North American Nickel and Premium Nickel Resources Provide an Update on Business Combination, Including Receipt of Conditional Listing Approval of Stock Exchange for Resulting Issuer
North American Nickel and Premium Nickel
Resources Provide an Update on Business
Combination, Including Receipt of Conditional
Listing Approval of Stock Exchange for
Resulting Issuer
Toronto, Ontario--(Newsfile Corp. - July 21, 2022) -
Premium Nickel Resources Corporation
("PNR") and North American Nickel Inc. (TSXV: NAN)
("
NAN
") are pleased to provide certain
corporate updates in respect of their previously-announced reverse takeover transaction (the "
RTO
")
pursuant to which PNR would "go public" by way of a reverse takeover. In this news release, references
to the "
Resulting Issuer
" are to NAN after the closing of the RTO. As certain directors and officers of
NAN are also directors and officers of PNR, the Amalgamation Agreement (as defined herein) is
considered as a "Non-Arm's Length" agreement pursuant to the policies of the TSX Venture Exchange
(the "
Exchange
").
Transaction Particulars
On April 25, 2022, NAN, PNR and 1000178269 Ontario Inc. ("
NAN Subco
"), a wholly-owned subsidiary
of NAN incorporated under the
Business Corporations Act
(Ontario) (the "
OBCA
"), entered into an
amalgamation agreement (the "
Amalgamation Agreement
"), which provides for, among other things, a
three-cornered amalgamation (the "
Amalgamation
") pursuant to which (i) NAN Subco will amalgamate
with PNR under Section 174 of the OBCA to form one corporation, (ii) the securityholders of PNR will
receive securities of the Resulting Issuer in exchange for their securities of PNR at an exchange ratio of
1.054 common shares of the Resulting Issuer after giving effect to the Consolidation (as defined herein)
for each outstanding share of PNR (the "
Exchange Ratio
"), and (iii) the transactions will result in a RTO
of NAN in accordance with the policies of the Exchange, all in the manner contemplated by, and pursuant
to, the terms and conditions of the Amalgamation Agreement. A copy of the Amalgamation Agreement
is available electronically on SEDAR (
www.sedar.com
) under NAN's issuer profile.
As part of the RTO, and subject to any required shareholder and regulatory approvals, NAN will: (i)
change its name to "Premium Nickel Resources Ltd."; (ii) change its stock exchange ticker symbol to
"PNRL"; and (iii) reconstitute the board of directors (the "
Board Reconstitution
") and management of
the Resulting Issuer. The outstanding options of PNR immediately prior to the effective time of the RTO
will be exchanged and adjusted pursuant to the terms of the Amalgamation Agreement such that holders
thereof will be entitled to acquire, following the closing of the RTO, options of the Resulting Issuer after
giving effect to the Exchange Ratio, as applicable.
In addition, subject to any required shareholder and regulatory approvals, NAN intends to (i) consolidate
its common shares on the basis of one post-consolidation common share for each five (5) pre-
consolidation common shares (the "
Consolidation
"), (ii) continue from under the laws of the province of
British Columbia under the
Business Corporations Act
(British Columbia) to the laws of the province of
Ontario under the
Business Corporations Act
(Ontario) (the "
Continuance
"), and (iii) change the name
of the Resulting Issuer to "Premium Nickel Resources Ltd." (the "
Name Change
"). The Consolidation
and the Continuance are not condition precedents to the completion of the RTO.
The common shares of NAN will remain halted pending further filings with the Exchange. The Resulting
Issuer intends to qualify as a Tier 2 mining company on the Exchange.
NAN and PNR are also pleased
to announce that, earlier today, the Exchange granted conditional listing approval of the
Resulting Issuer in respect of the RTO.
No deposit, advance or loan has been made or is to be made in connection with the RTO. On March 3,
2022, NAN extended a loan of US$1 million to PNR, bearing an interest rate of 10% per annum which
was repaid by PNR in full on May 6, 2022
(the "
Loan
"). Additional information in respect of the Loan is
provided in the interim financial statements of NAN for the three month ended March 31, 2022, which are
available on SEDAR (
www.sedar.com
) under NAN's issuer profile.
