TSX-listed miner RNC Minerals has entered into a $13-million bridge financing facility with Auramet International that will eliminate most debt repayment commitments for the rest of the year, as its focus shifts to the “shovel-ready” Dumont base metals project, in the Abitibi region of Quebec.

RNC CEO Mark Selby said on Thursday that the facility was a critical step in repositioning RNC's central strategic focus onto the advancement of the Dumont project, which contains the world's largest undeveloped reserves of both cobalt and nickel.

“The facility provided tremendous balance sheet support and flexibility by eliminating the bulk of our debt repayments until May 2019, which will allow us to unlock significant capital during this period in three ways: by maximising value from the Beta Hunt gold/nickel mine sale process, maximising investments for Dumont that result from current discussions with potential strategic investors, and accessing up to $12-million of undeployed capital in April 2019 from our joint venture with Waterton,” Selby said.

The company in March placed the Beta Hunt nickel/gold mine, in Australia, on the market.

Proceeds from the $13-million facility, which is due on May 15 next year, would be used to repay the existing senior secured gold loan and senior secured nickel loan and to cover interest payments and fees for the facility.

The company said that 175 oz a month of gold would be payable in interest and would be reduced pro-rata for any prepayment made against the principal on the facility. The interest cost is in line with the increased loan balance of $13-million, as compared to the current $8.6-million facility with a115-oz monthly gold coupon.

RNC said that total debt service costs under the new facilities would be reduced to less than $250 000 a month, from the current levels of about $1.5-million a month.

RNC will pay to Auramet a C$500 000 amendment fee in connection with this extension, to be satisfied in RNC shares issued at the same price as the shares to be issued by RNC on completion of the equity raise.

RNC has also reached agreement with Pala Investments to prepay, subject to certain conditions, its current Pala loan facilities, which, as required, would allow a more rapid paydown of the Pala loan facility and acquire Pala's 2.25% royalty on nickel production from Beta Hunt.

This agreement with Pala is subject to the completion of the Auramet debt restructuring.

Further, RNC announced a $6-million private placement of 40-million units at $0.15 each.