This was Royal Helium drilling its Climax-4 well. Photo by Brian Zinchuk

SASKATOON – Royal Helium Ltd. announced on Feb. 6 that binding commitment letters have been received and signed with the Business Development Bank of Canada (BDC) and Canadian Western Bank (CWB) acting pari passu for a non-revolving credit facility in the amount of CAD $15 million.  Proceeds of the credit facility will be used for the development and construction of production facilities currently under construction for the Steveville helium field in southern Alberta.

The commitment letter with CWB also includes a revolving CAD $2.5 million demand operating loan to be used for working capital purposes. It is anticipated that the debt facilities will close in February when funds are expected to be drawn down. The facilities are subject to regulatory and exchange approvals.

Royal Helium also announced that following the receipt of the above commitment letters, the remaining conditions have been waived by the debenture holders to release from escrow the aggregate gross proceeds of CAD $5.5 million from the previously closed bought deal private placement of convertible debenture units. The Company expects the release of funds from escrow and issuance of convertible debentures and warrants on or about February 10.

Royal president and CEO Andrew Davidson said in a release, “Securing debt facilities with two leading banking institutions in Canada is a significant milestone in the completion of our first helium production plant. It validates the feasibility and profitability of Royal’s projects. We are grateful for the partnership support of senior lenders at CWB and the BDC and look forward to growing our relationship further with additional production facilities in the near future. Together with the early release of the convertible debentures, the Steveville helium production plant is now fully funded including the working capital required to see first production in the second quarter 2023.”

 

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Whitecap closes three deals, two of which were in Saskatchewan