AIMCo invests $45M in Ikkuma Resources

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By Ted Liu

Ikkuma Resources Corp. (TSX-V: IKM) has completed a financing with Alberta Investment Management Corporation (AIMCo), providing for a $45.0 million second lien senior secured term loan, which bears annual interest at 7.25% and matures on March 31, 2022.

Ikkuma has issued warrants, for no additional consideration, to purchase common shares of Ikkuma to AIMCo, entitling AIMCo to acquire up to 6,750,000 common shares for a period of three years, at an exercise price of $0.86 per share.

Desjardins Securities Inc. acted as financial advisor to the Corporation with respect to the Second Lien Facility and was paid a fee equal to 1% of the principal amount of the Second Lien Facility.

The proceeds from the Second Lien Facility were made available in a single draw and amounts borrowed under the Second Lien Facility that are repaid or prepaid will not be available for re-borrowing.

Net proceeds from the Second Lien Facility will be used to pay down all outstanding indebtedness under the Credit Facilities resulting in approximately $10 million of cash deposits and an undrawn $25 million Credit Facilities.

In conjunction with the approvals for the Second Lien Facility, Ikkuma entered into an Amended and Restated Credit Agreement with respect to its existing credit facilities with its banking syndicate, comprised of The Toronto-Dominion Bank and Alberta Treasury Branches as joint bookrunners, whereby the borrowing base was re-determined at $25.0 million and the maturity date was extended to May 31, 2019. A financial covenant was added, being a debt to EBITDA ratio not to exceed 4.0x on a rolling four quarter basis, beginning on June 30, 2017. The Second Lien Facility is subject to the same financial covenant.

Ikkuma Resources Corp. is a diversified junior public oil and gas company, with holdings in both conventional and unconventional projects in Western Canada.

“AIMCo is very pleased to have an opportunity to increase our investment in Ikkuma Resources, on behalf of our clients, by way of this strategic financing relationship,” stated Peter Pontikes, Executive Vice-President, Public Equities of AIMCo. “AIMCo enjoys a strong working relationship with Ikkuma’s accomplished management team, and we have great confidence in their ability to most effectively utilize this investment to navigate current challenges facing the market, while also positioning the company for future growth.”

Tim de Freitas, President and CEO of Ikkuma Resources Corp. commented “Having a large sophisticated Alberta-based Institutional Investor alongside Ikkuma is a privilege. AIMCo, has supported Ikkuma from its inception several years ago, and continues to share Ikkuma’s view of long term value creation within Alberta’s prolific foothills reservoirs. This investment increases the Corporation’s liquidity and allows it to pursue its exciting new light oil discovery, through 2017 and beyond.”

photo credit: Ikkuma Resources Corp.