EMC Metals Corp. (TSX:EMC) has secured a US$2.5M loan facility with Scandium Investments LLC, which is owned by a US private investor group. Proceeds from the loan are planned to be used to extinguish all outstanding financial obligations related to a February 2013 negotiated settlement arrangement which secured rights to the Nyngan Scandium Project.
As quoted in the press release:
In this regard, the Company repaid today US$1.2M in maturing indebtedness on existing debt, and will use the remaining loan proceeds to pay the final A$1.4M installment of the Nyngan settlement payment due June 30, 2014. Completion of these two payments secures 100% ownership of the Nyngan Scandium Project for EMC. This US$2.5M loan includes a convertible feature, exercisable by either the lender or EMC into an effective 20% joint venture (JV) interest in both the Company’s Nyngan and Honeybugle Scandium Projects, provided certain conditions are met by EMC.
EMC CEO, George Putnam, said:
We are very happy with the results of these recent financing efforts, and pleased to see a financial resolution to what has been a long and concerted effort to achieve direct ownership of the Nyngan Scandium Project. This transaction does a number of important things for EMC; it fully secures the Nyngan project, ultimately preserves 80% of the project for shareholders, and offers a clear path to a debt-free balance sheet with the JV conversion. This transaction creates a platform that insures new shareholder investments can now go towards building project value and generating progress news. It also brings us a partner that is aligned in helping us through development and ultimately to production, in what we intend to be the world’s first primary scandium mine.