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Beedie Investments Limited Enters into a Convertible Loan Agreement with Nova Royalty Corp.

Newsfile Corp.
·5 mins read

Vancouver, British Columbia--(Newsfile Corp. - October 2, 2020) -  Beedie Investments Limited (the "Beedie") has entered into a convertible loan agreement dated September 30, 2020 (the "Loan Agreement") with Nova Royalty Corp. ("Nova") pursuant to which Beedie has agreed to loan up to $13 million (the "Loan Facility") to Nova to fund acquisitions of new royalties and streams.

The Loan Facility will be funded by way of an initial advance of $3.5 million (the "Initial Advance") on the closing date (the "Closing Date"), and the remaining $9.5 million will be available for subsequent advances in minimum tranches of $1.5 million over the term of the Loan Facility. The Closing Date is expected to occur on or before October 6, 2020. The Loan Facility carries an interest rate of 8.0% on advanced funds and 1.5% on standby funds available, with the principal payment due 48 months after the Closing Date. During the initial 24 months of the Loan Agreement, Nova has the option of either accruing the interest and standby fees payable to the principal amount of the Loan Facility or making a cash payment to satisfy the interest and standby fees owing. During the final 24 months of the Loan Agreement, any interest and standby fees owing shall be paid in cash on a monthly basis.

The Initial Advance will be convertible into common shares of Nova ("Nova Shares") at a conversion price of $1.00 per Nova Share. Any subsequent advance under the Loan Facility will be convertible into Nova Shares at a conversion price equal to a 20% premium above the 30-day volume weighted average price of the Nova Shares on the TSX Venture Exchange (the "30-day VWAP").

The Loan Facility will be convertible at any time at the option of Nova in the followings circumstances: (i) if the 30-day VWAP of the Nova Shares is equal to or exceeds a 50% premium above the conversion price of an advance for 30 consecutive trading days, then Nova can elect to convert up to 50% of the principal amount such advance under the Loan Facility into Nova Shares; and (ii) if the 30-day VWAP of the Nova Shares is equal to or exceeds a 100% premium above the conversion price of an advance for 30 consecutive trading days, then Nova can elect to convert any portion or all of the principal amount of such advance under the Loan Facility into Nova Shares.

Pursuant to the terms of the Loan Agreement, Beedie has also committed to a subscription of $2 million in Nova's next equity offering ("Offering") in 2020, assuming the Offering is at least $10 million and led by a recognized securities dealer.

Immediately prior to entering into the Loan Agreement, Beedie, directly or indirectly, owns or controls (i) 2,000,000 Nova Shares; and (ii) common share purchase warrants exercisable for 1,000,000 Nova Shares (the "Nova Warrants") at an exercise price of $1.00 per Nova Share until February 11, 2022. Assuming the exercise in full of the Nova Warrants and conversion in full of the Initial Advance into Nova Shares in accordance with the terms of the Loan Agreement, Beedie, directly or indirectly, would own or control a total of 6,500,000 Nova Shares, representing approximately 14.5% of the issued and outstanding Nova Shares on a partially diluted basis. Assuming the exercise in full of the Nova Warrants and conversion in full of the entire Loan Facility into Nova Shares in accordance with the terms of the Loan Agreement (assuming that all subsequent advances under the Loan Facility are converted into Nova Shares at a conversion price of $1.25 per share, representing a 20% premium above the closing price of the Nova Shares on the TSX Venture Exchange as of October 1, 2020), Beedie, directly or indirectly, would own or control a total of 14,100,000 Nova Shares, representing approximately 26.9% of the issued and outstanding Nova Shares on a partially diluted basis. The actual number of Nova Shares issued pursuant to the conversion of any subsequent advances under the Loan Facility will depend upon the 30-day VWAP of the Nova Shares on the TSX Venture Exchange applicable at the time.

All of the securities held by Beedie in Nova, including the Nova Shares, the Nova Warrants and the Loan Agreement, are being held for investment purposes. Beedie may in the future take such actions in respect of its Nova securityholdings as it deems appropriate in light of the market circumstances then existing, including the potential purchase of additional shares of Nova through open market purchases or privately negotiated transactions, or the sale of all or a portion of such holdings in the open market or in privately negotiated transactions to one or more purchasers, or Beedie may continue to hold its current positions.

A copy of the early warning report relating to the Loan Agreement will be available under Nova's profile on SEDAR at www.sedar.com, and may also be obtained by contacting Beedie Investments Limited at 604-435-3321. Beedie's head office is located at Suite 1570 - 1111 West Georgia Street, Vancouver, BC, V6E 4M3, Canada.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/65137