REG - Amaroq Minerals Ltd - Debt Financing and Potential Iceland Main Listing

Amaroq MineralsAnnouncement

28/03/2023 07:15

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RNS Number : 3855U  Amaroq Minerals Ltd  28 March 2023

("Amaroq" or the "Corporation" or the "Company")

US$49.5m Debt Financing and Potential Main Market Listing in Iceland

US$49.5m cash injection to bring forward production and cash flow generation
at Nalunaq

 

TORONTO, ONTARIO - 28 March, 2023 - Amaroq Minerals Ltd. (AIM, TSXV, NASDAQ
First North: AMRQ), an independent mine development company with a substantial
land package of gold and strategic mineral assets covering an area of
7,866.85 km(2) in Southern Greenland, is pleased to announce that it has
agreed non-binding heads of terms, subject to final documentation, for US$49.5
million in debt financing (the "Financing") to accelerate production and cash
flow generation at its cornerstone Nalunaq gold development project.

 

Highlights

·    Amaroq has signed non-binding term sheets for a US$49.5 million
senior secured financing package consisting of:

o  US$18.5 million Senior Debt Revolving Credit Facility ("RCF") with
Icelandic banks Landsbanki and Fossar Investment Bank, with a two year term
and interest at the Secured Overnight Financing Rate (SOFR) plus 950bps. The
RCF has a 2% arrangement fee and a 0.4% commitment fee on unutilised amounts.

o  Up to US$21 million Syndicated Convertible Notes ("Convertible Note") with
an affiliate of ACAM LP, JLE Property Ltd, Livermore Partners and First Pecos
with a four year term, payment-in-kind interest of 5% per annum and a
conversion price of 42 pence/share.

o  ACAM LP's main investors are the majority ultimate beneficial owners of
GCAM LP.

o  US$10 million, two year Cost Overrun loan by JLE Property Limited on the
same terms as the Convertible Note, plus a 2.5% commitment fee on unutilised
amounts, to insure against any potential unexpected cost increases.

·    The Financing, together with existing capital, is expected to enable
the transition from the bulk sample stage to trial mining, processing and
production of gold doré on site at Nalunaq in a staged approach, ahead of
full-scale production.

o  The Company intends to utilise the Financing to accelerate the phased
construction and ramp-up of the 300tpd processing plant and associated
infrastructure contemplated in 2020. This decision is enabled by positive
results on the Nalunaq orebody, published in December 2022, with improved
grade at Nalunaq, confirmation of the Dolerite Dyke Model for predicting
high-grade mineralisation and Halyard's third-party engineering study
completed in 2021. The Company intends to leverage its already engineered and
manufactured components of the processing plant that have been purchased and
have a carrying value of US$8.5 million.

o  Amaroq retains a prudent and diligent approach to commencing trial mining
activities at Nalunaq, and plans to derisk the project in a staged approach,
including rehabilitating existing mining areas, extending exploration
activities and converting current mineral resources ahead of commencing
full-scale production.

·    A Letter of Intent has been agreed with THYSSEN SCHACHTBAU GMBH on
the underground development and Halyard will be the partner in the staged
construction of the processing plant. Halyard is very familiar with the
project as the partner for the third-party engineering study for the
processing plant and surface infrastructure, and contractors of choice for the
next development phase of Nalunaq.

·    Amaroq will finalise the Financing's legally binding documentation
and expects to be in a position to sign binding documents within the next
three months.

·    Alongside the Financing, with a defined path to cashflow, and strong
Icelandic investor support, Amaroq today announces its intention to explore
the possibility of a main market listing on Iceland's Nasdaq Exchange and will
update on progress and timing in due course.

·    Additionally, further to its announcement on 19 January 2023, Amaroq
continues to progress towards the closing of the joint venture transaction
with GCAM LP (the "GCAM Transaction"), announced on 10 June 2022, in which
GCAM LP subscribed £18,000,000 (US$22,000,000) for shares in the strategic
minerals JV Gardaq ApS, representing 49% of its issued shares. Written
approval by the Government of Greenland pursuant to section 88(1) of the
Mineral Resources Act of the transfer of the Initial JV Company Licences has
been received and those licences have been transferred by Nalunaq A/S to
Gardaq ApS. The Company expects to satisfy the remaining escrow conditions,
and to complete the GCAM Transaction, before 30 April 2023.

