DENVER, March 1, 2013 /CNW/ - Resource Capital Fund V L.P. ("RCF") announces it has entered into a US$15 million loan facility (the "Facility") with Noront Resources Ltd. ("Noront") and acquired 977,954 common shares of Noront ("Common Shares") as payment of an establishment fee for the Facility. The Facility is a one year bridge loan (the "Bridge Loan") which matures on February 25, 2014 and automatically rolls into a convertible loan (the "Convertible Loan") with a maturity date of December 31, 2015, if the Facility is not repaid prior to the Bridge Loan maturity date and Noront shareholder approval is obtained. RCF acquired 977,954 common shares of Noront as payment of an establishment fee for the Facility, representing approximately 0.4% of Noront's outstanding common shares (the "Common Shares"). Subject to Noront obtaining shareholder approval, the Convertible Loan is convertible into Common Shares at any time subsequent to the Bridge Loan maturity date and prior to December 31, 2015. If the Convertible Loan is converted into Common Shares, RCF could acquire approximately 33,333,333 Common Shares (subject to the USD / CAD exchange rate at the time of conversion and other terms of the Facility), representing approximately 13.0% of Noront's Common Shares.
The Facility will bear interest at 10% per annum during the Bridge Loan period and at 8% per annum during the Convertible Loan period. Interest will be paid quarterly in Common Shares based on the volume weighted average trading price of the Common Shares during the 20 days prior to the date of each interest period determination or, at RCF's option, in cash. If Noront shareholders do not approve the Convertible Loan, then the Facility will mature on the Bridge Loan maturity date and the interest rate will increase to 15% per annum beginning on the date of the special meeting of shareholders and ending on the Bridge Loan maturity date.
As a result of the transaction, RCF will own an aggregate of 75,737,042 Common Shares in the capital of Noront, representing approximately 28.6% of Noront's issued and outstanding Common Shares on a non-diluted basis (assuming conversion of the Facility but no payment of interest in Common Shares under the Facility).
The securities were acquired for investment purposes. RCF will evaluate its investment in Noront from time to time and may, based on such evaluation of market conditions and other circumstances, increase or decrease shareholdings in Noront as circumstances require.
For further information and to obtain a copy of the early warning report filed under applicable Canadian securities laws in connection with the transactions hereunder, please see Noront's profile on the SEDAR website www.sedar.com.
SOURCE: Resource Capital Fund V L.P.
For further information:
Resource Capital Fund V L.P.
1400 Sixteenth Street, Suite 200,
Denver, CO, 80202,
Telephone: (720) 946-1444