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Northcliff Resources Ltd
Symbol NCF
Shares Issued 214,553,800
Close 2022-06-22 C$ 0.04
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Northcliff arranges $5.95-million in loans with Todd

2022-06-23 12:25 ET - News Release

Mr. Andrew Ing reports

NORTHCLIFF ANNOUNCES AGGREGATE C$5.95 MILLION LOAN FUNDING

Northcliff Resources Ltd. has entered into two secured loan agreements for an aggregate amount of up to $5.95-million with Todd Sisson (NZ) Ltd., a subsidiary of Todd Corp., the company's largest shareholder.

The loan financing will be used to finance the 2022 work program at the Sisson tungsten-molybdenum project, which will include the following planned programs (subject to availability of vendors):

  • Geotechnical drilling and testing program that is designed to provide information on the site characterization and support additional design detail of the tailings storage facility. The phase 1 drilling program will also support other engineering related activities and respond to certain provincial environmental impact assessment (EIA) conditions which are to be complied with prior to the start of construction;
  • Archeological work program to undertake mitigation activities in compliance of EIA conditions;
  • Development of an engagement plan addressing EIA conditions of significance to local first nations.

The company is currently in the process of short-listing potential vendors, reviewing bids and finalizing technical services agreements in conjunction with the planned phase 1 drilling program and phase 1 field program.

The proceeds from the loan financing will also be used to finance the following 2022 corporate activities:

  • Advancing offtake and project finance discussions with interested parties;
  • Continued participation and financing outreach in conjunction with the Critical Minerals Joint Action Plan between Canada and the United States;
  • General working capital purposes.

Loan 1 is a secured loan facility in the amount of $750,000, will bear interest at a rate of 10 per cent per annum and has a term of up to six months, with the interest payable at maturity. The loan and accrued interest are repayable at any time by the company without penalty, but must be settled at the earlier of (a) maturity or (b) from the proceeds of tranche 1 of loan 2.

Loan 2 is a secured loan facility in the amount of $5.2-million, will bear interest at a rate of 10 per cent per annum and can be drawn down in four tranches: tranche 1 -- $2.0-million, tranche 2 -- $1.0-million, tranche 3 -- $1.0-million and tranche 4 -- $1.2-million. Each of the tranche drawdowns is subject to the satisfaction of certain condition precedents and has a term of 12 months with the interest payable at maturity. The loan and accrued interest are repayable at any time by the company without penalty, or can be settled at any time prior to maturity, either through issuances of shares in the company or transfer of part of the company's interest in the Sisson Project LP and its general partner, Sisson Mines Ltd., at the election of Todd. The conversion price used for the share settlement or partnership settlement will be the 30-day volume weighted average share price of the company on the Toronto Stock Exchange, ending on and including the date of the conversion notice with a 35 per cent discount applied, in the case of a share settlement.

Loan 1 is exempt from the formal valuation and disinterested shareholder approval requirements of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (MI 61-101) pursuant to the di minimis exemption contained therein.

Loan 2 is subject to the formal valuation and disinterested shareholder approval requirements under MI 61-101. As such, the valuation of Sisson Project and its general partner, Sisson Mines, is being prepared by SLR Consulting Ltd. The company's extraordinary general meeting (EGM) is scheduled for Aug. 25, 2022, at which the company will seek disinterested shareholder approval of the conversion terms of loan 2. The record date for the EGM is July 20, 2022. The board of the company has recommended that disinterested shareholders approve the conversion terms of loan 2.

The terms of loan 1 and loan 2 are also subject to regulatory approval.

The company has amended the terms of the outstanding $1-million loan facility with Todd that was previously announced on Aug. 30, 2021, such that Todd has the right to convert the 2021 loan concurrently with the closing of any equity capital financing transaction (whether by way of public offering, private placement, rights offering or otherwise) by the company to the extent that the offering closes before the maturity date of any tranche under the 2021 loan. All other terms of the 2021 loan remain unchanged.

Todd currently holds 47.83 per cent of the issued and outstanding shares of Northcliff and an 11.5-per-cent interest in the Sisson Partnership. Northcliff owns an 88.5-per-cent interest in the Sisson Partnership, which owns the Sisson tungsten-molybdenum project.

Andrew Ing, chief executive officer, commented, "We are looking forward to a successful work program that will advance the project towards construction and working collaboratively with the regulator in New Brunswick and first nations".

About Northcliff Resources Ltd.

Northcliff is a mineral resource company focused on advancing the feasibility-stage Sisson tungsten-molybdenum project located in New Brunswick, Canada, to production.

We seek Safe Harbor.

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