TORONTO (miningweekly.com) – Polymetallic project developer Noront Resources has entered into a $15-million loan with Resource Capital Funds (RCF) to further develop the company's flagship advanced-stage Eagle's Nest nickel/copper/platinum/palladium project, in the far north of Ontario.

The company on Tuesday said the facility comprised a one-year bridge loan, which would mature on February 25, 2014, and automatically roll into a convertible loan with a maturity date of December 31, 2015, if the facility was not repaid before the bridge loan maturity date.

The facility would bear interest at 10% a year during the bridge loan period and at 8% a year during the convertible loan period.

Interest would be paid quarterly, in arrears, in common shares of the company, based on the volume-weighted average trading price of the company's common shares during the 20 days before the date of each interest period determination, or at RCF's option, in cash.

The convertible loan may be converted into common shares of the company at the option of RCF at a price of 45c a share at any time after the bridge loan maturity date, and before December 31, 2015.

RCF currently owned about 18% of Noront’s equity and should the bridge loan roll into the convertible loan, then, on a partially diluted basis, RCF's equity ownership would exceed 20% of the outstanding shares of the company, which would require shareholder approval to grant the conversion rights and is a condition to entering into the loan facility.

Noront said the facility required it to hold a special shareholders meeting to approve the convertible loan before the end of April. If the company's shareholders did not approve the convertible loan, then the facility would mature on the bridge loan maturity date and the interest rate would increase to 15% a year for the period beginning on the date of the special meeting of shareholders and ending on the bridge loan maturity date.

CEO DEPARTS

Noront in January announced the resignation of CEO Wes Hanson. The board had appointed Paul Parisotto to act as interim president and CEO and the company had started a search to identify a permanent president and CEO.

Ted Bassett had been appointed lead director during the period of Parisotto's appointment.

Hanson had agreed to continue to be available as a consultant to Noront.