In connection with the RTO, NAN is anticipated to issue approximately 82,157,579 common shares of
the Resulting Issuer (on a post-Consolidation basis) in exchange for 77,948,368 outstanding shares of
PNR immediately prior to the effective time of the RTO (after giving effect to the Exchange Ratio). The
Resulting Issuer is expected to be owned approximately (i) 72.6% by current shareholders of PNR, (ii)
23.7% by the current shareholders of NAN, and (iii) 3.7% by the holders of the subscription receipts of
NAN, after giving effect to the RTO.
Completion of the RTO is subject to a number of conditions, including, but not limited to, Exchange
acceptance and disinterested shareholder approval of NAN shareholders of the RTO. The RTO cannot
close until the required shareholder approval is obtained. There can be no assurance that the RTO will
be completed as proposed or at all. The completion of the RTO is also subject to other conditions,
including among other things, ownership by PNR of the rights and title to the Selebi Project, shareholder
approval by PNR shareholders of the Amalgamation, the support agreements (as described under
"Shareholder Approvals" below) having not been terminated or materially breached and certain
customary conditions precedent for a transaction of this nature.
Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection
with the RTO, any information released or received with respect to the RTO may not be accurate or
complete and should not be relied upon. Trading in the securities of NAN should be considered highly
speculative.
The Exchange has in no way passed upon the merits of the proposed RTO and has neither approved nor
disapproved the contents of this news release.
The full particulars of the RTO, the Selebi Project (as defined herein) located in Botswana, which will be
the only material property of the Resulting Issuer, and the business of the Resulting Issuer will be
described in the Form 3D2 (
Information Required in a Filing Statement for a Reverse Takeover or
Change of Business
) (the "
Filing Statement
") prepared in accordance with the policies of the
Exchange. A copy of the Filing Statement will be available electronically on SEDAR (
www.sedar.com
)
under NAN's issuer profile in due course.
Shareholder Approvals
On June 23, 2022, NAN received shareholder approval in respect of, among other things, the Board
Reconstitution, the Continuance and the Name Change. Full particulars of the matters considered at the
NAN Meeting and the results of the NAN Meeting are described in the management information circular
of NAN dated May 16, 2022 (the "
Circular
") and the news release of NAN dated June 23, 2022,
respectively, both of which are available electronically on SEDAR (
www.sedar.com
) under NAN's issuer
profile.
In addition, NAN will be seeking approval of the RTO by way of a written consent of at least a majority of
its disinterested shareholders pursuant to the policies of the Exchange (the "
RTO Approval
"). NAN
shares held by Charles Riopel, Keith Morrison and Sarah Zhu, all of whom are directors and/or officers
of both NAN and PNR (the "
Interlocked Insiders
") will be excluded from the RTO Approval. All of the
directors and officers and certain shareholders of NAN, including Sentient Global Resources Fund IV,
L.P. and Contemporary Amperex Technology Canada Limited, representing approximately 52% of the
outstanding common shares of NAN have entered into voting support agreements with PNR in support of
the RTO (excluding the Interlocked Insiders).
In connection with the RTO, PNR also held an annual and special meeting of its shareholders on June
23, 2022 and received approval of its shareholders for, among other things, the Amalgamation.
Management and Board Composition
The board of directors of the Resulting Issuer is expected to include Keith Morrison, Charles Riopel,
Sheldon Inwentash, John Hick, Sean Whiteford, John Chisholm and William O'Reilly. Management of the
Resulting Issuer is expected to include Keith Morrison (Chief Executive Officer), Mark Fedikow
(President), Sarah Wenjia Zhu (Chief Financial Officer and Corporate Secretary). In addition, the
technical team of the Resulting Issuer will include Ms. Sharon Taylor (Chief Geophysicist) and Dr. Peter
Lightfoot (Consulting Chief Geologist).
The biography for William O'Reilly is provided below. The biographies of the rest of the proposed
members of the board of directors and management of the Resulting Issuer can be found in the Circular
and the joint news release of NAN and PNR dated April 26, 2022, both of which are available
electronically on SEDAR (
www.sedar.com
) under NAN's issuer profile.
