The Metals Royalty Company Inc. (NASDAQ: TMCR) has increased its royalty stake in the Mesabi Metallics iron ore project to 2.0%, up from 1.0%, as part of a broader financing package tied to the project's development in Nashwauk, Minnesota.
The transaction includes a $140 million offering of second-lien senior secured convertible notes with an 8.00% annual coupon, maturing in September 2031. The notes were priced at 95.0% of par, with a conversion price of $8.6625 per share, representing a 37.5% premium over the $6.30 reference price. EdgePoint Investment Group led the placement, while Scotiabank and William Blair served as placement agents.
In addition, Macquarie Bank Limited provided a $25 million senior secured term loan facility, structured with a Term SOFR-based interest rate of 4.00% per annum and a 24-month maturity. The facility includes 500,000 five-year common share purchase warrants. TMCR also increased its share consideration to Mesabi Investments (USA) LLC to $27.5 million, issuing 4,365,079 common shares as part of the agreement.
The Mesabi Metallics project, currently at approximately 99% completion, is expected to commission its first processing line in the third quarter of 2026, with initial production slated for the fourth quarter. Based on a projected annual output of 7.28 million tonnes over a 23-year mine life, the royalty could generate roughly $22 million in annual revenue. If production expands to 8.5 million tonnes per year, potential annual royalty revenue could rise to about $26 million.
TMCR acquired the additional 1.0% royalty interest from Ironclad Royalties, LLC. The company also holds a 2.0% royalty in The Metals Company's NORI polymetallic nodules project. Interest payments on the convertible notes are scheduled to begin on March 15, 2027, with the notes maturing on September 15, 2031. Early redemption is permitted starting September 15, 2029.
