Canada Nickel to receive $8 million in cash and 8.9 million shares and hold 62% interest in RoyaltyCo
TORONTO, March 18, 2025 /PRNewswire/ - Canada Nickel Company Inc. ("Canada Nickel" or the "Company") (TSX-V:CNC) (OTCQB: CNIKF) is pleased to announce the signing of a binding Letter of Intent (the "LOI") with Edmiston Drive Capital Corp. ("EDCC") on March 17, 2025 whereby a new royalty company ("RoyaltyCo") will be created to hold net smelter return ("NSR") royalties on all of Canada Nickel regional exploration properties in the Timmins Nickel District with the exception of Crawford and other targets (Kingsmill and Dargavel) located on the original Project 81 patents.
Canada Nickel Company Inc. logo (CNW Group/Canada Nickel Company Inc.)
Subject to the satisfaction of applicable conditions precedent, Canada Nickel anticipates it will receive $8 million in cash and 8.9 million shares of EDCC to hold a 62% interest in EDCC upon closing.
Mark Selby, Canada Nickel's CEO, said: "We are very excited to work with EDCC toward the creation of a new royalty company which will hold NSR royalties of the Company's portfolio of properties in the Timmins Nickel District which, when combined, we expect to be among the world's largest nickel sulphide resources. We have published resources on two of these properties and expect to announce a further six resources by mid-2025. This transaction is just one further step in unlocking value while minimizing equity dilution for Canada Nickel shareholders. This world scale portfolio is just the start for EDCC, which will seek the acquisition or creation of new royalties and streams that align with its low carbon and low environmental footprint objectives."
RoyaltyCo Formation and Transaction Details
Canada Nickel will grant 1% NSR royalty interests in the subject properties to RoyaltyCo, which will then (subject to the satisfaction of closing conditions) amalgamate with a wholly owned subsidiary of EDCC in exchange for C$ 8 million in cash and 8.9 million common shares of EDCC. One such closing condition is the completion by EDCC of a financing whereby $9 million will be raised through the issuance of a combination of common and preferred shares. The proceeds of such financing will be used for the closing payment to Canada Nickel and for general corporate purposes. After giving effect to the financing, Canada Nickel expects that its equity interest in EDCC will be approximately 62%. EDCC is a reporting issuer in Ontario, British Columbia, and Alberta, which may allow for a more straightforward listing, if and when EDCC determines that a stock exchange listing is in the best interest of its shareholders.
The terms of the LOI are binding subject to the satisfaction of certain closing conditions.
The board of directors of EDCC, following completion of the transaction, shall consist of one director appointed by the current directors of EDCC, two directors appointed by Canada Nickel, and two independent directors.
The transaction is expected to close by April 30, 2025 and, among other approvals, is subject to any required approvals of the TSX Venture Exchange (the "TSXV").
About Canada Nickel
Canada Nickel Company Inc. is advancing the next generation of nickel-sulphide projects to deliver nickel required to feed the high growth electric vehicle and stainless-steel markets. Canada Nickel Company has applied in multiple jurisdictions to trademark the terms NetZero Nickel™, NetZero Cobalt™, NetZero Iron™ and is pursuing the development of processes to allow the production of net zero carbon nickel, cobalt, and iron products. Canada Nickel provides investors with leverage to nickel in low political risk jurisdictions. Canada Nickel is currently anchored by its 100% owned flagship Crawford Nickel-Cobalt Sulphide Project in the heart of the prolific Timmins-Cochrane mining camp. For more information, please visit www.canadanickel.com.
About EDCC
EDCC was incorporated under the laws of British Columbia in July of 2022 for the purpose of making investments via mergers, takeover bids, or other transactions. EDCC is a "Reporting Issuer" in British Columbia and Ontario and is a "Public Company" as defined in the Income Tax Act (Canada). EDCC's sponsor and largest shareholder is Copland Road Capital Corp. ("CRCC"), a corporation continued under the laws of British Columbia whose shares are listed on the Canadian Securities Exchange under the ticker symbol "CRCC".
This press release contains certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward looking information in this news release includes, but is not limited to: the use of proceeds of the Offering; the timing and ability of the Company, if at all, to obtain final approval of the Offering from the TSX Venture Exchange; the tax treatment of the FT Shares; the timing of incurring the Qualifying Expenditures and the renunciation of the Qualifying Expenditures; upgrading existing mineral resources; publishing new mineral resources on additional properties, including the timing thereof; and statements regarding exploration results, exploration plans and other corporate and technical objectives. Forward-looking information is necessarily based upon a number of assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Factors that could affect the outcome include, among others: future prices and the supply of metals, the future demand for metals, the results of drilling, inability to raise the money necessary to incur the expenditures required to retain and advance the Company's properties, environmental liabilities (known and unknown), general business, economic, competitive, political and social uncertainties, results of exploration programs, risks of the mining industry, delays in obtaining governmental approvals, and failure to obtain regulatory or shareholder approvals. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. 3 Accordingly, readers should not place undue reliance on forward-looking information. All forward looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. Canada Nickel disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
