Canada Nickel forms and partially sells RoyaltyCo Subsidiary, modifies debt payment
Canada Nickel Company Inc. has announced the signing of a binding Letter of Intent with Edmiston Drive Capital Corp. whereby a new royalty company will be created to hold net smelter return 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.
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
An extension fee of US$168,233 will be paid by April 25, 2025. The loan will carry an interest rate of 1.25% per month for the extension period. The interest payable on the original loan amount has also been deferred to April 25th, 2025.
Canada Nickel will grant 1% NSR royalty interests in the subject properties to RoyaltyCo, which will then (subject to the satisfaction of closing conditions) amalgamate with a wholly owned subsidiary of EDCC in exchange for C$ 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.
Canada Nickel Company Inc. has also announced that it has extended the repayment date of the US$15 million loan facility announced July 9, 2024 with Auramet International, Inc. (“Auramet”) from March 14, 2025 to April 25th, 2025.
Mark Selby, CEO and Director of Canada Nickel Company, said “I am pleased that we are extending repayment of our loan with Auramet to April 25, 2025 allowing us to complete various strategic financing initiatives during this timeframe.”
Loan Extension
An extension fee of US$168,233 will be paid by April 25, 2025. The loan will carry an interest rate of 1.25% per month for the extension period. The interest payable on the original loan amount has also been deferred to April 25th, 2025.
About Auramet
Auramet is one of the largest physical precious metals merchants in the world with over US$25 billion in annual revenues and which provides a full range of services to all participants in the precious metals supply chain. Auramet is a private company established in 2004 by seasoned professionals who have assembled a global team of industry specialists with over 350 years combined industry experience. Their business consists of three main activities: physical metals trading, metals merchant banking (including direct lending) and project finance advisory services. The company has built a consistently successful and prominent franchise in the metals space on the back of an experienced management team that has proven to be innovative and capable of delivering the highest quality service to participants in the sector. In fiscal year 2024 it purchased 7.4 million ounces of gold, 118 million ounces of silver and 4 million ounces of PGMs, and has provided term financing facilities in excess of US$1.25 billion to date. Auramet is looking to grow its capital investment business in equity, royalties and streams in the precious metals and battery related metals mining space. For more information on Auramet, please visit www.auramet.com.
About Canada Nickel Company
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 is currently anchored by its 100% owned flagship Crawford Nickel Sulphide Project in the emerging Timmins Nickel District. Canada Nickel Company has applied in multiple jurisdictions to trademark the terms NetZero NickelTM, NetZero CobaltTM, NetZero IronTM 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.
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