The Prospector News

NioCorp Announces Finalized Financing Agreements with Yorkville Advisors Global, LP

You have opened a direct link to the current edition PDF

Open PDF Close
Uncategorized

Share this news article

NioCorp Announces Finalized Financing Agreements with Yorkville Advisors Global, LP

 

 

 

 

 

NioCorp Developments Ltd. (TSX: NB) (OTCQX: NIOBF) announced that it has entered into definitive agreements with respect to two previously announced financings with YA II PN, Ltd., an investment fund managed by Yorkville Advisors Global, LP. The financings contemplated by the definitive agreements include (i) up to US$16,000,000 aggregate principal amount of unsecured convertible debentures of NioCorp convertible into common shares of NioCorp and Common Share purchase warrants entitling the holders thereof to purchase additional Common Shares; and (ii) a standby equity purchase facility pursuant to which NioCorp will have the right, but not the obligation, subject to the conditions set out therein, to sell Common Shares to Yorkville with a maximum aggregate value of up to US$65,000,000 over a period of up to 36 months.

The Yorkville Financings are expected to become effective on the date of the closing of the Company’s proposed business combination with GX Acquisition Corp. II, as previously announced on September 26, 2022. Once completed, the Yorkville Financings could provide NioCorp with access to up to an additional US$80,360,000, before related fees and expenses payable by NioCorp.

 

NioCorp intends to use the proceeds from the Yorkville Financings to advance its efforts to launch construction of the Elk Creek Project and move it to commercial operation, and to satisfy the fees and expenses incurred in connection with the Transaction, if required.

 

Completion of the Yorkville Financings is subject to certain conditions, including the Closing of the Transaction, the receipt of the approval of the Toronto Stock Exchange and the approval of NioCorp’s shareholders in accordance with the rules of the TSX.

 

Yorkville Convertible Debt Financing

Pursuant to the Securities Purchase Agreement, dated January 26, 2023, by and between NioCorp and Yorkville, Yorkville, and any investor that exercises its contractual right previously granted by NioCorp to participate in the Yorkville Convertible Debt Financing, will advance an initial total amount of US$9,600,000 to NioCorp in consideration of the issuance by NioCorp to the Investors of US$10,000,000 aggregate principal amount of Convertible Debentures at the time of Closing, and an additional total amount of US$5,760,000 to NioCorp in consideration of the issuance by NioCorp to the Investors of US$6,000,000 aggregate principal amount of Convertible Debentures on a date to be determined at the election of NioCorp, but which may not be prior to the later to occur of (i) the date of filing of the Convertible Debt Financing Registration Statement (as defined below) and (ii) the date of Closing.

 

Each Convertible Debenture issued under the Yorkville Convertible Debt Financing will be an unsecured obligation of NioCorp, will have an 18-month term from the First Debenture Closing, which may be extended for one six-month period in certain circumstances at the option of NioCorp, and will incur a simple interest rate obligation of 5.0% per annum (which will increase to 15.0% per annum upon the occurrence of an event of default). The outstanding principal amount of, accrued and unpaid interest, if any, on, and premium, if any, on the Convertible Debentures must be paid by NioCorp in cash when the same becomes due and payable under the terms of the Convertible Debentures at their stated maturity, upon their redemption or otherwise.

 

Subject to certain limitations contained within the Yorkville Convertible Debt Financing Agreement and the Convertible Debentures, holders of the Convertible Debentures will be entitled to convert the principal amount of, and accrued and unpaid interest, if any, on each Convertible Debenture, in whole or in part, from time to time over their term, into a number of Common Shares equal to the quotient of the principal amount and accrued and unpaid interest, if any, being converted divided by the Conversion Price. The “Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination, the greater of (i) 90% of the average of the daily U.S. dollar volume-weighted average price of the Common Shares on the principal U.S. market for the Common Shares as reported by Bloomberg Financial Markets during the five consecutive trading days immediately preceding the date on which the holder exercises its conversion right in accordance with the requirements of the Yorkville Convertible Debt Financing Agreement or other date of determination, unless NioCorp consents to conversion at a lower price, and (ii) the five-day VWAP of the Common Shares on the TSX (or on the principal U.S. market if the majority of the trading volume and value of the Common Shares occurred on the Nasdaq Capital Market during the relevant period) for the five consecutive trading days immediately prior to the Conversion Date or other date of determination less the maximum applicable discount allowed by the TSX.

