REGINA, SK – ROK Resources Inc. (“ROK” or the “Company“) (TSXV:ROK)(TSXV:ROK.WT) is pleased to confirm that in connection with the strategic Southeast Saskatchewan asset acquisition announced on December 19, 2022 (the “Acquisition“), ROK has entered a commitment letter (the “Commitment Letter“) with respect to a senior secured loan facility with a Canadian Chartered Bank for an aggregate principal amount of $75 million (the “Senior Loan Facility“).
The Senior Loan Facility will be used to fund the Acquisition and pay out existing debt held by Anvil Channel Energy Solutions (“ACES“), which is estimated at $42 million at closing of the Acquisition and carries no pre-payment penalties. The Senior Loan Facility is comprised of: (i) revolving credit facility in the amount of $22.5 million which the interest rate thereof is calculated on a sliding scale based on a debt-to-cash flow ratio and is expected to have an initial interest rate of approximately 8.15% at closing; and (ii) a non-revolving term loan in the amount of $52.5 million, amortized over no less than a two (2) year period, with an interest rate of Canadian Bankers’ Acceptance rate plus 6.25%. ROK expects to realize savings of approximately 30% in lower combined interest expenses.
The commitment of Canadian Chartered Bank is subject to the execution of mutually acceptable credit documentation giving effect to the terms provided in the Commitment Letter, and the satisfaction of the other customary conditions to closing, including the satisfaction of all conditions to the completion of the Acquisition.
Post-closing of the Acquisition, currently planned on or before January 24, 2023, ROK plans to provide its 2023 capital budget and guidance.