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RNC Minerals to cut debt service costs with new US$13M financing facility

RNC Minerals entered a US$13 million bridge financing facility, which will eliminate majority of the company's debt repayment commitments during this year, it said May 31.

Funds will be used to repay the existing senior secured gold and nickel loans, prepay its current loan facility with Pala Investments Ltd. and acquire Pala's 2.25% royalty on nickel production from the Beta Hunt gold-nickel mine in Western Australia.

The company noted that total debt service costs under the new facilities will be reduced to less than US$250,000 per month, from the current levels of about US$1.5 million per month.

The US$13 million facility with Auramet International LLC is due May 15, 2019, and is repayable from a proposed sale of the Beta Hunt mine and equity raisings including the minimum C$6 million placement announced the same day.

A syndicate of agents will sell at least 40.0 million units of the company at 15 Canadian cents per unit to raise at least C$6.0 million. Each unit will include 1 common share and 1 purchase warrant, exercisable for 30 months at 21 cents apiece for an additional share.

The offering is expected to close June 14.