 

The terms of the Convertible Debentures restrict the number of Convertible Debentures that may be converted during each calendar month by an Investor. The terms of the Convertible Debentures also restrict the conversion of Convertible Debentures by an Investor if such a conversion would cause the Investor to exceed certain ownership thresholds in NioCorp. NioCorp will be required to make prepayments of the Convertible Debentures in certain circumstances.

 

 

In conjunction with each Debenture Closing, NioCorp will issue to the Investors Financing Warrants to purchase a number of Common Shares as is equal to the quotient of the principal amount of Convertible Debentures issued in such Debenture Closing divided by the “Exercise Price“, which is equal to the greater of: (a) the quotient of US$10.00 divided by 11.1829212; or (b) the average of the daily VWAPs of the Common Shares on the principal U.S. market for the Common Shares during regular trading hours as reported by Bloomberg Financial Markets during the five consecutive trading days ending on the trading day immediately prior to such Debenture Closing, in each case subject to any adjustment to give effect to any stock dividend, stock split or recapitalization.

 

 

The Financing Warrants will be exercisable, in whole or in part, but not in increments of less than US$50,000 aggregate Exercise Price (unless the remaining aggregate Exercise Price is less than US$50,000), beginning on the earlier of (a) six months following the issuance of the applicable Financing Warrants or (b) the effective date of the initial Convertible Debt Financing Registration Statement and may be exercised at any time prior to their expiration. Holders of the Financing Warrants may exercise their Financing Warrants, at their election, by paying the Exercise Price in cash or on a cashless exercise basis. On each of the first 12 monthly anniversaries of the Exercise Date, 1/12th of the Financing Warrants will expire.

 

The terms of the Convertible Debentures and the Financing Warrants restrict the conversion of Convertible Debentures or exercise of Financing Warrants by an Investor if such a conversion or exercise would cause the Investor to exceed certain beneficial ownership thresholds in NioCorp or such a conversion or exercise would cause the aggregate number of Common Shares issued pursuant to the Yorkville Convertible Debt Financing to exceed the thresholds for issuance of Common Shares under the rules of the TSX and Nasdaq, unless prior shareholder approval is obtained.

 

The Yorkville Convertible Debt Financing Agreement will terminate automatically if the Business Combination Agreement, dated September 25, 2022, by and among NioCorp, GXII and Big Red Merger Sub Ltd, is terminated. Also, the Investors will have the right to terminate the Yorkville Convertible Debt Financing Agreement if the First Debenture Closing does not occur on or prior to March 22, 2023. NioCorp will have the right to terminate the Yorkville Convertible Debt Financing Agreement at any time prior to the First Debenture Closing, provided that it will be required to pay a cash termination fee of US$1,600,000 to the Investors, on a pro rata basis.

 

 

On January 26, 2023, in connection with the Yorkville Convertible Debt Financing Agreement, NioCorp and Yorkville also entered into a registration rights agreement pursuant to which NioCorp has agreed to file with the U.S. Securities and Exchange Commission a registration statement registering the resale by the Investors of the Common Shares issuable upon the conversion of the Convertible Debentures and the exercise of the Financing Warrants under the U.S. Securities Act of 1933 (the “Securities Act“), as soon as practicable but no later than 21 calendar days following the Closing, and to use its reasonable best efforts to have the Convertible Debt Financing Registration Statement declared effective as soon as practicable after the filing thereof, but in no event later than the 45th calendar day following the filing date thereof. NioCorp further agreed to use its reasonable best efforts to cause the Convertible Debt Financing Registration Statement to remain continuously effective for a period that will terminate upon the first date on which all of the Common Shares issuable upon the conversion of the Convertible Debentures and the exercise of the Financing Warrants may be sold without restriction, including volume and manner-of-sale restrictions, pursuant to Rule 144 under the Securities Act or have been sold by Investors. The Company also granted to the Investors certain demand rights for underwritten shelf takedowns and piggyback registration rights with respect to the Common Shares issuable upon the conversion of the Convertible Debentures and the exercise of the Financing Warrants.

