First Bauxite received an additional financing facility under a third bridge loan agreement with Resource Capital Fund VI, which will provide the company with $8 million operating loan facility and an additional $2 million loan.
The larger loan will be used to finance First Bauxite’s Bonasika Project and its bauxite mining and beneficiation plant in Guyana. The loan will be available in multiple advances in accordance with First Bauxite’s cashflow forecast. The smaller loan will be used to fund First Bauxite’s redemption of its fractional shares pursuant to the arrangement between RCF VI, Resource Capital Fund V and First Bauxite announced on October 19, 2018, as well as to pay First Bauxite’s costs and expenses in connection with said arrangement.
Once the arrangement becomes effective, the RCF Funds become the sole shareholders of the company and own 100% of the company’s common shares, which will be consolidated on the basis of one (1) post-consolidation common share for one hundred million (100,000,000) pre-consolidation common shares. After the consolidation, those shareholders of the company who would end up holding less than one whole post-consolidation common share will have their fractional post-consolidation common share purchased by First Bauxite at a price of $0.04 for each pre-consolidation common share held.
The company will seek shareholder approval for the arrangement at a special meeting of shareholders to be held in Toronto on Friday, December 7, 2018.
First Bauxite and RCF VI had previously established a $5 million bridge loan facility on January 23, 2018 and a $10 million bridge loan facility on June 14, 2018. All three loan facilities will mature on January 23, 2019.
First Bauxite may pay or prepay the loan facilities in whole or in part at any time prior to the maturity date without penalty or premium. Interest will accrue at a rate equal to 10.0% per annum, which will immediately be increased by 3.5% annually in the event of a default.
