Nautilus Inks Bridge Loans and Funding Mandate Deal

Nautilus Minerals has arranged to receive bridge loans from Deep Sea Mining Finance, and has also entered into a funding mandate agreement with M. Horn & Co..

The bridge loans, which the company expects to be in the amount of up to US$7 million, will assist the company’s immediate working capital requirements and facilitate payments required to continue the development of the company’s seafloor production system to be first utilized at the company’s Solwara 1 Project. The loans bear interest at 8% per annum, payable bi-annually in arrears with a one year maturity date.

Each loan will be represented by a promissory note and will initially be secured against the assets of the company through a general security agreement. The Lender may subsequently require the loan to be guaranteed by the company’s material operating subsidiaries and secured against the assets of such subsidiaries.

The bridge loans are expected to form part of a larger secured structured credit facility of up to US$34 million to be provided by the lender to the company, on terms currently being negotiated between the lender and the company. There can be no assurance that the company will be successful in concluding the larger credit facility transaction or that any further funding will be secured by the company.

In conjunction with initial advances under the bridge loans, the company issued to the Lender 3,221,649 warrants of the company (the “Warrants”). Each Warrant entitles the lender to purchase one common share of the company at a price of C$0.17 for a period of five years from the date of issuance of the Warrant.

New Funding Mandate

Pursuant to the Funding Mandate, the Advisor has been appointed as the company’s exclusive financial advisor, for a period of one year, in respect of the remaining project financing of up to US$350 million required to complete the development of the Solwara 1 Project. The Funding Mandate replaces the existing funding mandate agreement dated October 9, 2017 between the Company and the Lender.

The Advisor, a private company controlled by Mark Horn, is a corporate finance business authorized in the United Kingdom by the Financial Conduct Authority. Horn is a previous director of the company.

Under the Funding Mandate, Nautilus will pay the following to the Advisor:

• a cash fee on the aggregate consideration received by the company in a funding transaction equal to 6% in respect of equity financings, or 5% in respect of any debt financing, trade financing or other form of funding transaction during the term of the agreement, and for a period of twelve months following its cancellation in respect of investors introduced to the company by the lender. The Commission will be payable on the bridge loans and other financings provided by the Lender:
• a cash fee equal to 1.0% of the amount raised by the Company in a funding transaction arising from an unsolicited investment proposal received from a third party pursuant to the terms of the Funding Mandate.The Funding Mandate will remain in effect for a period of one year, or until terminated earlier by: (a) mutual agreement; (b) automatically upon the closing of funding transactions of US$350 million; or (c) upon a sale of the company.
• The lender will have a right of first refusal in respect of matching any unsolicited investment proposals.