TORONTO, May 5, 2020 /CNW/ – Canada Nickel Company Inc. (TSX-V:CNC) (“Canada Nickel” or the “Company”) is pleased to announce that it has closed its previously announced brokered private placement financing for aggregate gross proceeds of $4,449,670 (the “Offering“) of (i) 1,642,890 units of the Company (the “Units“) at an offer price of $0.35 per Unit, (ii) 4,390,000 common shares of the Company each of which qualifies as a “flow-through share” (the “Flow-Through Shares“) as defined in subsection 66(15) of the Income Tax Act (Canada) (the “Tax Act“) at an offer price of $0.40 per Flow-Through Share, and (iii) 4,113,900 flow-through units of the Company (the “FT Units“) at an offer price of $0.515 per FT Unit.
“With the completion of this financing which was upsized by 80% to $4.4 million despite challenging market conditions, Canada Nickel is well positioned to advance its Crawford Nickel-Cobalt sulphide project. We appreciate the support from our existing investors and welcome a number of new investors to Canada Nickel.”
Mark Selby, Chair & CEO of Canada Nickel
Each Unit consists of one common share of the Company and one-half of
one transferable common share purchase warrant of the Company (each
whole common share purchase warrant, a “Warrant“). Each Warrant entitles the holder thereof to acquire one common share of the Company at a price of $0.57
per common share for a period of 30 months following the closing date
of the Offering, subject to adjustment and acceleration in certain
events.
Each FT Unit consists of one common share of the Company which
qualifies as a “flow-through share” as defined in subsection 66(15) of
the Tax Act (the “FT Unit Shares“) and one-half of one transferable common share purchase warrant of the Company (each whole common share purchase warrant, a “FT UnitWarrant“). Each FT Unit Warrant entitles the holder thereof to acquire one common share of the Company at a price of $0.57
per common share for a period of 30 months following the closing date
of the Offering, subject to adjustment and acceleration in certain
events.
The Offering was led by PI Financial Corp. on behalf of a syndicate
of agents that included Red Cloud Securities Inc. and Haywood Securities
Inc. (together, the “Agents“). In consideration for their
services, the Company paid the Agents a cash commission equal to 6.0% of
the number of Units, FT Units and Flow Though Shares sold under the
Offering. In addition, the Company issued to the Agents non-transferable
compensation warrants, entitling the Agents to purchase that number of
common shares of the Company equal to 6.0% of the number of Units,
Flow-Through Shares and FT Units, respectively, issued by the
Company under the Offering. The Agents are working with a charitable
promoter in respect of the sale of the FT Units.
The net proceeds from the sale of the Units will be used by the
Company to fund advancement of the Company’s Crawford Nickel-Cobalt
Sulphide Discovery and for general working capital purposes. The gross
proceeds from the sale of the FT Shares and FT Units will be used to
incur “Canadian exploration expenses” that qualify as “flow-through
mining expenditures” (as both terms are defined in the Tax Act) (the “Qualifying Expenditures“) related to the Company’s projects in Ontario. The Qualifying Expenditures will be renounced to the subscribers with an effective date no later than December 31, 2020,
in the aggregate amount of not less than the total amount of the gross
proceeds raised from the issue of FT Shares and the portion of the
aggregate issue price for the FT Units that is allocable to the FT Unit
Shares.
Mark Selby an officer and a director of the Company, and Mike Cox and David Smith,
directors of the Company, subscribed for an aggregate of 220,357 Units
under the Offering on the same terms as arm’s length investors. The
participation of Mark Selby, Mike Cox and David Smith in the Offering constitutes a “related party transaction” for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“).
The Company is exempt from the requirements to obtain a formal
valuation or minority shareholder approval in connection with the
Offering in reliance on sections 5.5(a) and 5.7(1)(a) of MI 61-101, as
neither the fair market value of the securities issued to Mr. Selby, Mr.
Cox and Mr. Smith nor the fair market value of the consideration for
the securities issued to Mr. Selby, Mr. Cox and Mr. Smith exceeds 25% of
the Company’s market capitalization as calculated in accordance with MI
61-101. The Company did not file a material change report containing
all of the disclosure required by MI 61-101 more than 21 days before the
expected closing date of the Offering as the aforementioned insider
participation had not been confirmed at that time and the Company wished
to close the Offering as expeditiously as possible.
All securities issued under the Offering will be subject to a hold period expiring four months and one day which will expire September 6, 2020. The Offering is subject to final acceptance of the TSX Venture Exchange. The
securities offered have not been registered under the U.S. Securities
Act of 1933, as amended, and may not be offered or sold in the United States
absent registration or an applicable exemption from the registration
requirements. This press release shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of
the securities in any State in which such offer, solicitation or sale
would be unlawful.
Neither the Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the Exchange) accepts responsibility
for the adequacy or accuracy of this release.
About Canada Nickel Company
Canada Nickel Company Inc. is advancing the next generation of
nickel-cobalt sulphide projects to deliver nickel and cobalt required to
feed the high growth electric vehicle and stainless steel markets.
Canada Nickel provides investors with leverage to nickel and cobalt with
low political risk. Canada Nickel is currently anchored by its 100%
owned flagship Crawford Nickel-Cobalt project in the heart of the
prolific Timmins-Cochrane mining camp.
This press release contains certain information that may constitute
“forward-looking information” under applicable Canadian securities
legislation. Forward looking information 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 Flow-Through Shares and
FT Unit Shares; the timing of the tax renunciation to the subscribers;
and statements regarding exploration results and exploration plans.
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 results of drilling, inability to raise the money
necessary to incur the expenditures required to retain and advance the
property, 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.
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.
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