RNC Minerals (TSX: RNX; OTCQX: RNKLF) has closed previously announced US $10 million four-year Senior Secured Convertible Term Debt Facility with Waterton Precious Metals Fund II Cayman, LP and Waterton Mining Parallel Fund Offshore Master, LP.
A one-time 2% structuring fee was paid to Waterton at closing.
The Facility will bear interest at a rate of 10% per annum, payable quarterly. The Facility is convertible at the election of Waterton into shares of RNC at US $0.1912 (CDN $0.2573) per share up to a maximum of 75% of the principal amount (US $7.5 million) or into units of the recently established nickel joint venture that is 50% owned by RNC and 50% owned by Waterton.
The valuation basis for any unit conversion would be RNC’s 50% share of the value of the Dumont project held by the joint venture (100% of which was valued at US $45 million) plus any completed investments that are funded by the US $30 million of committed capital to be utilized by the joint venture for nickel asset acquisitions. After receiving any notice of a unit conversion in excess of US $4.5 million of principal, RNC would have the right to prepay such excess principal amount plus applicable pre-payment fees.
Proceeds will be used to fund the ongoing ramp-up of the Beta Hunt Mine and for general corporate purposes.
Pursuant to the Facility, Waterton has the option to convert 75% of the principal amount of the facility into 39,225,941 shares of RNC. Prior to entering into the Facility, Waterton did not own any securities of RNC. As of the date hereof, the 39,225,941 shares into which the Facility is convertible would represent approximately 12.4% of the outstanding shares of RNC on a partially diluted basis.
RNC Minerals is a multi-asset mineral resource company focused primarily on the acquisition, exploration, evaluation and development of base metal and precious metal properties. RNC’s principal assets are the producing Beta Hunt gold and nickel mine in Western Australia, the Dumont Nickel Project located in the established Abitibi mining camp in Quebec and a 30% stake in the producing Reed Mine in the Flin Flon-Snow Lake region of Manitoba, Canada. RNC also owns a majority interest in the West Raglan and Qiqavik projects in Northern Quebec. RNC has a strong management team and Board with over 100 years of mining experience at Inco and Falconbridge.
Waterton is a leading private equity firm dedicated to developing high quality resource assets in stable jurisdictions. Waterton’s two current active private equity funds, Waterton Precious Metals Fund II and Waterton Parallel Fund closed with capital commitments in excess of US $1.725 billion in 2014 and 2016 respectively.
photo credit: RNC Minerals