 

Yorkville Equity Facility Financing

Pursuant to the Standby Equity Purchase Agreement, dated January 26, 2023, by and between NioCorp and Yorkville, NioCorp will have the right, but not the obligation, to sell Common Shares to Yorkville with a maximum aggregate value of up to US$65,000,000 for a period commencing at the Closing of the Transaction and ending on the earliest of (i) the first day of the month next following the 36-month anniversary of the Closing, (ii) the date on which Yorkville shall have made payment of the full Commitment Amount and (iii) the date that the Yorkville Equity Facility Financing Agreement otherwise terminates in accordance with its terms, and will issue to Yorkville US$650,000 aggregate principal amount of Common Shares for no additional consideration. Additionally, NioCorp will pay to Yorkville an aggregate fee of US$1,500,000 in cash, including US$500,000 on the date of Closing and the remainder in installments over a 12-month period following the date of the Closing, provided that, NioCorp will have the right to prepay without penalty all or part of the Cash Fee at any time. Each right to sell Common Shares under the Yorkville Equity Facility Financing Agreement is referred to as an “Advance.”

 

Subject to certain limitations and adjustments contained within the Yorkville Equity Facility Financing Agreement, NioCorp will have the option to sell the Common Shares to Yorkville at a purchase price equal to (a) 97% of the VWAP of the Common Shares on the principal U.S. market for the Common Shares during the applicable pricing period, which is a period during a single trading day defined based on when NioCorp submits written notice to Yorkville exercising its right to an Advance; or (b) 97% of the average of the daily VWAPs of the Common Shares on the principal U.S. market for the Common Shares during a pricing period of three consecutive trading days commencing on the trading day an Advance Notice is received by Yorkville, if it is received by 9:30 a.m., New York City time, or the immediately following trading day if it is received after 9:30 a.m., New York City time. Purchase Price Option # 2 will be used whenever any Convertible Debentures issued to Yorkville pursuant to the Yorkville Convertible Debt Financing Agreement are outstanding, unless waived by Yorkville.

 

The Yorkville Equity Facility Financing Agreement limits the number of Common Shares that may be issued to Yorkville in each Advance to the greater of (a) 5,000,000 Common Shares and (b) the number of Common Shares equal to 100% of the average daily volume traded of the Common Shares on the Nasdaq during the five trading days prior to an Advance, provided that, if any Convertible Debentures are outstanding when an Advance Notice is delivered, then the maximum number of Common Shares that may be issued will be computed in accordance with (b) only. Notwithstanding this, NioCorp and Yorkville may agree to an issuance of a number of Common Shares in excess of the Maximum Advance Amount in any given Advance. Further, for as long as the Convertible Debentures issued to Yorkville are outstanding, the Yorkville Equity Facility Financing Agreement provides for certain limitations on the amount of Advances that NioCorp may request, including that NioCorp shall not effect more than two Advances in any month. The Yorkville Equity Facility Financing Agreement also restricts the sale of Common Shares to Yorkville if such a sale would cause Yorkville to exceed certain beneficial ownership thresholds in NioCorp or such issuance would cause the aggregate number of Common Shares issued pursuant to the Yorkville Equity Facility Financing to exceed the thresholds for issuance of Common Shares under the rules of the TSX and Nasdaq, unless prior shareholder approval is obtained.

