In a significant financial move, NioCorp Developments (NASDAQ:NB) Ltd. has entered into a loan agreement with its CEO, Mark A. Smith, on Wednesday, establishing a $2 million credit facility to bolster the company's finances.
The arrangement, detailed in a recent SEC filing, highlights the terms of the non-revolving credit, which includes a 10% per annum interest rate and a 2.5% establishment fee for each drawdown.
The Centennial, Colorado-based mining company, which trades under the ticker NASDAQ:NB and its warrants under NASDAQ:NIOBW, will have access to the credit until June 30, 2025, unless an early repayment is necessitated by an event of default.
The loan allows for drawdowns with a minimum of $10,000, subject to the CEO's approval, which can be withheld at his discretion.
Repayment terms are stringent, with an immediate obligation to settle the outstanding balance in case of default, insolvency, or other specified events. The loan also includes an early payment fee of 2.5% if the company chooses to settle before the due date. Furthermore, the agreement is secured by a general security agreement that pledges all of the company's assets.
The Audit Committee and disinterested directors of NioCorp's Board have approved this related party transaction, ensuring compliance with the company's governance policies. This financial maneuver is expected to provide NioCorp with additional capital to meet its operational needs.
The first drawdown under this agreement has already been executed, with the company securing $33,000 on the day of the agreement. This strategic financial decision is based on the company's latest SEC filing and underscores NioCorp's efforts to strengthen its financial position.
In other recent news, NioCorp Developments Ltd. has made significant strides in managing its financial obligations. The metal mining company has restructured its financial agreements with two key note holders, YA II PN, Ltd. and Lind Global Fund II LP, adjusting payment schedules and waiving certain terms. This move provides short-term financial relief and prevents potential default triggers, demonstrating active financial management.
Simultaneously, NioCorp has cleared a $16 million convertible debenture issued to investment fund YA II PN, Ltd., marking a significant step towards debt clearance. These developments underscore the company's commitment to maintaining fiscal stability and effectively managing its capital structure.
In addition to restructuring its financial obligations, NioCorp is eyeing project financing for the Elk Creek Critical Minerals Project in Nebraska.
The company has received a preliminary, non-binding indicative financing term sheet from the Export-Import Bank of the United States (EXIM) for an $800 million debt financing for the project.
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