Melior Announces Closing of First Tranche of Private Placement and Provides Update ON Debt Financing FOR Goondicum Restart
NEWS RELEASE
MELIOR ANNOUNCES CLOSING OF FIRST TRANCHE OF PRIVATE PLACEMENT
AND PROVIDES UPDATE ON DEBT FINANCING FOR GOONDICUM RESTART
Toronto, Ontario, Jan 25, 2018 – Melior Resources Inc. (TSXV: “MLR”) (“Melior” or the “Company”) is
pleased to announce several Goondicum re-start financing milestones and provide an update on
previously announced debt financing efforts:
• Closing of the first tranche of its previously announced non-brokered private placement, raising
gross proceeds of $1,063,000;
• Signing of a letter of intent for a US$5 million loan and 600,000 tonne ilmenite offtake agreement
with a leading Chinese-based ilmenite trader (the “L&O Facility”);
• Continued availability of the previously announced US$5.25 million credit facility from Pala
Investments Limited (“Pala Credit Facility”); and
• Agreement in principle for provision of a US$2 million stand-by facility (“Pala Standby Facility”)
from Pala Investments Limited to assist with working capital during the ramp-up of the operations.
Together, the above financing initiatives represent an attractive financing package for the restart of
Melior’s Goondicum ilmenite mine. Melior is now working to shortly secure the financial close of the L&O
Facility, Pala Credit Facility, and Pala Standby Facility.
“I am very pleased with the progress that has been made towards securing the complete financing
package required to re -start the Goon dicum mine. The support of Melior’s new and existing financing
partners strongly validates the potential of the mine and its speedy re-start in an environment of robust
commodity pricing and improving investor sentiment . The newly announced L&O Facility brings the
complete restart f unding package together and, along with the life of mine apatite offtake previously
announced, sees Goondicum in a very strong position with respect to the marketing of its products ,” said
Mark McCauley, CEO of Melior Resources. “ Today’s announcement conti nues a strong and mutually
beneficial relationship with all our stakeholders , benefiting not only the Goondicum mine but future
prospective projects as well.”
Closing of First-Tranche of Equity Financing
Melior has closed on the first tranche of its previously announced non-brokered private placement
financing (the “Financing”) by issuing 13,287,500 units (“Units”) for gross proceeds of $1,063,000. The
Company’s four largest existing shareholders have each participated in the initial tranche of the
Financing) with a subsequent closing expected to occur on or prior to February 1, 2018.
Each Unit is comprised of one common share of the Company (each, a “Share”) and one common share
purchase warrant (each, a “Warrant”). Each Warrant entitles its holder to acquire one additional Share of
the Company at a price of $0.105 per Share within the 24-month period following the subsequent final
closing of the Offering; provided that, in the event the Shares trade at a closing price on The TSX Venture
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Exchange (the “Exchange”) of greater than $0.15 per Share for a period of 10 consecutive trading days
at any time after the six month anniversary of the closing of the Financing, the Company may accelerate
the expiry date of the Warrants by giving notice to the holders thereof and in such case the Warrants will
expire on the 30th day after the date on which such notice is given by the Company.Proceeds from the
Offering will be used for general working capital purposes and, upon completion of the debt financings
described in this announcement, the proceeds will go towards the re-start of Melior’s Goondicum ilmenite
mine. In connection with the Financing and as consideration for facilitating the completion of the initial
tranche, the Company will pay the amount of $5,600 in cash to Georg Hochwimmer.
Signing of Letter of Intent for US$5 Million Loan and 600,000 Tonne Ilmenite Offtake
The Company is also pleased to announce that it has entered into a non-binding letter of intent for a loan
and off-take agreement with a leading Chinese-based ilmenite trader (the “Lender”) and and is in the
process of negotiating the definitive agreements with the Lender. Under the terms of the LOI, the Lender
will provide US$5 million in funding and will purchase 600,000 tonnes of ilmenite produced at Melior’s
Goondicum mine over the initial six years of production. It is intended that the proceeds of the L&O
Facility will form part of a comprehensive funding package (along with the Pala Credit Facility and the
Financing) that will enable the Company to restart the Goondicum mine.