 

Eldur Olafsson, CEO of Amaroq, commented:

"We are very pleased to have successfully arranged this US$49.5 million debt
package in addition to our available cash in treasury of US$34 million, to
unlock near-term value in the Gold side of our Company. Alongside the $22
million we have secured with GCAM for exploration over our Strategic Metals
portfolio, Amaroq has a very exciting future in front of it.

The Financing will enable the transition of activities at Nalunaq from the
mining of the Bulk sample and potential toll treatment of ore to the extension
of exploration activities, delivering a mineral reserve, and commencing trial
mining and ore processing on site prior to starting commercial production.

I would like to thank our investors and debt funding partners for the
confidence they have shown in Amaroq and Nalunaq, our flagship gold asset in
Greenland, and I look forward to providing more details on the project plans
and timescales later this year."

 

Related Party Transaction

Fossar Investment Bank and Livermore Partners LLC are related parties of
Amaroq. Fossar Investment Bank is a company in which Sigurbjorn Thorkelsson,
Non-Executive Director of the Company, is Chairman of the Board and indirectly
controls over 30% of the capital. Livermore Partners LLC is company in which
David Neuhauser, Non-Executive Director of Amaroq Minerals, is Managing
Director.

Following completion of the GCAM Transaction, ACAM LP will (through GCAM LP)
own a 49% interest in Gardaq ApS, an Amaroq subsidiary, and have the right to
appoint two directors to the subsidiary company board. As such, following
completion of the GCAM Transaction, ACAM LP will be a related party of the
Company.

As such, the elements of the Financing with Fossar Investment Bank (US$1
million), Livermore Partners LLC (US$1 million), and ACAM LP (US$16 million)
constitute a Related Party Transaction in accordance with AIM Rule 13.

The Independent Directors, being the Amaroq Directors other than Sigurbjorn
Thorkelsson and David Neuhauser, having consulted with the Company's Nominated
Adviser, are confident that the terms of the Financing with related parties
are fair and reasonable insofar as the Company's shareholders are concerned.

 

Enquiries:

Amaroq Minerals Ltd.

Eldur Olafsson, Executive Director and CEO

+354 665 2003

eo@amaroqminerals.com

 

Eddie Wyvill, Investor Relations

+44 (0)7713 126727

ew@amaroqminerals.com

 

Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)

Callum Stewart

Varun Talwar

Simon Mensley

Ashton Clanfield

+44 (0) 20 7710 7600

 

Panmure Gordon (UK) Limited (Joint Broker)

John Prior

Hugh Rich

Dougie Mcleod

+44 (0) 20 7886 2500

 

SI Capital Limited (Joint Broker)

Nick Emerson

Charlie Stephenson

+44 (0) 1483 413500

 

Camarco (Financial PR)

Billy Clegg

Elfie Kent

Charlie Dingwall

+44 (0) 20 3757 4980

 

For Company updates:

Follow @Amaroq_minerals on Twitter

Follow Amaroq Minerals Inc. on LinkedIn

 

Further Information:

About Amaroq Minerals

Amaroq Minerals' principal business objectives are the identification,
acquisition, exploration, and development of gold and strategic metal
properties in Greenland. The Company's principal asset is a 100% interest in
the Nalunaq Project, an advanced exploration stage property with an
exploitation license including the previously operating Nalunaq gold mine. The
Corporation has a portfolio of gold and strategic metal assets
covering 7,866.85km(2), the largest mineral portfolio in Southern Greenland
covering the two known gold belts in the region. Amaroq Minerals is
incorporated under the Canada Business Corporations Act and wholly owns
Nalunaq A/S, incorporated under the Greenland Public Companies Act.

Inside Information

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No. 596/2014 on Market Abuse ("UK MAR"), as
it forms part of UK domestic law by virtue of the European Union (Withdrawal)
Act 2018, and Regulation (EU) No. 596/2014 on Market Abuse ("EU MAR").

 

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