
Lender") formalizing the
previously disclosed secured structured credit facility of up to
US$34 million.
The Company, and its wholly-owned subsidiaries
Nautilus Minerals Niugini Limited ("NMN") and
Nautilus Minerals Pacific Pty Ltd. ("Nautilus
Pacific"), entered into the loan agreement with the Lender
(the "Loan Agreement"), pursuant to which the
Company may continue to receive secured loans from the Lender 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 US$350 million required to
complete the development of the Solwara 1 Project.
Pursuant to the Loan Agreement, the Company may
draw loans, on a monthly basis, which shall bear interest at 8% per
annum, payable bi-annually in arrears. Advances of loans will be
subject to, among other things, the Lender's ongoing review and
approval of the Company's monthly operational budget.
To date the Company has received bridge loans
from the Lender in the aggregate principal amount of US$11,250,000.
These existing loans have now become loans made under, and subject
to the terms of, the Loan Agreement, leaving up to US$22,750,000 in
additional loans that may be advanced under the Loan Agreement. All
loans have a maturity date of January 8, 2019 (being one year after
the date that the first bridge loan was made).
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 secured against the assets of the
Company through a general security agreement granted by the Company
in favour of the Lender, along with a pledge of all the shares held
by the Company in its subsidiary NMN.
NMN has guaranteed a portion of the loans
(equivalent to the amount of the loans invested towards the Solwara
1 Project) and, in support thereof, NMN has granted to the Lender a
charge over NMN's 85% interest in the Solwara 1 Project, subject to
receipt of applicable Papua New Guinea governmental and other third
party approvals. NMN has also entered into a general security
agreement in favour of the Lender in support of NMN's guarantee.
Nautilus Pacific, a wholly-owned subsidiary of the Company which
holds various intellectual property rights including in relation to
the Solwara 1 Project, has also guaranteed the loans under the Loan
Agreement and, in support thereof, Nautilus Pacific has granted a
security interest to the Lender over such intellectual property
rights, subject to applicable third party approvals.
A copy of the Loan Agreement will be available
under the Company's profile at www.sedar.com.
The Loan Agreement and the transactions
contemplated thereby have been conditionally approved by the
Toronto Stock Exchange.
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 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 loans 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.
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 default under the shipbuilding
contract for the construction of the production support vessel; 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).