 

The Yorkville Equity Facility Financing Agreement restricts the issuance of Common Shares pursuant to an Advance if such issuance would cause Yorkville to exceed certain beneficial ownership thresholds in NioCorp or such issuance would cause the aggregate number of Common Shares issued pursuant to the Yorkville Equity Facility Financing to exceed the thresholds for issuance of Common Shares under the rules of the TSX and Nasdaq, unless prior shareholder approval is obtained.

 

The Yorkville Equity Facility Financing Agreement will terminate automatically following the expiration of the Commitment Period. In addition, the Yorkville Equity Facility Financing Agreement will terminate automatically if the Business Combination Agreement is terminated. Also, NioCorp will have the right to terminate the Yorkville Convertible Debt Financing Agreement effective upon five trading days’ prior written notice to Yorkville, as long as there are no outstanding unsettled Advances and provided that it will be required to pay all amounts owed to Yorkville thereunder, including, without limitation, any unpaid portion of the Cash Fee. The parties may also terminate the Yorkville Equity Facility Financing Agreement by mutual written consent.

 

The Convertible Debentures, the Financing Warrants, the Common Shares issuable upon conversion of the Convertible Debentures and upon exercise of the Financing Warrants, the Common Shares issuable pursuant to an Advance and the Commitment Shares will not be qualified for distribution by prospectus in any jurisdiction of Canada, and may not be offered for sale, sold, assigned or transferred in any jurisdiction of Canada except pursuant to a prospectus or exemption from the prospectus requirement under applicable securities laws in Canada. Yorkville will not be permitted to offer or sell any such securities directly or indirectly to any person whom, to Yorkville’s knowledge, is resident or located in a jurisdiction of Canada or acquiring such Common Shares for the benefit of another person resident or located in a jurisdiction of Canada, or on any marketplace in Canada.

 

 

About NioCorp

NioCorp is developing a critical minerals project in Southeast Nebraska that will produce niobium, scandium, and titanium.  The Company also is evaluating the potential to produce several rare earths from the Project.  Niobium is used to produce specialty alloys as well as High Strength, Low Alloy steel, which is a lighter, stronger steel used in automotive, structural, and pipeline applications. Scandium is a specialty metal that can be combined with Aluminum to make alloys with increased strength and improved corrosion resistance. Scandium is also a critical component of advanced solid oxide fuel cells. Titanium is used in various lightweight alloys and is a key component of pigments used in paper, paint and plastics and is also used for aerospace applications, armor, and medical implants.  Magnetic rare earths, such as neodymium, praseodymium, terbium, and dysprosium are critical to the making of Neodymium-Iron-Boron magnets, which are used across a wide variety of defense and civilian applications.

Posted January 30, 2023

Share this news article

MORE or "UNCATEGORIZED"


Galiano Gold Reports Q3 Production and Financial Results

Galiano Gold Inc. (TSX: GAU) (NYSE American: GAU) is pleased to report its third quarter 2024 prod... READ MORE

November 8, 2024

Silvercorp Reports Adjusted Income of $17.8 Million, $0.09 per Share, and Cash Flow from Operations of $23.1 Million for Q2 Fiscal 2025

Silvercorp Metals Inc. (TSX: SVM) (NYSE American: SVM) reported its financial and operating results... READ MORE

November 8, 2024

Sandstorm Gold Royalties Announces 2024 Third Quarter Results

Sandstorm Gold Ltd. (NYSE: SAND) (TSX: SSL) has released its financial results for the third quarte... READ MORE

November 8, 2024

Denison Reports Financial and Operational Results for Q3'2024, Including Positive Progress on Phoenix Engineering and Regulatory Review

Denison Mines Corp. (TSX: DML) (NYSE American: DNN) today filed its Condensed Consolidated F... READ MORE

November 8, 2024

Lundin Gold Reports Third Quarter of 2024 Results: Record cash generation, revenue, and adjusted EBITDA achieved and supported by a strong gold price

Lundin Gold Inc. (TSX: LUG) (Nasdaq Stockholm: LUG) (OTCQX: LUGDF) is pleased to report results fo... READ MORE

November 8, 2024

Copyright 2024 The Prospector News