SASKATOON, SK, Dec. 2, 2024
/CNW/ - Royal Helium Ltd. (TSXV: RHC) (OTCQB:
RHCCF) ("Royal" or
the "Company") is pleased to announce that it
intends to complete a non-brokered private placement offering (the
"Offering") of up to 13,520 convertible debenture units of
the Company (the "Debenture Units") at a price of
$1,000 per Debenture Unit (the
"Issue Price"). Up to 4,500 of the Debenture Units will be
issued to new investors for aggregate gross proceeds to Royal of up
to $4,500,000; additionally up to
9,020 Debenture Units will be issued to Existing Debentureholders
(defined below) of the Company in exchange for the forfeiture of
their Existing Debentures (defined below).
Each Debenture Unit will consist of (i) 1,000 20% senior
unsecured convertible debentures having a face value of
$1.00, convertible into common shares
of the Company (each a "Common Share") at a conversion price
of $0.05 per Common Share (the
"Conversion Price"), with a maturity date (the "Maturity
Date") three years from the Closing Date (as defined below)
(the "Convertible Debentures"); and (ii) 20,000 common share
purchase warrants (the "Warrants"). Each Warrant entitles
the holder thereof to purchase one Common Share at $0.05 per share for a period of three years
following the Closing Date.
The principal amount of each Convertible Debenture will be
convertible at the holder's option into Common Shares prior to the
earlier of: (i) the close of business on the Maturity Date; and
(ii) the date fixed for redemption of the Convertible Debentures at
a conversion price of $0.05 per
Common Share (the "Conversion Price").
Interest on the Convertible Debentures will accrue commencing on
the Closing Date at a rate of 20% per annum and shall be payable
semi-annually in arrears. At the Company's option, provided no
event of default has occurred and is continuing and provided all
applicable regulatory approvals have been obtained (including any
required approval of any stock exchange on which the Common Shares
are listed), the initial two (2) semi-annual interest payments,
being the interest payable for the period ending on or before
December 31, 2025, may be paid in
cash or paid-in-kind through the issuance of Debenture Units.
In connection with the Proposed Offering, each holder of
an existing Company debenture (the "Existing
Debentureholders", being the 14% convertible debentures
due December 31, 2025 and the 12%
convertible debentures due June 30,
2025, and collectively referred to herein as the
"Existing Debentures") will have the option to forfeit their
Existing Debentures in exchange for the issuance of the number of
Debenture Units equal to the then-outstanding principal amount of
such Existing Debentureholder's forfeited Existing Debentures (the
"Optional Exchange").
The closing of the Offering is conditional on fifty percent
(50%) of the Existing Debentureholders exchanging their Existing
Debentures for Debenture Units pursuant to the Optional
Exchange.
The conversion of the Existing Debentures under the Optional
Exchange will be subject to the approval of the Existing
Debentureholders by extraordinary resolution, which requires the
Company to receive consent from Existing Debentureholders
representing, in aggregate, a minimum of 66⅔% of the outstanding
principal amount of each of the 12% convertible debentures and the
14% convertible debentures, respectively (the "Extraordinary
Resolution").
A notice outlining the terms of the Optional Conversion has been
delivered to all Existing Debentureholders (the "Notice").
Existing Debentureholders will have the option to: (i) consent to
the Extraordinary Resolution and forfeit their Existing Debentures
in exchange for Debenture Units pursuant to the Optional Exchange
in accordance with the instructions provided in the Notice; (ii)
consent to the Extraordinary Resolution and not forfeit their
Existing Debentures in exchange for Debenture Units pursuant to the
Optional Exchange; or (iii) not consent to the Extraordinary
Resolution and not forfeit their Existing Debentures in exchange
for Debenture Units pursuant to the Optional Exchange. Any Existing
Debentures not tendered will remain outstanding after the closing
of the Offering.
The closing of the Offering is expected to occur on or about
December 11, 2024 (the "Closing
Date") and, in addition to the aforementioned approvals and
conditions, is subject to the approval of the TSXV and other
necessary regulatory approvals.
The net proceeds of the Offering are expected to be used by the
Company to fund capital expenditures related to the
re-commissioning of the Steveville production facilities, and for
general corporate and working capital purposes.
All amounts in this press release are expressed in Canadian
dollars.
The securities being offered have not been, nor will they be,
registered under the United States Securities Act of 1933, as
amended, and may not be offered or sold in the United States or to, or for the account or
benefit of, U.S. persons absent registration or an applicable
exemption from the registration requirements. This press release
shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of the securities in any
State in which such offer, solicitation or sale would be
unlawful.
About Royal Helium Ltd.
Royal is an exploration, production and infrastructure company
with a primary focus on the development of helium and associated
gases. The Company's extensive footprint includes prospective
helium permits and leases across Southern
Saskatchewan and southeastern Alberta. Given the current and foreseeable
global undersupplied nature of this critical and non-renewable
product, Royal is well positioned to be a leading North American
producer of this increasingly high-value commodity
Royal's helium reservoirs are carried primarily with nitrogen.
Nitrogen is not considered a greenhouse gas (GHG) and therefore has
a low GHG footprint when compared to other jurisdictions that rely
on large scale natural gas production for helium extraction. Helium
extracted from wells in Saskatchewan and Alberta can be up to 90% less carbon intensive
than helium extraction processes in other jurisdictions. For more
information, please visit SEDAR+ (www.sedarplus.ca) and the
Company's website (https://royalheliumltd.com).
Legal Advisors
Wildeboer Dellelce LLP is the legal advisor to Royal Helium
Ltd.
Forward-Looking Information
This news release may contain "forward-looking statements"
within the meaning of applicable Canadian securities laws,
including, without limitation: our statements related to the use of
proceeds of the Offering. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by management, are inherently subject
to significant business, economic and competitive uncertainties,
and contingencies. These statements generally can be identified by
the use of forward-looking words such as "may", "should", "will",
"could", "intend", "estimate", "plan", "anticipate", "expect",
"believe" or "continue", or the negative thereof or similar
variations. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause future
results, performance or achievements to be materially different
from the estimated future results, performance or achievements
expressed or implied by those forward-looking statements and the
forward-looking statements are not guarantees of future
performance. Royal's statements expressed or implied by these
forward-looking statements are subject to a number of risks,
uncertainties, and conditions, many of which are outside of Royal's
control, and undue reliance should not be placed on such
statements. Forward-looking statements are qualified in their
entirety by the inherent risks and uncertainties surrounding the
Offering, including: that Royal's assumptions in making
forward-looking statements may prove to be incorrect; adverse
market conditions; the Extraordinary Resolution may not be passed;
the pre-conditions to, and other approvals necessary for,
completion of the Offering may not occur; that future results may
vary from historical results; and competition in the markets
where Royal operates. Except as required by securities law, Royal
does not assume any obligation to update or revise any
forward-looking statements, whether as a result of new information,
events or otherwise.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this news
release.
SOURCE Royal Helium Ltd.
