Rubicon Minerals entered into an agreement to extend the maturity of its existing secured loan facility by one year to Dec. 31, 2021.
On Dec. 20, 2018, CPPIB Credit Investments transferred its then $12 million secured loan facility with Rubicon to Sprott Private Resource Lending, with certain concurrent amendments agreed between Sprott and Rubicon. As consideration for amendments reflected in the loan facility, on Dec. 20, 2018, Rubicon issued 800,000 warrants to Sprott, which expire on Dec. 31, 2020 and have an exercise price of $1.35 per share.
Sprott and Rubicon agreed to extend the maturity date of the loan facility by one year to Dec. 31, 2021 subject to certain other amendments and conditions.
As of June 1, the outstanding principal under the amended loan facility is $14.2 million, reflecting accrued, deferred and capitalized interest on the original principal to such date, offset by a nominal prepayment of principal. Under the amended loan facility, the interest rate will remain at 5% per annum until Dec. 31, 2020, and thereafter will increase in two scheduled increments, resulting in an average interest rate to maturity of 9% per annum.
As consideration for the extension of the maturity date and related other amendments in the amended loan facility, Rubicon will pay down $43,909.91 of the principal amount of the loan and will pay Sprott two interest premium payments of $355,000. The first such payment will be made on or before June 16, 2020 by issuance of 217,791 common shares of Rubicon priced at $1.63, being the closing price on the TSX on May 29, subject to TSX approval. The second payment will be in cash on the earlier of repayment of the amended loan facility and Dec. 31, 2020.
“The completion of the feasibility study is an important milestone for the shareholders of Rubicon and we remain acutely focused on completing the feasibility study for the Phoenix Gold Project, which remains on schedule for delivery in H2/2020,” George Ogilvie, P.Eng. president and CEO of Rubicon, said. “The extension of repayment of our obligations under the amended loan facility to December 31, 2021 provides the company with greater financial flexibility to pursue its long-term funding requirements without the need for an equity financing at the current time. We currently have $13.5 million in cash at this time and are fully-funded to undertake our budgeted exploration program for 2020 and into 2021. The amended loan facility is effectively a bridge facility towards a longer and more permanent capital structure to fund the anticipated capital program to be defined by the feasibility study. We would like to thank the team at Sprott for their continued support of Rubicon and the Phoenix Gold Project.”
Rubicon Minerals is a gold exploration company that owns the Phoenix Gold Project located in the Red Lake gold district in northwestern Ontario, Canada.