Royal Helium Ltd (TSX-V:RHC, OTCQB:RHCCF) told investors that it has secured the funding it needs to complete the final preparation for its Steveville plant in southeastern Alberta, including all associated midstream and logistics costs, and to advance exploration activities in Saskatchewan and Alberta.
The helium-focused exploration, production and infrastructure company said in a statement that Eight Capital has agreed to purchase for resale, on a bought deal private placement basis, 7,000 non-transferable unsecured convertible debenture units of the company at $1,000 each, with a maturity date of June 1, 2026.
“We are excited to initiate our cash flow engine at Steveville which was recently enhanced by the signing of a 2nd offtake contract at a price of US$625/MCF (thousand cubic feet),” Royal's president and CEO Andrew Davidson commented.
“With the full production from Steveville now allocated, we are beginning the process of defining the next round of volumes that we can bring to market.”
The company noted that each debenture unit consists of one 12% unsecured convertible debenture in the principal amount of $1,000 and 2,703 common share purchase warrants, with each warrant entitling the holder to purchase one common share at an exercise price of $0.40 per warrant share for 36 months.
The interest on the convertible debentures will be payable semi-annually in arrears, beginning on December 31, 2023, it added.
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.
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