Royal Helium, drilling near Ogema in 2021. Photo by Brian Zinchuk

SASKATOON – Royal Helium Ltd. announced on Dec. 21 that it has signed term sheets with the Business Development Bank of Canada  and a Schedule 1 Bank, acting pari passu for a non-revolving credit facility  in the amount of C$15,000,000. The loans bears interest at a rate of 3.00 per cent above the bank’s prime lending rate. Proceeds of the credit facility will be used for development and production facilities currently under construction for the Steveville helium field in Alberta. The Schedule 1 Bank will also provide a revolving demand operating loan of C$2,500,000 for working capital purposes with a floating interest rate of 2.00 per cent per annum above Prime.

Royal Helium is also announced that it has entered into an agreement with Eight Capital for a $5.5 million bought deal private placement of subscription receipts convertible debenture units (as discussed further below).

Royal Helium chief financial officer Jeff Sheppard said in a release, “We are pleased to have achieved this major milestone of being fully funded to first production, positioning Royal to deliver helium to our space exploration off-take partner in Q2 2023. Securing debt financing in the traditional bank market through a Canadian Schedule 1 bank and BDC at such favourable rates alongside the bought-deal financing not only enhances returns to shareholders but also validates the quality and economics of our Steveville project. Furthermore, this initial project financing will simplify Royal’s access to future production facility construction financing.”

The debt facilities, combined, are subject to a one-time C$87,500 fee and an annual fee of C$6,000. Under a floating rate option, loans drawn on the Credit Facility can be repaid at any time without penalty. The facilities will be secured by a general security agreement and is subject to customary loan covenants.

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    0041 DEEP Since 2018 now we are going to build
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    0040 Southeast College safety tickets
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Completion of the credit facility and operating line is subject to execution of definitive agreements and regulatory approvals and is expected to close in January 2023.

Bought Deal Convertible Debenture Private Placement

Royal Helium is also announced that it has entered into an agreement with Eight Capital, pursuant to which Eight Capital has agreed to purchase for resale, on a bought deal private placement basis, 5,500 non-transferable subscription receipts exchangeable into unsecured convertible debenture units of the company, with a maturity date of Dec. 31, 2025.

The net proceeds of the offering will be used to fund capital expenditures related to the Steveville production facilities and for general corporate purposes.

Royal’s previously announced project financing of US$20 million has been cancelled.

 

  • 0041 DEEP Since 2018 now we are going to build
    0041 DEEP Since 2018 now we are going to build
  • 0040 Southeast College safety tickets
    0040 Southeast College safety tickets
  • 0036 Prairie Lithium - Chad Glemser 30 Sec
  • 0033 Buffalo Potash Jared Small Footprint
  • 0032 IWS Summer hiring rock trailer music
  • 0029 Latus Viro updated Latus phone
  • 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
  • 0011
  • 0006 JK Junior
  • 0004 Royal Helium PO Ad 02
  • 9001
  • 0002