The Metals Royalty Company has secured a fully allocated $165 million financing package to fund its acquisition of an additional 1% royalty interest in the Mesabi Metallics iron ore project in Minnesota and repay existing indebtedness.
The financing consists of a $140 million private placement of secured convertible notes and a $25 million senior secured term loan facility.
Proceeds will primarily support the company’s previously announced acquisition of an additional 1.0% Index-Priced Gross Overriding Production Royalty with a Revenue Floor in the Mesabi Metallics project from Ironclad Royalties.
The financing will also be used to repay The Metals Royalty Company’s existing senior term loan facility in full and provide capital for general corporate purposes.
The company expects the convertible note offering, term loan funding and closing of the additional Mesabi royalty acquisition to occur concurrently on or around August 24, 2026.
The $140 million convertible note offering has been allocated to institutional and accredited investors through a private placement.
The notes have a five-year maturity and carry an 8% annual coupon.
During the first year, the coupon consists of 6% cash interest and 2% payment-in-kind interest.
The second-year structure increases the cash component to 7% while reducing payment-in-kind interest to 1%.
For years three through five, the entire 8% coupon will be payable in cash.
The notes have an initial conversion price of approximately $8.66 per share, representing a 37.5% premium to the $6.30 reference price established for the transaction.
They will rank as senior secured second-lien obligations, guaranteed by The Metals Royalty Company’s subsidiaries and subordinated in lien priority to the new term loan facility.
The separate $25 million senior secured term loan carries an interest rate of Term SOFR plus 4% annually.
The loan has an initial maturity of 24 months and includes an option for a 12-month extension.
It will rank as a first-lien senior secured obligation and will also be guaranteed by the company’s subsidiaries.
As part of the loan financing, The Metals Royalty Company will issue the lender 500,000 common share purchase warrants.
The warrants will have a five-year term and an exercise price representing a 37.5% premium to the $6.30 reference price.
The company has also entered into a term sheet with Ironclad to modify the consideration structure for the additional Mesabi royalty acquisition.
Under the proposed amendment, the equity portion of the purchase price would increase to $27.5 million from $7.5 million, with a corresponding reduction in the amount of cash consideration.
The number of shares issued to Ironclad will be determined using the $6.30 reference price.
The revised transaction structure allows The Metals Royalty Company to preserve additional cash while still completing the expansion of its royalty position in the Mesabi project.
The Mesabi Metallics project is located in Nashwauk, Minnesota, and the additional royalty would expand The Metals Royalty Company’s exposure to a strategically significant U.S. iron ore asset.
The company positions itself as a financing platform focused on U.S. critical mineral security and re-industrialization.
Its strategy centers on acquiring royalties, streams and other structured economic interests across metals and mineral assets supporting areas including defense, AI infrastructure, energy systems and industrial capacity.
Unlike direct mine ownership, the royalty model is intended to provide exposure to long-term commodity production and potential upside while reducing direct exposure to many of the operating and development risks associated with producing mineral assets.
The $165 million financing significantly expands the company’s capital structure as it moves to increase its Mesabi exposure while refinancing existing debt.
