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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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ORIGINAL: RNC Minerals Secures US$13 Million Financing

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

RNC Minerals Secures US$13 Million Financing

Canada NewsWire

Eliminates Majority of 2018 Debt Repayments
Critical Step in Repositioning Dumont as Strategic Focus

TORONTO, May 31, 2018 /CNW/ - RNC Minerals (TSX: RNX) ("RNC") announced today that it has entered into a US$13 million bridge financing facility (the "Facility") with Auramet International LLC ("Auramet") due May 15, 2019. The Facility will eliminate the majority of debt repayment commitments during 2018.

Mark Selby, President and CEO of RNC 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 US$12 million 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 re-rating 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 US$13 million 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 US$5 million of net cash proceeds and 50% of net cash proceeds in excess of US$5 million will be applied to prepay the Facility), and on an equity raise (50% of net proceeds in excess of C$8 million of the RNC offering announced on today's date and 50% of net proceeds in excess of C$5 million of subsequent equity raises will be applied to prepay the Facility). The prepayment provisions will allow RNC 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.

175 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 US$13 million, as compared to the current US$8.6 million 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 US$250,000 per month from the current levels of approximately US$1.5 million per month.

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

 Pala Investments Ltd Loan Facility

RNC has also reached agreement with Pala Investments Ltd ("Pala") to (i) prepay, subject to certain conditions, its current Pala loan facility (with 25% of net proceeds in excess of C$8 million of the RNC offering announced on today's date and 25% of net proceeds in excess of C$5 million 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% 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 RNC Minerals
RNC is a multi-asset mineral resource company with a portfolio of gold and base metal production and exploration properties. RNC's principal assets are the producing Beta Hunt gold and nickel mine in Western Australia, a 50% interest in a nickel joint venture with Waterton that holds the Dumont Nickel Project in the Abitibi region of Quebec, and a 29% stake in the producing Reed Mine in the Flin Flon-Snow Lake region of Manitoba, Canada. RNC also owns a 42% interest in Orford Mining Corporation, a mineral explorer focused on highly prospective and underexplored areas of Northern Quebec and the Carolina Gold Belt in United States. RNC has a strong management team and Board with over 100 years of mining experience at Inco and Falconbridge. RNC's common shares trade on the TSX under the symbol RNX. RNC shares also trade on the OTCQX market under the symbol RNKLF.

Cautionary Statement Concerning Forward-Looking Statements

This news release contains "forward-looking information," including without limitation statements relating to the completion of the financing,the liquidity and capital resources of RNC, production guidance and the potential of the Beta Hunt and Reed mines as well as the potential of the Dumont development project and Qiqavik, West Raglan, Jones-Keystone Loflin and Landrum-Faulkner exploration properties.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of RNC to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could affect the outcome include, among others: failure of the parties to sign definitive agreements and satisfy conditions of closing; future prices and the supply of metals; the results of drilling; inability to raise the money necessary to incur the expenditures required to retain and advance the properties; environmental liabilities (known and unknown); general business, economic, competitive, political and social uncertainties; accidents, labour disputes and other risks of the mining industry; political instability, terrorism, insurrection or war; or delays in obtaining governmental approvals, projected cash costs, failure to obtain regulatory or shareholder approvals. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to RNC's filings with Canadian securities regulators available on SEDAR at www.sedar.com.

Although RNC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this news release and RNC disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.


View original content with multimedia: http://www.newswire.ca/en/releases/archive/May2018/31/c4624.html


Rob Buchanan, Director, Investor Relations, T: (416) 363-0649, www.rncminerals.com

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