- Repayment of Senior Secured Metal Prepay Agreement with
Lascaux Resource Capital Fund I, L.P. and elimination of 3%
NSR
- Low-cost working capital facility provides flexibility to
fund on-going gold ramp-up, development and production growth at
Beta Hunt
TORONTO, Oct. 4, 2016 /CNW/ - RNC Minerals (TSX: RNX)
("RNC") is pleased to announce that it has closed a comprehensive
refinancing package with Auramet International LLC ("Auramet") to
fund the repayment of all obligations arising under the Senior
Secured Metal Prepay Agreement with LRC-SLM L.P. (100% owned by
Lascaux Resource Capital Fund I, L.P.) and provide financial
flexibility for the ongoing ramp-up and development of the Beta
Hunt Mine.
"We are pleased to have repaid the Lascaux facility and
eliminated its 3% NSR on gold production from Beta Hunt and
restriction on RNC's access to cash flow. The comprehensive Auramet
financing solution provides near-term operating flexibility (no
repayments until February 28, 2017),
a low cost working capital facility (LIBOR + 4.5%) that will
support our aggressive ramp-up of mine exploration and production,
and significantly more flexibility to lock in near-record
Australian dollar gold prices. We would like to thank Lascaux for
its support of Beta Hunt. We also welcome Auramet's involvement
with the mine, building on its history and knowledge of the
operation," said RNC President & CEO, Mark Selby.
The Auramet financing package is comprised of a US$16.5 million Senior Secured Gold Loan and
US$6.5 million in working capital
facilities (a US$5.5 million
in-process gold facility and a US$1.0
million in-process nickel facility).
US$16.5 Million Senior
Secured Gold Loan
The US$16.5 million Senior Secured
Gold Loan will be repaid by the delivery of 16,800 gold ounces over
a 30 month period commencing on February 28,
2017 (560 ounces per month). RNC also granted call options
to Auramet on 1,000 gold ounces per month, with a strike price of
A$1,900 per ounce (approximately
A$78 per ounce higher than the
all-time Australian dollar gold price and more than A$185 per ounce higher than the closing gold
price on October 3, 2016) and
expiration dates from February 28,
2017 through September 30,
2018.
US$6.5 Million Working
Capital Facilities
Auramet has also agreed to provide US$6.5
million in working capital facilities, comprised of a
US$5.5 million in-process gold
facility and a US$S1.0 million in-process nickel facility. These
facilities bear interest at a rate of LIBOR + 4.5% per annum, and
form part of agreements providing for the purchase by Auramet at
market rates of all gold and nickel produced by Beta Hunt during
the term of the gold loan.
The proceeds from the Auramet refinancing were applied to repay
all outstanding obligations owed under the Lascaux Facility,
resulting in the elimination of the related 3% gold royalty and
other covenants.
As part of the re-financing package, Auramet and RNC have
implemented a forward sale gold price protection program covering
1,300 ounces per month of Beta-Hunt gold production at an average
price of A$1,728 over a 15 month
period commencing in February 2017
and expiring in April 2018,
representing approximately one-quarter of monthly production during
this period. The security granted to Auramet under the Senior
Secured Gold Loan includes a pledge by RNC of its shares in Salt
Lake Mining Pty. (owner of the Beta-Hunt mine) and its shares in
VMS Ventures Inc. (owner of a 30% interest in Reed Lake copper
mine). The Senior Secured Gold Loan is repayable at any time
without penalty.
Haywood Securities Inc. acted as exclusive financial advisor to
the Company in connection with the financing.
About RNC
RNC is a multi-asset mineral resource company focused primarily
on the acquisition, exploration, evaluation and development of base
metal and precious metal properties. RNC's principal assets are the
producing Beta Hunt gold and nickel mine in Western Australia, the Dumont Nickel Project
located in the established Abitibi mining camp in Quebec and a 30% stake in the producing Reed
Mine in the Flin Flon-Snow Lake region of Manitoba, Canada. RNC also owns a majority
interest in the West Raglan and Qiqavik projects in Northern Quebec. 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.
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.
SOURCE RNC Minerals