Nautilus Minerals received a loan from Deep Sea Mining Finance in the principal amount of $500,000 under a previously announced loan agreement between the company, two of its subsidiaries and the lender which provides for a secured structured credit facility of up to $34 million.
In connection with the loan, the company issued an additional 2,147,766 warrants to the lender. Each such warrant entitles Deep Sea to purchase one common share of Nautilus at a price of C$0.17 for a period of five years from the date of issuance of the warrant.
To date, the company has issued a total of 63,896,044 share purchase warrants to the lender in connection with loans totaling $14.875 million. Pursuant to the loan agreement, share purchase warrants are issued on the basis of one warrant for each $0.2328 of principal amount of loan advanced.
The company may draw loans under the loan agreement on a monthly basis, which shall bear interest at 8% per annum, payable bi-annually in arrears. Advances of loans are subject to, among other things, the lender’s ongoing review and approval of the company’s monthly operational budget. All loans have a maturity date of January 8, 2019. 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 will be used to fund the company’s working capital requirements and enable Nautilus 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 approximately $350 million required to complete the development of the Solwara 1 Project.
The lender is a private company owned 50% by each of: USM Finance, a wholly owned subsidiary of USM Holdings, an affiliate of Metalloinvest Holding (Cyprus), and Mawarid Offshore Mining, a wholly-owned subsidiary of MB Holding.
