TORTOLA, British Virgin
Islands, Aug. 30, 2021 /CNW/ -
Sailfish Royalty Corp. (TSXV: FISH) (OTCQX: SROYF) (the
"Company" or "Sailfish") is pleased to announce that
that it has entered into a loan agreement with Mako Mining Corp.
("Mako") dated August 27, 2021
(the "Loan Agreement"), pursuant to which the Company agreed
to provide a US$8 million unsecured
gold-linked term loan (the "Term Loan") to Mako.
The proceeds of the Term Loan will be used by Mako to refinance
existing short-term debt, specifically, the repayment of all
outstanding principal and accrued interest totaling approximately
US$6.2 million owing to Nebari
Resources Credit Fund I, LP ("Nebari") and approximately
US$1.8 million of principal owing to
funds managed by Wexford Capital LP ("Wexford").
As compensation for making the Term Loan available to Mako,
Sailfish shall be entitled to certain cash compensation based on
the prevailing price of gold (the "Lender Compensation").
Mako will make 24 monthly cash payments to Sailfish on account of
the principal amount of the Term Loan and the Lender Compensation,
which shall equal the cash equivalent of 205 ounces of gold
multiplied by the preceding month's average gold price with a floor
of US$1,750 and a ceiling of
US$2,000 pursuant to the terms of the
Loan Agreement. The Term Loan does not have any operational
negative covenants or balance sheet covenants, and there are no
restrictions on dividends and/or share repurchases.
Upon the occurrence of an event of default under the Loan
Agreement, all outstanding amounts, including applicable premiums
become immediately due and payable and interest on such amounts
will accrue at a rate of 12% per annum, accruing daily and payable
to the Company on demand.
The Company has sufficient cash on hand that it does not
anticipate the advance of the Term Loan to have a material effect
on the Company's business and affairs.
Cesar Gonzalez, Chief Executive
Officer of Sailfish states that, "this gold-linked loan is a
win-win for both companies. Sailfish receives an attractive
yield with downside protection and upside potential that supports
the Company's plans to begin paying a dividend; while Mako is able
to refinance its existing short-term debt and pursue a more
aggressive exploration budget, especially at Las Conchitas and
surrounding targets where Sailfish has a 2% NSR."
Multilateral Instrument 61-101
Wexford, Wexford Spectrum Trading Limited and Wexford Catalyst
Trading Limited, hold either directly or through an affiliate, in
the aggregate, a majority of the outstanding common shares of the
Company and Mako and, consequently, the Term Loan is a "related
party transaction" under Multilateral Instrument 61-101 Protection
of Minority Security Holders in Special Transactions ("MI 61-101").
The board of directors of the Company (the "Board") has
determined that the Term Loan will not be subject to the formal
valuation requirement of MI 61-101, as it is not a related party
transaction as described in paragraphs (a) through (g) of the
definition of "related party transaction", and further, the Term
Loan will be exempt from the minority shareholder approval
requirements in MI 61-101 in reliance on the exemption set forth in
sections 5.7(1)(a) of MI 61-101, and in connection therewith the
Board has determined that the Term Loan does not exceed 25% of the
Company's market capitalization. Each of Cesar Gonzalez and Akiba
Leisman, as directors and/or officers of the Company,
abstained from voting on the resolutions of the Board approving the
Term Loan. The Company did not file a material change report more
than 21 days before the expected closing of the Term Loan as the
terms of the Term Loan were not settled until shortly prior to
closing and the Company and Mako wished to close the Term Loan on
an expedited basis for sound business reasons.
About Sailfish
Sailfish is a precious metals royalty and streaming company.
Within Sailfish's portfolio are two main assets in the Americas: a
gold stream equivalent to a 3% NSR on the San Albino gold mine
(~3.5 sq. km) and a 2% NSR on the rest of the area (~134.5 sq. km)
surrounding San Albino in northern Nicaragua; and an up to 3% NSR on the
multi-million ounce Spring Valley
gold project in Pershing County,
Nevada.
Sailfish is listed on the TSX Venture Exchange under the symbol
"FISH" and on the OTCQX under the symbol "SROYF".
Please visit the Company's website at
www.sailfishroyalty.com for additional information.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as the term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Cautionary statement regarding forward–looking
information
Certain disclosures in this release constitute
"forward-looking information" within the meaning of Canadian
securities legislation. Forward-looking statements are statements
that are not historical facts and are generally, but not always,
identified by words such as the following: expects, plans,
anticipates, believes, intends, estimates, projects, assumes,
potential and similar expressions. Forward-looking statements also
include reference to events or conditions that will, would, may,
could or should occur, including, without limitation, statements
regarding the expectation that the advance of the Term Loan will
not have a material effect on the Company's business and affairs
and the Company's plan to begin paying dividends. In making
the forward-looking statements in this news release, the Company
has applied certain factors and assumptions that the Company
believes are reasonable, including that the Term Loan will be
repaid on the terms and timing as specified in the Term Loan
Agreement and that the Company will begin paying dividends.
However, the forward-looking statements in this news release are
subject to numerous risks, uncertainties and other factors that may
cause future results to differ materially from those expressed or
implied in such forward-looking statements, including without
limitation: that the Term Loan may not be repaid on the terms or
timing as specified in the Loan Agreement and the Company may not
begin paying dividends as anticipated by management or at all.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements and forward-looking information. Readers are cautioned
that reliance on such information may not be appropriate for other
purposes. The Company does not undertake to update any
forward-looking statement, forward-looking information or financial
out-look that are incorporated by reference herein, except in
accordance with applicable securities laws.
SOURCE Sailfish Royalty Corp.