CNC.V · 2022-12-19 12:00:00

Canada Nickel Acquires Past Producing Texmont Mine, Highlights High Grade Potential of Regional Land Package

Mergers & Acquisitions

Canada Nickel Acquires Past Producing Texmont Mine,

Highlights High Grade Potential of Regional Land Package

Highlights

• Provides potential for near -term open pit production from near -surface high grade

mineralization at Texmont.

• High grade potential of regional package already demonstrated at multiple properties –

Texmont, Sothman, Bannockburn. Mineralization outcrops at all three properties

• Texmont – Historic resource1 of 3.2 million tonnes of 0.9% nickel hosted within

bulk tonnage target.

• Sothman – Historic resource2 of 190,000 tons grading 1.24% nickel

• Bannockburn – Historic drilling with multiples intervals greater than 2%

• Crawford PGM zone results include two holes with core length of 30 metres of 1.82 g/t

palladium + platinum and 15.0 metres of 1.88 g/t platinum + palladium

TORONTO, December 19, 2022 – Canada Nickel Company Inc. ("Canada Nickel" or the "Company")

(TSXV: CNC) (OTCQX: CNIKF) today announced that it has signed a deal to acquire a 100% interest in the

past producing Texmont property situated between the Company’s Deloro and Sothman properties south

of Timmins, Ontario. The Company is also reporting results from the first four holes at Texmont and first

five holes targeting higher grade mineralization at Sothman. All nine holes have assays pending.

Mark Selby, Chair & CEO of Canada Nickel Company, “The acquisition of the Texmont property provides

near-term smaller scale production potential and is highly complementary to our large-scale Crawford

and regional nickel sulphide projects. We are excited by the potential for leveraging the understanding

of the geology at Texmont and additional high-grade areas at Sothman and Bannockburn and applying

these learnings to our large regional property package. In our discussions with nickel consumers for the

battery market, many of them are keen to have new nickel production that could come to market by 2025.

Similarly, a number of investors have expressed interest in financing near-term production.”

1 The Texmont historical resource estimate is unclassified and does not comply with CIM Definition Standards on

Mineral Resources and Mineral Reserves as required by NI-43-101. The historical resource was reported by Fletcher

Nickel Inc. at page 22 (“Texmont Historic Reports – Leigh 1971 Report”) of its amended and restated prospectus

dated October 25, 2007.

2 The Sothman historical resource estimate is unclassified and does not comply with CIM Definition Standards on

Mineral Resources and Mineral Reserves as required by NI 43-101. The historical resource was reported by D. R.

Bell for Sothman Mines Limited on Oct. 1, 1969, as 189,753 tons of 1.24% nickel using a 1.00% nickel cut-off.

The reliability of these historical resources is considered reasonable, but a qualified person has not done sufficient

work to classify the historical resource estimate as a current mineral resource and the Company is not treating the

historical resource estimate as a current resource. The Company plans on conducting an exploration program to

redefine the historical resource as a current mineral resource category.

Texmont Property

The Texmont Property is located 36 kilometres south of Timmins and contains an ultramafic body with a

target geophysical footprint approximately 1.2 k ilometres long by 150 metres wide (see Figure 1). A

historic resource estimate of 3.2 million tonnes grading 0.9 % nickel was reported (Leigh, 1971) (See note

above regarding Texmont historical resource estimate). A mine and mill operated on the site from July

1971 to December 1972 at a rated capacity of 500 t ons per day . The total amount milled cannot be

confirmed as the data and final stope plans are not available. The mine targeted narrow nickel

mineralization in excess of 1.0%. Canada Nickel believes that this high-grade mineralization is contained

within a larger bulk tonnage deposit that extends to surface. Initial drilling results from our ongoing drilling

program confirms the presence of high-grade mineralization in ultramafic rock, as well as currently

undefined lower grade, wider intervals, that were disregarded during previous mining. To date, Canada

Nickel has drilled four drill holes, all intersecting significant intervals of mineralization within the target

ultramafic (see Tables 1 & 2).

From 2006-2008, Fletcher Nickel drilled 28, 883 metres and filed a technical report published June 25th,

2009, which has not been incorporated into a resource estimate . Drilling continues at Texmont with

several holes planned for winter 2023, with the goal of producing a current resource estimate using

historic and new data, as the basis for a n open pit mine plan to support a potential restart by 2025 or

provide a source of higher-grade feed for the Crawford Nickel Sulphide project.

