Ely Gold Royalties has conditionally accepted an agreement with 2176423 Ontario, a company controlled by Eric Sprott, providing Ely with a C$6 million ($4.52 million) revolving line of credit.
The line of credit is available to the company as and when required until its maturity date, November 29, 2021. Interest on principal outstanding under the LOC will bear interest at 10.0% per annum, with undrawn amounts of the LOC carrying a stand-by fee of 2.5% per annum, compounded monthly and payable quarterly. The LOC is secured by a registered security interest over all of the company’s assets, subordinate only to existing prior encumbrances.
Ely Gold expects to use the proceeds of the LOC principally for the acquisition of additional producing or near-term producing royalties as well as to prioritize its long-term capital management.
Ely Gold Royalties is a Vancouver-based, emerging royalty company with development assets focused in Nevada and Quebec.