Northern Graphite clears US$23.6M debt in Sprott restructuring
The lender becomes its largest shareholder with 9.9 per cent, while the Okanjande stream expands to cover all future production.
Mara Quinlan
Northern Graphite Corporation CVENGC OTCMKTSNGPHF FRA0NG said on Friday it closed a Sprott financing restructuring that eliminates approximately US$23.6 million in senior secured debt and interest. The settlement gives the lender a 9.9 per cent shareholding and a stream covering all future production at Northern's Okanjande graphite project in Namibia.
Shares were unchanged at C$0.06 on the TSX Venture Exchange at 4:00 p.m. EST on Nov. 12, according to Google Finance CVENGC. That close preceded Friday's announcement.
Northern said in its Nov. 13 release it issued 12.5 million common shares to the Sprott-managed funds, making them its largest shareholder. The transaction has conditional acceptance from the TSX Venture Exchange, with final acceptance still required.
The stream was previously capped at 350,000 tonnes of graphite concentrate, with an option to convert to a 1.0 per cent royalty. Both provisions have been removed, while about US$4.7 million in Lac des Iles royalty arrears and related interest remains payable as of Nov. 13.
The debt extinguished comprised approximately US$16.0 million in principal and US$7.6 million in accrued interest in the Nov. 13 announcement. Northern settled those amounts through both the shares and the stream amendment; the release assigns no separate issue price to the shares or value to the amendment.
Northern announced the binding restructuring agreement on April 30 after the loan matured on April 29. Accrued interest was then approximately US$6 million, compared with about US$7.6 million reported in the Nov. 13 closing announcement.
The Lac des Iles balance will receive priority payment from part of the proceeds of certain future equity financings and intellectual property licensing agreements until it is paid in full. That obligation remains separate from the senior secured loan Northern says has been fully satisfied.
"This arrangement now enables us to focus on the next phase of our strategy which is to restart the Lac des Iles and Okanjande mines and to develop the capacity to produce Battery Anode Material," chief executive Hugues Jacquemin said.
Northern's assets include Lac des Iles in Quebec, Okanjande in Namibia and the Bissett Creek development project in Ontario. The company plans mine restarts and battery anode material plants in Quebec, France and Saudi Arabia, but Friday's release gives no restart dates.
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The lender shares are subject to a hold period of four months and one day under applicable securities laws and exchange policies. Northern disclosed no timetable for final TSXV acceptance.
The hold period on the 12.5 million lender shares ends March 13, 2027.