The terms of the L&O Facility remain subject to negotiation and there is no guarantee that a transaction
will be consummated with the Lender or, if consummated, the terms upon which such transaction may
be consummated.
Melior has received the conditional approval of the Exchange for the Financing, the Pala Facilit y and
the L&O Facility, but each remains subject to final Exchange approval.
Update on the Pala Loan Facility
As previously announced on October 26, 2017, the Company has an agreement in principle with Pala for
the provision of a US$5.25 million credit facility for the purpose of restarting the Goondicum ilmenite mine.
The Pala Credit Facility received conditional approval from the TSX Venture Exchange on November 23,
2017. It is still available to the Company on the same terms and conditions as previously announced with
execution of the necessary legal documents expected to occur by the end of February subject to the
primary condition precedent of raising an additional US$5 million.
In addition to the Pala Credit Facility, Pala have agreed in principle to provide the Company with a US$2
million standby facility to the Company to assist with working capital during the ramp-up of the operation.
The terms of the Pala Standby Facility remain subject to negotiation and approval of the Exchange.
Goondicum Mine Restart Decision
The Goondicum mine does not have mineral reserves under NI 43-101. While the restart of production at
the Goondicum mine in the absence of at least a pre-feasibility study demonstrating economic and
technical viability presents increased uncertainty and economic and technical risks, the Company
believes that these risks are mitigated by, among other things, the work conducted in the Company’s
November 2016 PEA, as well as the mine’s past history of production in 2007-2008 and 2012-2015.
About Melior
Melior is the owner and operator of the Goondicum ilmenite mine, a past-producing ilmenite and apatite
mine strategically located in Queensland Australia. Further details on Melior and the Goondicum ilmenite
mine can be found at www.meliorresources.com and regulatory filings are available on SEDAR.
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Melior is incorporated under the provisions of the Business Corporations Act (British Columbia) and has a
registered office in Toronto, Ontario. Melior is classified as a Tier 1 Mining Issuer under the policies of the
TSX Venture Exchange.
Forward Looking Statements Disclaimer
Statements made in this news release may be forward-looking and therefore subject to various risks and
uncertainties. Such statements can typically be identified by terminology such as ‘‘may’’, ‘‘will’’, ‘‘could’’,
‘‘should’’, ‘‘expect’’, ‘‘plan’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘intend’’, ‘‘possible’’, ‘‘continue’’, “objective” or other
similar expressions concerning matters that are not historical facts. Certain material factors or
assumptions are applied in making forward-looking statements and actual results may differ materially
from those expressed or implied in such statements. Melior does not undertake to update any forward-
looking statements; such statements speak only as at the date made.
Going Concern Risk
As described in Melior’s most recent MD&A, the continuing operations of the Company are dependent
upon its ability to continue to raise adequate financing, to commence profitable operations in the future,
and repay its liabilities arising from normal business operations as they become due. There remains a
significant risk that the Company is unable to find alternative sources of financing for on-going working
capital requirements. These material uncertainties cast significant doubt upon the Company’s ability to
continue as a going concern.
Failure to obtain sufficient financing could result in a delay or abandonment of the Goondicum ilmenite
mine and could force the Company into reorganization, bankruptcy or insolvency proceedings. Additional
financing may not be available when needed or, if available, the terms of such financing might not be
favourable to the Company and might involve substantial dilution to existing shareholders. Failure to raise
capital when needed would have a material adverse effect on the Company’s ability to pursue its
business strategy, and accordingly could negatively impact the Company’s business, financial condition
and results of operations.
For further information please contact:
MELIOR RESOURCES INC.
Mark McCauley
Chief Executive Officer
+61 7 3233 6300
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.