Royal Helium Ltd (TSX-V:RHC, OTCQB:RHCCF) announced it has closed a C$5.5 million bought deal private placement to fund capital expenditures related to the company's Steveville production facilities.
The bought deal included 5,500 non-transferrable subscription receipts at an issue price of $1,000 per subscription receipt.
Each subscription receipt is convertible into one unsecured convertible debenture unit of the company upon the completion of certain escrow release conditions. Each debenture unit consists of one 14% unsecured convertible debenture in the principal amount of $1,000 with a maturity date of December 31, 2025, and 3,846 common share purchase warrants exercisable at $0.32 per warrant share for a period of 36 months.
READ: Royal Helium says it is now fully funded through to production at Steveville helium field after closing financing package
Royal Helium may choose to accelerate the expiry date of the warrants in the event the volume-weighted average trading price exceeds $0.65 per share for 20 consecutive trading days.
The convertible debentures will be convertible at the holder's option into Royal Helium shares at any time prior to the close of business on the earlier of the business day immediately preceding the maturity date and the date fixed for redemption of the convertible debentures at a conversion price of $0.26 per share.
Interest will accrue commencing on the escrow release date at a rate of 14% per annum, payable semi-annually in arrears, beginning on June 30, 2023. Interest may be paid in cash or paid in kind through the issuance of freely tradable shares.
Saskatoon, Saskatchewan-based Royal Helium controls over 1 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.
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