William O'Reilly, Director
Mr. O'Reilly is a Corporate Director. He was Managing Partner and a member of the Management
Committee of Davies Ward Phillips & Vineberg LLP ("
Davies
"), a leading Canadian law firm, from 1997
until his retirement from those positions on May 31, 2010.
He was a partner of Davies from 1976 to
December 31, 2011, except for the period between August 1993 and January 1996 when he served as
an executive officer of Russel Metals Inc., one of North America's leading metals distribution companies.
Mr. O'Reilly has served as a director of Russel Metals Inc. since May 2009, and has at various times
served as Chair of its Nominating and Corporate Governance Committee, its Management Resources
and Compensation Committee and its Environmental Management and Health and Safety Committee.
During his time practicing law, Mr. O'Reilly advised individuals and public and privately owned
corporations in connection with the purchase and sale of corporations and business operations in a wide
variety of industries, including, in particular, the financial services sector, industrial manufacturing and
distribution, retail sales, truck transportation, food processing and oil and gas exploration and
development. He acted on behalf of corporate borrowers in secured and unsecured loan transactions,
including project financings, and in loan restructurings. He advised underwriters and issuers with respect
to the public and private distribution of equity and debt securities and the public distribution of mortgage-
backed securities, and he acted as an advisor to senior management, boards of directors, independent
committees of boards and major shareholders of both public and private corporations in connection with
a wide range of corporate activities.
In his capacity as Managing Partner at Davies, Mr. O'Reilly had primary responsibility for a wide range of
firm management matters, including firm strategy, delivery of legal services, client relationships, other
business development initiatives, lawyer recruitment, regulatory compliance, financial reporting,
professional education and partner compensation.
Select Financial Information
The following table sets out certain preliminary
pro forma
financial information for the Resulting Issuer
assuming completion of the RTO. The following information should be read in conjunction with, and is
qualified in its entirety by, the
pro forma
financial statements of the Resulting Issuer to be included in
Filing Statement, which will be available in due course on SEDAR (
www.sedar.com
) under NAN's issuer
profile.
Select Financial Information
NAN
(as at March 31,
2022)
('$000)
PNR
(as at March 31,
2022)
('$000)
Pro Forma
Adjustments
(
1)
(
2
)
('$000)
Resulting Issuer
Pro
Forma
Consolidation
('$000)
Current Assets
2,595
6,300
14,566
23,461
Total Assets
41,970
21,187
67,722
130,879
Current Liabilities
777
5,824
(1)
(3,055
)
3,546
Total Liabilities
777
34,662
(31,742
)
3,697
Shareholders' Equity
41,193
(13,476
)
99,465
127,182
Net Loss
390
23,649
(19,847
)
4,192
Select Financial Information
NAN
(as at March 31,
2022)
('$000)
PNR
(as at March 31,
2022)
('$000)
Pro Forma
Adjustments
(
1)
(
2
)
('$000)
Resulting Issuer
Pro
Forma
Consolidation
('$000)
Note:
(1)
Includes US$1.35 million of success fees payable to CIBC World Markets Inc. in connection with the Selebi acquisition, of which US$1 million was
paid in May 2022, with the balance of US$350,000 to be due upon the next financing by the Resulting Issuer.
(2)
The
pro forma
adjustments include, among other things, the adjustments for the subscription receipt financing of NAN which was completed on
April 28, 2022, an advisory fee of $420,000, which will be payable to INFOR Financial Inc. upon the closing of the RTO and certain non-recurring due
diligence and transaction costs in respect of the Selebi and Selkirk acquisitions and the RTO.
The Selebi Project
Following the completion of the RTO, it is anticipated that the Selebi and Selebi North nickel-copper-
cobalt (Ni-Cu-Co) mines and related infrastructure (the "
Selebi Project
") will be the only material
property of the Resulting Issuer, for purposes of National Instrument 43-101 -
Standards of Disclosure
for Mineral Projects
("
NI 43-101
"), following the completion of the RTO.
