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Royal Helium says Steveville helium plant is fully funded with execution of binding commitment letters for $17.5M in credit facilities

Published: 08:22 06 Feb 2023 EST

Royal Helium Ltd -
Royal Helium said the remaining conditions have been waived by debenture holders to release from escrow the aggregate gross proceeds of C$5.5 million from the previously closed bought deal private placement

Royal Helium Ltd (TSX-V:RHC, OTCQB:RHCCF) told investors it has received and signed binding commitment letters with the Business Development Bank of Canada (BDC) and Canadian Western Bank (CWB) acting pari passu for a non-revolving credit facility of C$15 million.

The company said the proceeds of the credit facility will be used for the development of production facilities, currently under construction, for the Steveville helium field in southern Alberta, Canada.

It noted that the commitment letter with CWB also includes a revolving C$2.5 million demand operating loan to be used for working capital purposes. The debt facilities, which are subject to regulatory and exchange approvals, are likely to close in February when funds are expected to be drawn down, it added.

"Securing debt facilities with two leading banking institutions in Canada is a significant milestone in the completion of our first helium production plant. It validates the feasibility and profitability of Royal's projects,” Royal Helium president and CEO Andrew Davidson said in a statement.

READ: Royal Helium begins 2023 exploration with high resolution aeromagnetic survey in southwestern Saskatchewan

"We are grateful for the partnership support of senior lenders at CWB and the BDC and look forward to growing our relationship further with additional production facilities in the near future," he added.

Royal Helium also announced that following the receipt of the commitment letters, the remaining conditions have been waived by debenture holders to release from escrow the aggregate gross proceeds of C$5.5 million from the previously closed bought deal private placement of convertible debenture units. It said it expects the release of funds from escrow and issuance of convertible debentures and warrants on or about February 10, 2023.

“Together with the early release of the convertible debentures, the Steveville helium production plant is now fully funded including the working capital required to see first production in the second quarter 2023,” Davidson said. 

Saskatoon, Saskatchewan-based Royal Helium controls over one million acres of prospective helium land across southern Saskatchewan and southeastern Alberta. All of Royal's lands are in close vicinity to highways, roads, cities and importantly, close to existing oil and gas infrastructure, with a significant portion of its land near existing helium-producing locations. The firm intends to become a leading North American producer of the high-value commodity.

Contact the author at stephen.gunnion@proactiveinvestors.com

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