Pursuant to the loan agreement, EMR has agreed to lend Crystal Peak up to US$10 million in two tranches. In addition to this, the closing of the first tranche of the loan was completed in the amount of US$5 million.
The loan will mature on 19 January 2020, and will bear interest at the rate of 12% - compounded quarterly.
The principal on the amount of the loan that it drawn by the company, in whole or in part, is convertible into common shares of the company at the option of the holder, at a price per common share of CAN$0.50. However, if Crystal Peak completes an equity financing for aggregate gross proceeds in excess of CAN$500 000 at a lower price per common share at any time after the date of the loan agreement but prior to the conversion date, the conversion price will be the price per common share offered to purchasers by Crystal Peak in such equity financing, provided that such price per common share will not be less than CAN$0.31 per common share.
In addition to this, any interest due pursuant to the loan is payable in common shares of Crystal Peak at the market price of the company on the earlier of the date of conversion or certain prescribed interest payment dates, subject to the approval of the TSX Venture Exchange. In connection with the loan agreement, Crystal Peak granted a security interest to EMR to secure all of its obligations under the loan agreement.
John Mansanti, Chief Executive Officer of Crystal Peak, said: “As we seek the necessary funds to bridge our project through asset financing, we are very fortunate to have the support of our largest shareholder. Their support is a continued endorsement of the value of our project and integral to sustaining key activities as we continue to source the support of other prospective financiers.” In the statement, Crystal Peak claims that it intends to use the funds received from the first tranche of the loan for on going permitting requirements, field work, process plant pilot work, and for other general working capital purposes. If the second tranche of the loan is drawn, Crystal Peak claims that the funds will be used for environmental permitting work, engineering, and for other general working capital purposes.
The closing of the second tranche of the loan is reportedly subject to particular customary closing conditions as set out in the loan agreement. Crystal Peak claims that all of the securities issued pursuant to the loan agreement are subject to a hold period until 20 November 2018.
Read the article online at: https://www.worldfertilizer.com/potash/23072018/crystal-peak-minerals-announces-convertible-loan-agreement-with-emr/