RENO, Nev.--(BUSINESSWIRE)-- EMC Metals Corp. (the “Company” or “EMC”) (TSX:EMC.TO - News) is pleased to announce that it today secured a US$2.5M loan facility with Scandium Investments LLC, a company owned by a US private investor group. The proceeds of the loan are intended to extinguish all outstanding financial obligations related to a February 2013 negotiated settlement arrangement securing rights to the Nyngan Scandium Project. In this regard, the Company repaid today US$1.2M in maturing indebtedness on existing debt, and will use the remaining loan proceeds to pay the final A$1.4M installment of the Nyngan settlement payment due June 30, 2014. Completion of these two payments secures 100% ownership of the Nyngan Scandium Project for EMC.
This US$2.5M loan includes a convertible feature, exercisable by either the lender or EMC into an effective 20% joint venture (JV) interest in both the Company’s Nyngan and Honeybugle Scandium Projects, provided certain conditions are met by EMC.
Highlights of the Loan and Convertible Terms;
- 18 month, US$2.5M term loan, principal due on maturity,
- Loan interest rate increases in increments from 4% to 12% p.a. over the loan term,
- Full loan is convertible into an effective 20% JV interest in Nyngan & Honeybugle,
- Conversion at lender’s option, or automatically, when EMC raises US$3M in equity ,
- The 20% JV partner has a carried interest until EMC meets two milestones: (1) filing a Feasibility Study on SEDAR, and (2) receiving a mining license, on either JV property,
- JV partner becomes fully participating on development and build costs thereafter,
- JV partner holds an option to convert 20% JV interest into equivalent value of EMC shares, at market values, rather than participate in construction, and
- The JV partner’s option to convert its project interest to EMC shares is a one-time option, at such time as the partner becomes fully participating on project costs.
The Company is also pleased to announce that it has received a total of C$662,500 in first tranche subscriptions towards its previously announced private placement. In addition, pursuant to the terms of the loan agreement, an affiliate of the lender has subscribed for C$250,000 of the private placement, which would bring the total gross proceeds to C$912,500 upon closing of the first tranche. The company will pay finder’s fees on a portion of the financing. The private placement is subject to TSX review and approval prior to closing.
Mr. George Putnam, CEO of EMC Metals commented:
“We are very happy with the results of these recent financing efforts, and pleased to see a financial resolution to what has been a long and concerted effort to achieve direct ownership of the Nyngan Scandium Project. This transaction does a number of important things for EMC; it fully secures the Nyngan project, ultimately preserves 80% of the project for shareholders, and offers a clear path to a debt-free balance sheet with the JV conversion. This transaction creates a platform that insures new shareholder investments can now go towards building project value and generating progress news. It also brings us a partner that is aligned in helping us through development and ultimately to production, in what we intend to be the world’s first primary scandium mine.”
About EMC Metals
EMC is focused on specialty metals resources and project development, specifically scandium. The Company owns rights to a 100% interest in the Nyngan Scandium Project, in New South Wales, Australia, to be fully secured by a second progress payment to the former owner of A$1.4M on June 30, 2014. EMC’s interest in Nyngan can potentially be reduced to 80% in the future, based on certain current granted option rights. The Company filed a NI 43-101 Measured and Indicated Resource on the Nyngan Project in 2010, and has completed and press released extensive metallurgical test work on the resource. In addition, EMC owns a 100% interest in the Tordal Scandium/REE property in southern Norway, where we continue our exploration efforts, specifically for scandium and REE minerals.
The technical information in this news release has been reviewed by Willem Duyvesteyn, a Qualified Person as defined by National Instrument NI 43-101. Mr. Duyvesteyn is employed by EMC Metals Corp.
For additional information please contact:
EMC Metals Corp.
Investor Relations; (775)-233-7328 or (925) 208-1775 or firstname.lastname@example.org
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein. The securities have not been registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws, and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
This press release contains forward-looking information that does involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements regarding long term prices for scandium, our ability to find and retain qualified management and key technical persons to operate a scandium project, our ability to raise the necessary capital to fund development, construction and operation of a mining project and operations, the short term or long term economic feasibility of scandium production at any of our scandium projects or properties, and in general, statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance. Forward-looking information in this press release is based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice, and by other risk factors disclosed in our public filings. Except as required by law, EMC assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change.