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Resource Capital Fund IV L.P. ("RCF IV") reports that, pursuant to a US$5 million bridge loan facility (the “Facility”), RCF IV received an establishment fee of 1,750,000 common shares in the capital of First Nickel Inc. ("First Nickel") representing approximately 1.1% of First Nickel’s outstanding common shares.
The US$5 million advanced under the Facility is not convertible into common shares of First Nickel. Provided that First Nickel completes an equity financing in an amount of at least US$20 million from third parties prior to December 31, 2010 (the “Equity Financing”), RCF IV has agreed to use the US$5 million owed on the Facility to subscribe for common shares of First Nickel at the same subscription price and terms as the other subscribers under the Equity Financing. If RCF IV elects to receive all of the interest over the full term as common shares, RCF IV may acquire an additional 24,195,454 common shares (assuming CDN$0.11 per share, a CDN/US exchange rate of 1.0646 and that the Equity Financing has not completed), representing approximately 12.7% of First Nickel’s outstanding common shares. Prior to the acquisition of securities under the Facility, RCF IV owned 9,105,879 common shares in the capital of First Nickel, representing approximately 5.53% of First Nickel’s outstanding common shares. In addition, pursuant to an existing convertible loan facility (the “Existing Facility”) with First Nickel, RCF IV can also convert the principal outstanding under the Existing Facility for 107,054,545 common shares (assuming CDN$0.11 per share and a CDN/US exchange rate of 1.1776), and receive 29,975,273 common shares of First Nickel in interest payments (assuming CDN$0.11 per share and a CDN/US exchange rate of 1.1776). There are various possible share ownership positions of RCF IV immediately after the acquisition of securities under the Facility and Existing Facility. If RCF IV were to convert all of the principal outstanding under the Existing Facility, and elect to receive interest over the full terms of both the Facility and Existing Facility, RCF IV could own as many as 172,081,151 common shares (making the same share price and currency exchange assumptions as above, and assuming the Equity Financing has not completed) in the capital of First Nickel, representing approximately 52.52% of First Nickel’s outstanding shares. The securities were acquired for investment purposes. RCF IV will evaluate its investment in First Nickel from time to time and may, based on such evaluation of market conditions and other circumstances, increase or decrease shareholdings in First Nickel as circumstances require. |
