Laramide Resources Ltd. and its lenders, with Extract Advisors LLC acting as agent for and on behalf of the lenders, have entered into a binding term sheet to amend the terms of the company’s existing $3-million (U.S.) term loan, including, among other amendments (i) extending the maturity date to such date that is four years from the effective date of the amended loan, (ii) advancing additional funds under the amended loan such that the outstanding principal, together with the previously outstanding principal under the loan, will be up to $5-million (U.S.) (with a minimum commitment of $4.5-million (U.S.)), (iii) decreasing the interest rate to 7 per cent per annum, and (iv) providing that the outstanding principal be convertible into common shares of the company at a price of 60 Canadian cents per share. The effective date of the amended loan is anticipated to be Dec. 29, 2017.
Additionally, the company is pleased to announce an offering of unsecured convertible debentures for proceeds of up to $2-million (U.S.). The aggregate proceeds of the amended loan and the debenture will not exceed $6.5-million (U.S.). Each debenture shall bear an interest rate identical to that under the amended loan, and be convertible into common shares of the company at a price of 60 Canadian cents per common share. In addition, for each $100,000 of principal convertible debenture subscribed for under the offering, the subscriber will be issued 20,000 common share purchase warrants. Each warrant will be exercisable for one common share at a price of 75 Canadian cents for a period of three years from the closing date of the offering. In lieu of warrants, the investor can elect to take a commitment fee of 2.5 per cent paid on the closing date of the offering. The offering may include participation by both the public and insiders of the company. The offering is expected to close in January, 2018.
The amended loan and the offering each remain subject to customary conditions including the approvals of the Toronto Stock Exchange and the Australian Securities Exchange, if applicable.
Use of proceeds will be used to make the company’s commitments to Westwater Resources Inc. (formerly Uranium Resources Inc.) related to the Church Rock acquisition, to further advance the Church Rock and Crownpoint projects, and for general corporate purposes.
Marc Henderson, Laramide’s president and chief executive officer, stated: “These financing initiatives significantly improve our balance sheet and financial flexibility and should allow us to return to a more aggressive posture with respect to the development of our asset base in 2018. We believe such an approach is now warranted as the spot uranium market is already visibly improving as a result of the production cutbacks recently announced by certain of the industry’s largest producers, and we expect further material tightening next year as the market finally rebalances. Laramide’s strategy of ownership and development of lower technical risk, low-cost uranium projects in stable political jurisdictions remains unchanged and should benefit from this improving macro environment.”
About Laramide Resources Ltd.
Laramide is a Canadian-based company with diversified uranium assets strategically positioned in the United States and Australia that have been chosen for their low-cost production potential. Laramide’s recently acquired Church Rock and Crownpoint properties form a leading in situ recovery (ISR) division that benefits from significant mineral resources and near-term development potential. Additional U.S. assets include La Jara Mesa in Grants, New Mexico, and La Sal in the Lisbon Valley district of Utah. The company’s Australian advanced stage Westmoreland is one of the largest uranium projects currently held by a junior mining company.