Nautilus receives additional loan under secured loan facility

Vancouver, British Columbia, October 16, 2018 – Nautilus Minerals Inc. (TSX:NUS, OTC:NUSMF Nasdaq Intl Designation) (the “Company” or “Nautilus“) announces that the Company has received a loan from Deep Sea Mining Finance Ltd. (the “Lender“) in the principal amount of US$770,000 under the previously announced loan agreement (the “Loan Agreement“) between the Company, two of its subsidiaries and the Lender which provides for a secured structured credit facility of up to US$34 million.

Pursuant to the Loan Agreement, the Company has issued to the Lender an additional 3,307,560 warrants of the Company in connection with the US$770,000 loan. Each such warrant entitles the Lender to purchase one common share of the Company at a price of C$0.17 for a period of five years from the date of issuance of the warrant.

To date the Company has issued a total of 68,492,264 share purchase warrants to the Lender in connection with loans totaling US$15,945,000. Pursuant to the Loan Agreement, share purchase warrants are issued on the basis of one warrant for each US$0.2328 of principal amount of loan advanced.

The Company may draw loans under the Loan Agreement on a monthly basis, which shall bear interest at 8% per annum, payable bi-annually in arrears. Advances of loans are subject to, among other things, the Lender’s ongoing review and approval of the Company’s monthly operational budget. All loans have a maturity date of January 8, 2019. The Company will be entitled to pre-pay, in whole but not in part, the loans at any time prior to maturity, by paying 108% of the outstanding principal of the loans plus accrued and unpaid interest.

The loans are being provided to fund the Company’s working capital requirements and enable the Company to continue the advancement of the Solwara 1 Project while the Company seeks, with the assistance of its financial advisors, the remaining project financing of up to approximately US$350 million required to complete the development of the Solwara 1 Project.

As previously disclosed, the Lender is a private company owned 50% by each of: (i) USM Finance Ltd., a wholly owned subsidiary of USM Holdings Ltd, an affiliate of Metalloinvest Holding (Cyprus) Limited; and (ii) Mawarid Offshore Mining Ltd., a wholly-owned subsidiary of MB Holding Company LLC. As the Lender is indirectly controlled by affiliates of the Company’s two largest shareholders, the Lender is a “related party” of the Company and the loan transaction constitutes a “related party transaction” of the Company under MI 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101“). The transactions comprising the loans and the share purchase warrants are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101.

The Company did not file a material change report more than 21 days before the expected closing of this transaction, as the details of the transaction were not finalized until immediately prior to the closing and the Company wished to close the transaction as soon as practicable for sound business reasons.

The issuance by the Company of the maximum number of warrants under the Loan Agreement, and the C$0.17 exercise price of such warrants, received the requisite disinterested shareholder approvals at the Company’s annual general meeting held on June 25, 2018 as required by the Toronto Stock Exchange.


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