Ucore Rare Metals Closes C$6.9 Million Royalty Financing

Ucore Rare Metals (TSXV:UCU) has closed a C$6.9 million royalty financing with a foreign investment fund in consideration for a royalty or profit share related to products or services based on its SuperLig® Molecular Recognition Technology. The investor has the option to increase its investment by up to C$1.37 million.
As quoted in the press release:

Under the terms of the Agreement, the Investor will make a USD $5 Million payment to Ucore, with USD$2.5 Million due immediately on execution of the agreement and the balance payable by April 30, 2016 (collectively, the “Investment”).
In consideration of the foregoing, the Investor will receive a profit share or royalty from the production of Ucore’s early stage MRT installations (the “Royalty”). The Royalty will be comprised of two components: (i) a Gross Royalty equal to 5% of gross sales from the Company’s first MRT installation or installations, payable until the recapture of the Investment; and (ii) a Net Profits Royalty (“NSR”) equal to 5% of Ucore’s net profits from the installation. Net profit figures are to be calculated by Ucore on an annual basis during the production term, in accordance with IFRS accounting procedures.

Jim McKenzie, president and CEO of Ucore, said:

We’re pleased to announce the agreement for yet another significant royalty financing. The obtainment of repeated financings during this challenging time in the resource sector is an exceptional achievement. We believe this shows the potential for MRT as a revenue maker in both procyclical and countercyclical environments. Remarkably, this form of financing is prospectively non-dilutive, a substantial plus for new and existing Ucore shareholders. The Company is excited to be pushing forward with the development of this promising MRT platform. This funding will contribute toward the completion of our MRT pilot plant, which we anticipate during Q1 of 2016.

Click here for the full press release.