Resource Capital Gold Corp. said Dec. 11 that it completed a US$5.5 million senior secured loan facility deal from Sprott Private Resource Lending (Collector) LP, guaranteed by the miner's Maritime Gold Corp., Maritime Dufferin Gold Corp. and Flex Mining & Exploration Ltd. units.
The facility is subject to a 2% additional prepaid interest amount payable on or before the earlier of Jan. 31, 2018, and the closing of an equity financing by Resource Capital, and will bear interest at a rate equal to 9% plus the greater of U.S. dollar 12-month LIBOR and 1% per annum, payable monthly.
Apart from the guarantors, Resource Capital granted security over substantially all of its assets in favor of Sprott and issued the lender 16 million warrants, exercisable in full or in part for a three-year term at 12.5 Canadian cents per Resource Capital share. The facility will mature Dec. 8, 2020, with principal payments to start in December 2018 and to be followed by equal monthly installments thereafter.
The proceeds were used to pay about US$5.6 million to settle a promissory note to LRC-RA LP, with a face value of US$8 million, which Resource Capital used in October 2016 to acquire the Dufferin gold project in Nova Scotia. Resource Capital proposes to service and repay the Sprott facility from the sale of Dufferin's production.
Resource Capital also said it revised a royalty agreement with LRC such that the net smelter interest granted to the latter is now secured and will be payable on any gold mined and shipped from Dufferin starting Jan. 1, 2018.