Cornerstone Capital Resources Inc CTNXF

Franco-Nevada financing completed - thanks not to Super Nick

[BSdetector2016]

Completion of Franco-Nevada US$100 million Royalty Financing and Repayment of US$15 million Bridge Loan

The Board of SolGold plc (LSE & TSX: SOLG) is pleased to announce that it completed the previously announced US$100 million royalty financing pursuant to the NSR Financing Agreement (“NSR Financing”) with Franco-Nevada Corporation (“Franco-Nevada”), in relation to the Company’s flagship Alpala copper-gold project and the remainder of the Cascabel concession in northern Ecuador.

On 11 September 2020, Franco-Nevada advanced to SolGold US$100 million (the “Royalty Purchase Price”) under the NSR Financing Agreement, less the amount of outstanding principal and interest under the US$15 million secured bridge loan pursuant to the Bridge Loan Agreement (“BLA”) with Franco-Nevada announced on 11 May 2020. The aggregate amount owing under the BLA was therefore repaid out of the proceeds of the NSR Financing.  Accordingly, the Company is not required to issue 12,220,000 warrants to Franco-Nevada that would have been required had the Company elected to extend the maturity date under the BLA for a further four month term.

SolGold will apply the funds received to progress the Alpala Project through to a final feasibility study and a development decision. The balance of the proceeds are expected to be used for SolGold’s share of the development of Alpala pursuant to agreements with the minority shareholder of Exploraciones Novomining S.A. (ENSA), Cornerstone Capital Resources Inc.

In return for the Royalty Purchase Price, Franco-Nevada has been granted a perpetual 1% royalty interest to be calculated by reference to net smelter returns (“NSR”) from the Cascabel concession area in accordance with the terms and conditions set out in the NSR Financing Agreement. Furthermore, the NSR Financing can be upsized by US$50 million at SolGold’s election to a 1.5% NSR royalty interest on or before 11 January 2021.