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Royal Nickel Corp
Symbol C : RNX
Shares Issued 358,784,424
Close 2018-05-31 C$ 0.17
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Royal Nickel secures $13M (U.S.) financing with Auramet

2018-05-31 16:25 ET - News Release

Mr. Mark Selby reports


Royal Nickel Corp. has entered into a $13-million (U.S.) bridge financing facility with Auramet International LLC due May 15, 2019. The facility will eliminate the majority of debt repayment commitments during 2018.

Mark Selby, president and chief executive officer of Royal Nickel Minerals, said: "The facility is a critical step in repositioning RNC's central strategic focus onto the advancement of the Dumont nickel-cobalt project, which contains the world's largest undeveloped reserves of both cobalt and nickel. The facility provides tremendous balance sheet support and flexibility by eliminating the bulk of our debt repayments until May, 2019, which will allow us to unlock significant capital during this period in three ways: by maximizing value from the Beta Hunt gold-nickel mine sale process, maximizing investments for Dumont that result from current discussions with potential strategic investors and accessing up to $12-million (U.S.) of undeployed capital in April, 2019, from our joint venture with Waterton. With our balance sheet being addressed and the Beta Hunt mine sale process well under way, our team looks forward to focusing all of its efforts on advancing and achieving a market rerating for Dumont, one of the world's leading battery metals projects and one of the few large-scale, shovel-ready base metal projects."

Auramet -- bridge financing facility

The $13-million (U.S.) facility with Auramet, due May 15, 2019, is repayable from certain capital raising events, including on a sale of the Beta Hunt mine (the first $5-million (U.S.) of net cash proceeds and 50 per cent of net cash proceeds in excess of $5-million (U.S.) will be applied to prepay the facility) and on an equity raise (50 per cent of net proceeds in excess of $8-million (Canadian) of the Royal Nickel offering announced on today's date and 50 per cent of net proceeds in excess of $5-million (Canadian) of subsequent equity raises will be applied to prepay the facility). The prepayment provisions will allow Royal Nickel to pay down the facility as rapidly as possible.

Proceeds from the facility will be used to repay the existing senior secured gold loan and senior secured nickel loan and cover interest payments and fees for the facility.

One hundred seventy-five gold ounces per month will be payable in interest and will be reduced pro rata for any prepayment made against the principal on the facility. The interest cost is in line with the increased loan balance of $13-million (U.S.), as compared with the current $8.6-million (U.S.) facility with a 115-ounce monthly gold coupon. The ability to prepay under the new facility is an improvement on the fixed gold coupon of the existing facility. Total debt service costs under the new facilities will be reduced to less than $250,000 (U.S.) per month from the current levels of approximately $1.5-million (U.S.) per month.

The completion of this Auramet debt extension is subject to certain conditions, including completion of the equity raise announced by Royal Nickel on today's date. Royal Nickel will pay to Auramet a $500,000 (Canadian) amendment fee in connection with this extension, to be satisfied in Royal Nickel shares issued at the same price as the shares to be issued by Royal Nickel on completion of the equity raise announced by Royal Nickel on today's date.

Pala Investments Ltd. loan facility

Royal Nickel has also reached agreement with Pala Investments to: (i) prepay, subject to certain conditions, its current Pala loan facility (with 25 per cent of net proceeds in excess of $8-million (Canadian) of the Royal Nickel offering announced on today's date and 25 per cent of net proceeds in excess of $5-million (Canadian) of subsequent equity raises), which, as required, would allow a more rapid paydown of the Pala loan facility; and (ii) acquire Pala's 2.25-per-cent royalty on nickel production from Beta Hunt (commencing in April, 2019). This agreement with Pala is subject to the completion of the Auramet debt restructuring.

About Royal Nickel Corp.

Royal Nickel is a multiasset mineral resource company with a portfolio of gold and base metal production and exploration properties. Royal Nickel's principal assets are the producing Beta Hunt gold and nickel mine in Western Australia, a 50-per-cent interest in a nickel joint venture with Waterton that holds the Dumont nickel project in the Abitibi region of Quebec and a 29-per-cent stake in the producing Reed mine in the Flin Flon-Snow Lake region of Manitoba, Canada. Royal Nickel also owns a 42-per-cent interest in Orford Mining Corp., a mineral explorer focused on highly prospective and underexplored areas of Northern Quebec and the Carolina gold belt in United States. Royal Nickel has a strong management team and board with over 100 years of mining experience at Inco and Falconbridge.

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