Pure Nickel Closes Three Million Dollar Convertible Debenture Financing with Eric Sprott
Pure Nickel Closes Three Million Dollar Convertible
Debenture Financing with Eric Sprott
Toronto, Ontario--(Newsfile Corp. - September 5, 2019) - Pure Nickel Inc. (TSXV: NIC) (the "Company" or "Pure Nickel") is
pleased to announce that it has closed its previously announced transaction with Eric Sprott, through 2176423 Ontario Ltd., a
corporation that is beneficially owned by him, pursuant to which Pure Nickel has issued to 2176423 Ontario Ltd. a Convertible
Debenture ("Debenture") in the amount of $3,000,000.
The Debenture has a term of two years and bears interest at a rate of 8% per annum. The Debenture is convertible into common
shares at a price of $0.05 per share for the first 12 months of the term and at $0.10 per share thereafter until maturity. Mr. Sprott
shall only be entitled to exercise the Debenture to the extent that Mr. Sprott will own (together with any person acting jointly or in
concert with Mr. Sprott), directly or indirectly, not more than 19.9% of the issued and outstanding common shares of the
Company immediately following such exercise
(the "Restriction") until such time as shareholders of the Company have approved
Mr. Sprott as a control person of the Company in accordance with the requirements of the TSX Venture Exchange. The
Company has paid a commission of 3% cash and 3% shares at $0.05 per share in relation to the Debenture. The Debenture
and shares issuable upon conversion will be subject to a statutory hold period lasting four months and one day following the date
of issuance.
The Company will use proceeds from the issuance of the Debenture to fund the completion of the previously announced merger
with Explor Resources Inc. ("Explor") and for the advancement of the Timmins Porcupine West Gold Property (the "TPW
Property") located in the Timmins Porcupine Mining Camp in Ontario.
The Company's press release dated August 22, 2019
outlines the terms of an Amalgamation Agreement with Explor. Following shareholder approval of the proposed merger, and
approval for Mr. Sprott to be a control person of the Company, if Mr. Sprott converts the entire Debenture, he will have
approximately a 29% interest in the new company and Pure Nickel shareholders and Explor shareholders will have
approximately a 31% and a 40% interest respectively. The completion of the proposed merger is subject to all necessary
shareholder and regulatory approvals.
Prior to the issuance of the Debenture, Mr. Sprott owned and controlled 10,221,732 common shares of the Company
representing approximately 12.4% of the then outstanding common shares of the Company. Mr. Sprott now beneficially owns
and controls 10,221,732 common shares of the Company and the Debenture representing approximately 12.1% of the
outstanding common shares on a non-diluted basis and 19.9% of the outstanding common shares on a partially diluted basis
assuming conversion of the Debenture and that the Restriction is still effective. If requisite approvals have been obtained to allow
Mr. Sprott to be a control person, Mr. Sprott will beneficially own and control 10,221,732 shares and the Debenture representing
approximately 12.1 % of the outstanding shares on an undiluted basis and 48.6% of the outstanding shares on a partially diluted
basis assuming full conversion of the Debenture at $0.05 per Share.
Mr. Sprott acquired the Debenture for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire
additional securities of the Company, including on the open market or through private acquisitions, or sell the securities,
including on the open market or through private dispositions, in the future depending on market conditions, reformulation of plans
and/or other relevant factors. A copy of 2176423 Ontario Ltd.'s early warning report will appear on the Company's profile on
SEDAR and may also be obtained by calling Mr. Sprott at (416) 362-7172 (200 Bay Street, Suite 2600, Royal Bank Plaza,
South Tower, Toronto, Ontario M5J 2J1).
About Pure Nickel Inc.
Since the start of 2019, Pure Nickel has made strategic steps to expand its focus to include gold and silver exploration. Upon
completion of the proposed merger with Explor, the Company will have two advanced staged gold exploration projects - its
partnership with Eric Sprott on the Neal Project in Idaho and the Timmins Porcupine West Project in Ontario. Both exploration
projects are expected to continue to return positive exploration results and hold the potential to be advanced to production.
For further information:
Pure Nickel Inc.
R. David Russell
Chairman and CEO
T. (416) 644-0066
www.purenickel.com
Forward Looking Statements
Some of the statements contained herein may be forward-looking statements which involve known and unknown risks and
uncertainties. Without limitation, statements regarding potential mineralization and resources, exploration results, expectations,
plans, and objectives of Pure Nickel are forward-looking statements that involve various risks. The following are important factors
that could cause Pure Nickel's actual results to differ materially from those expressed or implied by such forward-looking
statements: changes in the world-wide price of mineral commodities, general market conditions, risks inherent in mineral
exploration, risks associated with development, construction and mining operations, the uncertainty of future exploration
activities and cash flows, and the uncertainty of access to additional capital. There can be no assurance that forward-looking
statements will prove to be accurate as actual results and future events may differ materially from those anticipated in such
statements. Pure Nickel undertakes no obligation to update such forward-looking statements if circumstances or management's
estimates or opinions should change. The reader is cautioned not to place undue reliance on such forward-looking statements.
Neither the 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.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/47573