Texmont Historic Drilling3

Drilling in the 2000’s intersected well mineralized and serpentinized ultramafic rocks described as

predominantly komatiites-peridotites. The drilling produced several significant intersects. For example,

hole TEX07-13 intersected 1.23 % nickel over 28.0 metres, including 2.45% nickel over 7.0 metres. A

sample of historical drill results is shown in Table 3. Groundwork performed by Canada Nickel has followed

up on the location of this high -grade intersections, with the sampling on surface of strongly mineral ized

horizons. (Figure 2)

Recent Activity

This release provides an update with logging information from the first four holes in our ongoing drill

program at Texmont. True widths are unknown at this point.

The first three holes intersected mineralization immediately after overburden, confirming its continuation

to surface. Higher sulphide mineralization was intersected as expected over intervals of 16.0-25.0 metres

in all three holes within overall mineralized intervals of whole core lengths, and was found in outcrop .

(See Figure 2).

Holes TXT22-01 and TXT22-02 collared on the same setup with both holes drilling to the west. TXT22 -01

collared in ultramafic containing strongly disseminated, blebby nickel sulphide mineralization, to the end

of hole at 249 metres (Figure 3). TXT22 -02 drilled at a shallower angle ( -45) on th e same section and

3 See note above regarding historical Texmont resource estimate. A qualified person has not done s ufficient work on

behalf of Canada Nickel to verify the data.

intersected moderate to strongly mineralized ultramafic to the end of hole at 126 metres. Both holes were

interrupted only by minor late gabbro dykes.

TXT22-03 drilling to the east, collared in peridotite at 1.7 metres and continued in mineralized peridotite

for 150 meters to the end of hole. Mineralization consisted of moderate to strongly disseminated, blebby

nickel sulphide mineralization.

TXT22-04 collared off the anomaly in mafic volcanics with the target of delineating the potentia l wider

resource envelopes of low to moderate grade (Figure 3). The hole targeted to cut across all hanging wall

and footwall stratigraphy to gain an understanding of geology, structure, and grade variation outside of

the higher-grade core. The hole inters ected a mineralized peridotite at 127.3 metres and continued in

variably mineralized peridotite to 308 metres with only minor intervening dykes. The hole ended in

volcanic footwall rock at 343 metres.

Figure 1 – Plan View of Texmont – Historic Assays and CNC 2022 Drilling on Total Magnetic Intensity

Table 1: Texmont Drillhole Orientation

Hole ID Easting Northing Azimuth Collar Dip Length

(mE) (mN) (⁰) (⁰) (m)

TEX22-01 484872 5334590 270 -78 249.0

TEX22-02 484872 5334590 270 -50 126.0

TEX22-03 484802 5334530 90 -65 150.0

TEX22-04 484985 5334595 270 -50 350.0

Figure 2 – Texmont High grade grab sample – Nickel mineralization

Figure 3 – Core samples from Textmont. TEX22-01 and TEX22-04

Figure 4 – Cross Sections of Texmont – Historic Assays and potential mineralized envelope

*Cross sections are 60 m thickness. Mineralized envelope is inferred from historic drilling.

Table 2: Texmont Selected Logged intervals

Hole # From

(m)

Length

(m) Mineralization*

TEX22-01 7.0 249.0 242.0 Average 2% sulphides

including 22.0 31.1 9.0 2-5% sulphides

including 49.0 94.3 45.3 2-5% sulphides

including 111.0 127.5 16.5 5- 10% sulphides

including 148.5 165.5 17.0 5-10% sulphides

TEX22-02 6.0 126.0 120.0 Average 1% sulphides

including 24.0 51.0 27.0 2-5% sulphides

and 71.3 126.0 54.7 ~ 1% sulphides

TEX22-03 1.0 150.0 149.0 Average 2% sulphides

including 129.3 145.0 15.7 5-10% sulphides

TEX22-04 127.3 325.0 197.7 Average 2% sulphides

including 127.8 147.3 19.5 5-10% sulphides

181.0 214.0 33.0 2-5% sulphides

*Mineralization is indication of level of sulphides, nickel content of those sulphides may vary.

Nickel content can only be determined by assays.

