Brian Zinchuk is editor and owner of Pipeline Online
SASKATOON – Helium explorer Royal Helium is getting the money in place to transform from an explorer to a producer.
On Nov. 22, Saskatoon-based Royal Helium Ltd. announced it had executed a term sheet with an arm’s length lender to provide a USD $20 million three-year credit facility. In accordance with the term sheet, an initial draw on the facility in the amount of USD $10 million will be advanced to the company upon closing, which is anticipated to occur on or about December 12, 2022. Proceeds will be used for development and production facilities at the Steveville helium field in Alberta, Canada, to begin purchases for Royal’s production facilities in Saskatchewan, and for general corporate purposes.
Jeff Sheppard, the chief financial officer of Royal said in a release, “This project financing, once closed, covers the remaining costs for the Alberta processing plant, allowing Steveville to begin helium deliveries to our off-take partners by April 2023. The credit facility further allows us to begin procurement for our Saskatchewan processing plants at Climax. This credit facility enables the completion of our plant and equipment and our first sales without the reliance on the equity markets.”
Amounts drawn under the facility are subject to 14 per cent per annum interest. In consideration for the grant of the facility, the company has agreed to pay the lender a 5 per cent structuring fee and to issue share purchase warrants equal to 9.90 per cent of the issued share capital of the company at closing, each such warrant exercisable into one common share at a price of CAD $0.35 per common share for a three-year period. Royal will have the right to voluntarily repay, at any time, the principal amount plus interest subject to a minimum interest amount. The facility will be secured by a first charge on the Company’s assets pursuant to a general security agreement and will be subject to customary loan covenants.
Hannam & Partners (UK) acted as financial advisors to the company in this transaction. Completion of the credit facility and issuance of the warrant consideration is subject to execution of a definitive agreement and TSX Venture Exchange and regulatory approvals.
- 0037 TED_DEEP_30_
- 0036 Prairie Lithium - Chad Glemser 30 Sec
- 0035 TED - Whitecap
- 0034 TED_NA Helium 2021
- 0033 Buffalo Potash Jared Small Footprint
- 0032 IWS Summer hiring rock trailer music
- 0029 Latus Viro updated Latus phone
- 0027 TED_NA Helium 2021_30
- 0025 Kendalls
- 0026 Buffalo Potash Quinton Salt
- 0023 LC Trucking tractor picker hiring mix
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0019 Jerry Mainil Ltd hiring dugout
- 0018 IWS Hiring Royal Summer
- 0014 Buffalo Potash What if PO
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0006 JK Junior
- 0004 Royal Helium PO Ad 02