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Canada Nickel closes $12million bought deal placement of Flow-Through shares

Jul 28, 2021

“The closing of this financing allows us to remain well-funded through the end of the year and provides significant financial flexibility as we drive our successful exploration program forward, demonstrated by our latest success at Nesbitt, and advance our discussions with potential strategic partners.” said Mark Selby, Chair and CEO.

Canada Nickel Company Inc. has announced the completion of its previously announced "bought deal" brokered private placement of an aggregate of 2,981,000 "flow-through shares" of the company. The issue price is C$4.10 per FT Share, for aggregate gross proceeds of C$12,222,100, including the exercise in full of the underwriters' 15% over-allotment option.

The Offering was led by Cantor Fitzgerald Canada Corporation and Echelon Wealth Partners Inc. as joint bookrunners and lead underwriters and a syndicate of underwriters that included Haywood Securities Inc., PI Financial Corp., Research Capital Corp. and Red Cloud Securities Inc., (collectively, the " Underwriters "). In consideration of their services, the Company paid the Underwriters a cash commission of 6.0% of the gross proceeds of the Offering.

The gross proceeds from the sale of the FT Shares will be used by the Company to incur eligible “Canadian exploration expenses” that qualify as “flow-through mining expenditures” as both terms are defined in the Income Tax Act (Canada) (the “Qualifying Expenditures”), related to the Company’s projects in Ontario. The Qualifying Expenditures will be renounced in favour of the subscribers of the FT Shares with an effective date no later than December 31, 2021, and in the aggregate amount not less than the total amount of the gross proceeds raised from the issuance of the FT Shares. Upon completion of the Offering, the Company is expected to have 88,134,185 common shares outstanding.

All securities issued under the Offering will be subject to a hold period expiring four months and one day from the date of issuance, being November 28, 2021.

Certain directors and officers of the Company subscribed for an aggregate 46,500 FT Shares under the Offering on the same terms as arm's length investors. The participation of the directors and officers 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 the directors and officers nor the fair market value of the consideration for the securities issued to the directors and officers 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.

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