Pulsar Helium to receive up to $12.5M (U.S.) financing

Executive Summary

• Pulsar Helium Inc. has received a non-binding expression of interest from University Bank for up to US$12.5 million in project financing to construct a helium processing plant at its Topaz project in Minnesota.
• The company also announced an extension of the maturity date on an existing US$4 million line of credit for its subsidiary, Keewaydin Resources Inc., extending the maturity from March 31, 2026, to November 30, 2026.
• The proposed US$12.5 million facility carries a 12% annual interest rate, with interest-only payments for the first 24 months, followed by amortization over five years, and a final maturity after seven years.

Key Details

• New Financing Expression of Interest:
  • Lender: University Bank (wholly owned by University Bancorp Inc.).
  • Amount: Up to US$12.5 million.
  • Purpose: Construction of a helium processing plant at the Topaz project in Minnesota.
  • Status: Non-binding expression of interest; subject to definitive documentation and conditions precedent.
  • Interest Rate: 12% per annum.
  • Repayment Structure: Interest-only payments for the first 24 months, followed by full amortization over five years.
  • Maturity: Final maturity after seven years.
  • Fees: A 2% fee earned at closing, payable at the end of the interest-only period.
• Existing Credit Facility Extension:
  • Borrower: Keewaydin Resources Inc. (subsidiary of Pulsar Helium).
  • Original Facility: US$4 million project financing line of credit.
  • Current Drawn Amount: US$2.5 million.
  • New Maturity Date: November 30, 2026 (extended from March 31, 2026).
  • Extension Fee: 0.75% on the current drawn amount (US$18,750), payable at maturity.
• Conditions Precedent for New Financing:
  • Issuance of a final report by an independent resource estimator confirming sufficient proven helium reserves at Topaz to support plant construction.
  • Receipt of all required permits and legal title for production at Topaz.
  • Availability of sufficient working capital to finance remaining construction costs and operations through completion plus six months.
  • Approval by the board of directors of University Bank.
• Shareholder Context: University Bancorp currently holds approximately 4.9% of Pulsar Helium's issued share capital.

Notable Quotes

• "We are extremely grateful for University Bank's continued support and confidence in Pulsar. Their financing interest of lending Pulsar up to $12.5-million (U.S.) for the construction of a helium processing plant marks another important step towards delivering the Topaz project into production. This potential funding, alongside the extension of our existing line of credit, strengthens our ability to move forward decisively with construction planning and execution." — Thomas Abraham-James, President and CEO