Signal Gold gets $21 million credit facility with Nebari

By Mary-Katherine Stinson

Lexington, Ky., Feb. 17 – Signal Gold Inc. entered a $21 million credit agreement with Nebari Gold Fund 1 LP, Nebari Natural Resources Credit Fund I LP, and Nebari Natural Resources Credit Fund II LP to advance the Goldboro project in Nova Scotia, according to a press release.

The new credit facility provides for an initial draw of $16 million and a second tranche of $5 million at the election of the company, subject to satisfaction of certain conditions.

The credit facility has a maturity date of two years from the initial draw with the option to extend up to 12 months and is expected to be repaid from the proceeds of a project finance facility for Goldboro which the company is targeting to occur later in 2023.

The credit facility bears an annual coupon at SOFR plus 670 basis points with a 3% SOFR floor. The credit facility also has an original issue discount of 5% for the first 24 months for each tranche drawn under the facility, 6.25% for the period between 25-30 months inclusive of each draw, and 7.825% for the period between 30-36 months inclusive of each draw.

Interest accruing prior to March 31, 2024 shall be capitalized and added to the outstanding principal amount.

The first tranche will be drawn immediately at closing and will be used to make progress with pre-development activities for the Goldboro Project and to repay the company’s existing $8 million senior secured facility with Auramet Internal LLC.

Signal Gold will also grant 15,413,508 share purchase warrants to Nebari for the initial draw of $16 million, with each warrant exercisable to purchase a common share of the company at a strike price of C$0.44 per share.

The financing will be secured by a pledge of shares in favor of Nebari on the company's material subsidiaries, namely Goldboro Gold Mines Inc. and Point Rousse Mining Inc., together with security on substantially all of the company's material real and personal property.

Signal Gold is a Toronto-based gold development company.

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