Gen III Oil Corporation (“Gen III” or the “Company“) (TSX VENTURE:GIII) is pleased to announce that it has signed a 60-day exclusive term sheet for a CAD$72 million senior secured term loan credit facility (the “Facility“) for the Company’s wholly owned subsidiary, Gen III Oil (Alberta) Inc. (the “Gen III Alberta“) from an arm’s length third party commercial lender (the “Lender“). The net proceeds of the Facility are intended to be used to: fund the design and construction of a re-refinery of used motor oil in Alberta by Gen III Alberta (the “Project“), fund pre-commercial operations working capital, fund an interest and contingency reserve for the Facility and pay the fees and expenses in connection with the closing of the Facility. As contemplated, the Facility will be guaranteed by subsidiaries of the Company and the subsidiaries will grant as security for the Facility registered security interests over their respective assets in favour of the Lender. The Facility will subject to certain prepayment restrictions and prepayment premiums to be further set out in the definitive agreements respecting the Facility. The Facility is also subject to certain affirmative covenants by Gen III Alberta including having the Project operating within a prescribed period following commencement of construction and compliance with customary financial covenants to be further set out in the definitive agreement respecting the Facility.
The term sheet is non-binding and contains a list of key terms and conditions precedent for the establishment of commercial arrangements between the parties. Closing of the Facility is subject to customary conditions precedent, including: completion of satisfactory due diligence by the parties, execution and delivery of the definitive loan documents, receipt of all requisite third party consents and applicable regulatory approvals, grant of security interests for the Facility, funding of a contingency reserve and closing of an equity financing by the Company.
No securities of the Company are contemplated to be issued in connection with the Facility. Under the Term Sheet, the Company agrees to grant the Lender warrants to acquire up to 4% of the common equity of Gen III Alberta and reimburse the Lender all of its costs and expenses relating to the Facility and the transactions contemplated thereby.
About Gen III Oil Corporation
Gen III Oil Corporation is an innovative oil processing company with the most advanced re-refining technology in the industry. The Company’s patented ReGenTM technology process combines proven refining technologies into a proprietary process that is able to extract a higher quantity of high quality base lubricating oils than traditional re-refineries, including greater than 50% Group III production of synthetic grade motor oil in a commercial scale re-refining operation. The Company currently holds 4 patents granted in North America and has several patent applications, patents pending or under review in strategic countries around the world. The Company’s first full-scale facility is currently under development in Bowden, Alberta, 100km north of Calgary, with targeted production commencing in Q1 of 2019 (the “Project“) . With a fully executed off-take marketing agreement in hand with Elbow River Marketing Ltd., a subsidiary of Parkland Fuel Corporation, the Company has in place agreements for the sale of all of its finished products when commercial production begins at its Bowden facility. The Bowden facility is being designed to process 2,800 bpd of used motor oil into a range of base stocks and related petroleum products. For more information about the Company, please visit www.geniiioil.com.
On Behalf of the Board of Gen III Oil Corporation
Chief Executive Officer
For further information contact Greg Clarkes at (604) 806-5275
Suite 1750 – 400 Burrard Street
Vancouver, BC V6C 3A6
Tel: (604) 806-5275 Fax: (604) 806-4875
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.
Certain information set forth in this news release may contain forward-looking statements that involve financial projections, substantial known and unknown risks and uncertainties, certain of which are beyond the control of the Company. Forward-looking statements are frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. These include, but are not limited to, the statements regarding the quantity and quality of the re-refined products that might be produced; the cost of construction of the first ReGen re-refinery; raising sufficient capital to support the construction of the Project; the estimated operating costs for the Project; the market for the finished products; negotiating off-take agreements for those finished products; and the anticipated annual recurring revenue and EBITDA derived from those operations. Actual results may differ materially from the forward-looking information contained herein. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company assumes no obligation to update forward-looking statements, except as required by applicable law. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.