Table 3: Historical Drilling – Texmont Selected intervals

Hole ID From To Length Ni Co

(m) (m) (m) (%) (%)

TEX06-01 9.0 129.6 120.6 0.41 0.01

Including 23.0 38.0 15.0 1.02 0.02

TEX06-02 44.6 67.5 22.9 0.42 0.01

Including 54.0 67.5 13.5 0.52 0.01

TEX06-04 65.0 84.4 19.4 0.46 0.02

Including 78.0 84.4 6.4 0.66 0.02

TEX06-05 33.5 64.4 30.9 0.62 0.02

Including 47.0 52.5 5.5 1.15 0.03

and 81.0 140.0 59.0 0.35 0.01

TEX06-07 56.0 113.7 57.7 0.44 0.02

Including 67.0 81.0 14.0 0.95 0.03

TEX07-13 302.5 401 98.5 0.53 -

Including 321.0 349.0 28.0 1.23 -

Including 338.0 345.0 7.0 2.45 -

TEX08-32 341.0 428.0 87.0 0.63 -

Including 345.0 374.0 29.0 1.24 -

Including 351.0 361.0 10.0 2.23 -

TEX08-112 193.1 210.5 17.4 0.51 -

Including 202.0 209.0 7.0 0.95 -

TEX08-113 231.0 271.3 40.3 0.91 -

Including 231.9 251.0 19.1 1.44 -

Transaction terms

The Company has entered into a binding agreement to acquire a 100% interest (subject to certain third-

party rights described below) in 14 mining leases in exchange for a $250,000 cash payment and issuing a

non-interest bearing promissory note of $3.75 million due March 14, 2023. At closing, the seller will be

granted a 2% net smelter returns royalty, which can be bought down to 1% for $2.5 million at the

Company's option. The property has a legacy ownership interest of 15% and net profits interest of 10%.

The Company intends to determine whether these interests are still valid. The Company had previously

acquired 14 claims surrounding these mining leases in 2022 as part of its regional property consolidation.

Red Cloud Securities Inc. acted as financial advisor on behalf of Canada Nickel with respect to the

Transaction.

Sothman Nickel Property

The Sothman property is approximately 1,100 hectares, located 70 km south of Timmins and contains an

ultramafic target that measures 2.2 kilometres east-west by 200 metres north-south (Figure 5).

Ten drillholes have been drilled to date. Information for the first five holes is found in previous release

(December 1st, 2022). The next five holes reported in this release were drilled on the western end of the

target anomaly, where the historical resource was located, to confirm the high-grade mineralization and

the potential for larger, adjacent intervals of lower grade mineralization (Table 4). These holes succeeded

in confirming the presence of high -grade mineralization within wider i ntervals of 100 to 120 metres of

mineralization throughout (see Table 5). Assays from all holes are pending.

Drilling continues in the Sothman property with one hole planned for downhole geophysics to aid in the

understanding and targeting the centre of th e higher-grade core as the Company believes that these

geological structures have the potential for additional nickel lenses, particularly given the last geophysical

and drilling work took place in the early 1970s. Assays from all holes are pending

Table 4: Sothman Drillhole Orientation

Hole ID Easting Northing Azimuth Collar Dip Length

(mE) (mN) (⁰) (⁰) (m)

SOT22-06 481748 5299478 183 -45 200

SOT22-07 481748 5299478 183 -60 251

SOT22-08 481748 5299478 150 -45 170

SOT22-09 481706 5299498 180 -50 251

SOT22-10 481706 5299498 180 -70 179

SOT22-06, SOT22-07 and SOT22-08 collared in volcanics on the same setup behind an outcrop with high-

grade mineralization (Figure 6). SOT22-08 exited the dunite into volcanics and suggests the high -grade

zone pinches out quickly to the east . SOT22-06 and SOT22 -07 r emained in moderate to strongly

serpentinized and mineralized dunite to the end of hole, indicating the high -grade host rock expands to

150 metres in thickness westward across most of its estimated strike length of 300 metres.

SOT22-08 is drilled to the southeast in semi -parallel orientation to strike but perpendicular to measured

high-grade shoots. Strong nickel mineralization occurs in pervasive disseminated sulphides as well as

patchy blebs with a sharp lower contact against mafic volcanics.

Figure 5 – Plan View of Sothman – Drill results Overlain on Total Magnetic Intensity

SOT22-09 and SOT22-10 are drilled 50 metres northwest of SOT22 -08 collaring in mafic volcanics, both

drilling to the south. Both holes intersected serpentinized dunite and peridotite with varying amounts of

mineralization predominantly pyrrhotite and pentlandite.

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