The Selebi Project is located in Botswana and consists of a single mining licence no. 2022/1L (the
"
Selebi Mining Licence
") covering an area of 11,504 hectares located near the town of Selebi Phikwe,
approximately 150 kilometres southeast of the city of Francistown, and 410 kilometres northeast of the
national capital Gaborone. The Selebi Mining Licence is centred approximately at 22°03'00" S and
27°47'00" E (see Figure 1) and provides Premium Nickel Resources Proprietary Limited ("
PNR
Selebi
"), an indirect wholly-owned subsidiary of PNR, the right to carry out care and maintenance and to
conduct exploration work from both surface and underground. The deposits in the Selebi Project area
are categorized as ortho-magmatic nickel-copper sulphide-type deposits.
Figure 1 - Location of the Selebi Project
To view an enhanced version of Figure 1, please visit:
https://images.newsfilecorp.com/files/2081/131618_be8a941af44d9940_003full.jpg
PNR completed the acquisition of Selebi on January 31, 2022. At the closing of the Selebi acquisition,
PNR Selebi effected a payment in the aggregate of (i) US$5,178,747, representing amounts mutually
agreed to between the parties in respect of PNR's care and maintenance contributions relating to the
Selebi Project, and (ii) US$1.75 million in respect of the upfront purchase price in respect of the Selebi
Project. In addition, PNR Selebi agreed to certain post-closing contingent milestone payments equal to
US$55 million, with US$25 million due upon the approval for renewal of a Section 43 mining licence in
respect of the Selebi Project on or before January 31, 2026 (the "
Selebi Mining License Renewal
Date
") and US$30 million due on the earlier of: (i) commissioning and start of production at the Selebi
Project; or (ii) or such date that is four years following the Selebi Mining Licence Renewal Date.
The Selebi Project does not have any known or identified mineral resources or mineral reserves at this
time and neither PNR nor NAN has undertaken any current mineral resource estimate on the Selebi
Project. While the Selebi Project has historical mineral resource estimates, these are historical in nature
and not compliant with NI 43-101. Neither PNR nor NAN have undertaken work to verify these historical
estimates and such historical resource estimates should not be relied upon. The anticipated work
program on the Selebi Project for the next 18 months includes, among other things, ongoing diamond
drilling and establishing a mineral resource on the Selebi Project. In addition, the underground
infrastructure at the Selebi North mines are expected to be upgraded in support of the underground
drilling program and to improve the health and safety at the mine.
In connection with the RTO, NAN will be obtaining a comprehensive valuation report in respect of the
Selebi Project which complies with the Exchange Appendix 3G -
Valuation Standards and Guidelines
for Mineral Properties
and the 2019 CIMVAL Code for the Valuation of Mineral Properties.
In accordance with NI 43-101, a technical report for the Selebi Project will be filed on SEDAR
(
www.sedar.com
) under NAN's issuer profile in due course and a summary of the Selebi Project and
work program will be included in the Filing Statement.
Update in respect of the Selkirk Acquisition
Further to the news release of PNR dated February 14, 2022, PNR, through its wholly-owned subsidiary,
is in the ongoing process of acquiring the Selkirk mines located in Botswana from BCL Limited and
Trevor Glaum N.O, in his capacity as liquidator of BCL Limited (the "
Selkirk Acquisition
"). Due to
additional time required to finalize the surface rights lease assignment and certain COVID-19 related
delays,
the closing period for the Selkirk Acquisition has been extended and it is anticipated that the
Selkirk Acquisition will be completed on or before August 15, 2022.
Qualified Person
The scientific and technical content of this news release has been reviewed and approved by Sharon
Taylor, who is a "qualified person" for the purposes of NI 43-101.
About North American Nickel Inc.
North American Nickel is a mineral exploration company with 100% owned properties in Maniitsoq,
Greenland and Ontario, Canada. In 2019, NAN became a founding shareholder in PNR to provide direct
exposure to Ni-Cu-Co opportunities in the southern African region. Simultaneously, NAN is expanding its
area of exploration interest into Morocco.
The Maniitsoq property in Greenland is a Camp scale permitted exploration project comprising 3,048
square km covering numerous high-grade nickel-copper + cobalt sulphide occurrences associated with
norite and other mafic-ultramafic intrusions of the Greenland Norite Belt (GNB). The >75km-long belt is
situated along, and near, the southwest coast of Greenland and is accessible from the existing Seqi
deep water port with an all-year-round shipping season and hydroelectric power potential from a
quantified watershed.
