RNC Minerals (TSX: RNX), also known as Royal Nickel Corp, has entered into a US$4 million convertible term debt facility with Pala Investments, a Swiss mining private equity firm. Based in Toronto, RNC is focused on acquiring, exploring and developing base metal and precious metal properties. It said it will use the facility’s proceeds for the on-going ramp-up of the Beta Hunt gold mine in Western Australia and other priorities. Earlier in 2017, RNC teamed up with Canadian private equity firm Waterton Global Resource Management to buy, develop and operate undervalued nickel assets.
Pala Investments Makes US$4 Million Investment into RNC Minerals
TORONTO, Sept. 19, 2017 /CNW/ – RNC Minerals (TSX: RNX) (“RNC”) has entered into a US$4 million 18-month Convertible Term Debt Facility (the “Facility”) with Pala Investments Limited (“Pala”).
Mark Selby, President and CEO, commented, “I am pleased to have this investment by Pala, one of the world’s leading mining private equity groups and an investment leader in the battery materials sector. This investment highlights the position of the Dumont Nickel Project as one of the world’s largest resources of both nickel and cobalt, two key components of the batteries used in the growing electric vehicle market. Dumont is the only fully permitted, shovel ready, large scale nickel and cobalt project located in a low-risk political jurisdiction that could deliver significant volumes of both metals to market this decade.”
Stephen Gill, Pala Investments Managing Partner, commented: “we are pleased to provide funding to RNC as they move towards positive project cash generation. We look forward to working with RNC as part of their broader nickel development and consolidation strategy, including providing strategic and financial support where appropriate.”
The unsecured Facility will bear interest at a rate of 15% per annum payable at the end of the 18-month term. Pala will have the right to convert the debt into RNC shares at a price of C$0.2537 per share (a 25% premium to the RNC share price over a 20-day VWAP), along with certain other conversion rights. As part of the transaction, RNC issued five million warrants to Pala, exercisable for three years at C$0.25 per share.
Proceeds of the Facility will be used for general RNC corporate purposes and to fund the on-going ramp-up of the RNC Beta Hunt gold mine.
About the Dumont Nickel Project
The Dumont Nickel Project is one of the world’s largest undeveloped, permitted and shovel-ready nickel and cobalt sulphide deposits. When in production, Dumont is expected to rank as the fifth-largest nickel sulphide operation in the world by annual production and the largest cobalt mine in North America. It contains the third largest nickel reserve in the world and one of the largest cobalt reserves outside of Africa.
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, a 50% interest in the nickel joint venture with Waterton that holds the Dumont Nickel Project in the Abitibi region of 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.
Pala is a multi-strategy investment company focused on the mining and metals value chain with a strong track record of successful investments and value creation. Pala’s team has extensive experience within the sector and seeks to assist companies in which it has long-term shareholdings by providing strategic advice and innovative solutions in development, production, expansion and turnaround situations. Pala also pursues a range of liquid investment strategies. Pala invests across all geographies and in all mining commodities as well as mining services and consumables. For more information, visit www.pala.com.
For further information: Rob Buchanan, Director, Investor Relations, T: (416) 363-0649, www.rncminerals.com
Photo of Dumont nickel project activity courtesy of Royal Nickel Corp