The Metals Royalty Company Inc. (Nasdaq: TMCR) has closed on an additional 1.0% Index-Priced Gross Overriding Production Royalty in the Mesabi Metallics iron ore project in Nashwauk, Minnesota, doubling its total royalty interest in the project to 2.0%, according to a company statement.

The acquisition was funded through a $165 million financing package consisting of a $140 million offering of 8.00% convertible senior secured second lien notes due 2031 and a $25 million senior secured term loan from Macquarie Bank Limited. EdgePoint Investment Group anchored the convertible note offering. Net proceeds after fees, expenses, and original issue discount totaled approximately $150.9 million.

The company projects annual royalty revenue of approximately $22 million from the Mesabi Project, assuming production at 7.28 million tonnes per annum over a 23-year mine life. That figure could rise to approximately $26 million if the project expands to 8.5 Mtpa.

Mesabi Metallics has reported overall project completion at approximately 99%, with commissioning of the first processing line targeted for the third quarter of 2026 and first production targeted for the fourth quarter of 2026.

The convertible notes carry an 8.00% annual coupon, with a blended cash and payment-in-kind structure in years one and two, and full cash payment from year three onward. The initial conversion price is $8.6625 per share, representing a 37.5% premium to the reference price of $6.30 per share. The notes mature September 15, 2031.

The $25 million term loan carries an interest rate of Term SOFR plus 4.00% per annum and matures in 24 months, with a 12-month extension option. Macquarie received 500,000 common share purchase warrants at closing.

As part of the transaction, TMCR issued 4,365,079 common shares to Mesabi Investments (USA) LLC, representing $27.5 million in share consideration. The company's existing senior term loan facility was repaid in full at closing.

Scotiabank and William Blair acted as placement agents for the notes offering. TMCR also holds a 2.0% gross overriding royalty on the NORI polymetallic nodule project operated by The Metals Company Inc.