The Post Creek/Halcyon property in Sudbury is strategically located adjacent to the past producing
Podolsky copper-nickel-precious metal sulphide deposit of KGHM International Ltd. The property lies
along the extension of the Whistle Offset dyke structure. Such geological structures host major Ni-Cu-
PGM deposits and producing mines within the Sudbury Camp.
NAN acquired 100% ownership of property near the southern extent of the Lingman Lake Greenstone
Belt in northwest Ontario known as Lingman Nickel and in the Quetico region near Thunder Bay Ontario.
The acquisition of these properties is part of NAN's strategy to develop a pipeline of new nickel projects.
NAN is evaluating direct and indirect nickel asset acquisition opportunities globally.
About Premium Nickel Resources Corporation
PNR is a Canadian company dedicated to the exploration and development of high-quality Ni-Cu-Co
resources. PNR believes that the medium to long-term demand for these metals will grow through
continued global urbanization and the increasing replacement of internal combustion engines with
electric motors. Importantly, these metals are key to a low-carbon future.
PNR maintains a skilled team with strong financial, technical and operational expertise to take an asset
from discovery to exploration to mining.
PNR has focused its efforts on discovering world class nickel sulphide assets in jurisdictions with rule-of-
law that fit a strict criteria that comply with PNR's values and principles which stand up against the
highest acceptable industry standards. PNR is committed to governance through transparent
accountability and open communication within our team and our stakeholders.
PNR closed its acquisition of the Selebi Project on January 31, 2022. The Selebi Project include two
shafts and related infrastructure (rail, power and water). Shaft sinking and plant construction started in
1970. Mining concluded in October 2016 when the operations were placed on care and maintenance
due to a failure in the separate Phikwe processing facility. The Selebi Project were subsequently placed
under liquidation in 2017.
The proposed work plan for the Selebi Project includes diamond drilling which is expected to be ongoing
for up to 18 months. During that time, additional metallurgical samples will be collected and sent for more
detailed studies. The underground infrastructure at Selebi North will be upgraded to support the
underground drilling program as well as improve health & safety at Selebi North.
ON BEHALF OF THE BOARD OF DIRECTORS OF NAN
Douglas Ford
Interim Lead Director and Chair of the NAN Special Committee
North American Nickel Inc.
For more information contact:
North American Nickel Inc.
Jaclyn Ruptash
Vice President Corporate Affairs
+1 (604) 770-4334
ON BEHALF OF THE BOARD OF DIRECTORS OF PNR
Sheldon Inwentash
Director and Chair of the PNR Special Committee
Premium Nickel Resources Corporation
For more information contact:
Premium Nickel Resources Corporation
130 Spadina Avenue, Suite 401
Toronto, Ontario, Canada M5V 2L4
Forward-looking Statements
Certain statements contained in this news release may be deemed "forward-looking statements"
within the meaning of applicable Canadian securities laws. These forward-looking statements, by their
nature, require NAN and PNR to make certain assumptions and necessarily involve known and
unknown risks and uncertainties that could cause actual results to differ materially from those
expressed or implied in these forward-looking statements. Forward-looking statements are not
guarantees of performance. Words such as "may", "will", "would", "could", "expect", "believe", "plan",
"anticipate", "intend", "estimate", "continue", or the negative or comparable terminology, as well as
terms usually used in the future and the conditional, are intended to identify forward-looking
statements. Information contained in forward-looking statements, including with respect to the ability to
satisfy or waive on satisfactory terms any conditions to the completion of the RTO (including but not
limited to any required regulatory and shareholder approval), timeline to complete the RTO (if at all),
the anticipated benefits of the RTO, the anticipated use of the available funds and working capital of
the Resulting Issuer, the ability to satisfy or waive on satisfactory terms any conditions to the
completion of the Selkirk Acquisition, timeline to complete the Selkirk Acquisition (if at all), and the
anticipated work program on the Selebi Project, are based upon certain material assumptions that
were applied in drawing a conclusion or making a forecast or projection, including management's
perceptions of historical trends, current conditions and expected future developments, current
information available to the management of NAN and PNR, public disclosure from operators of the
relevant mines, as well as other considerations that are believed to be appropriate in the
circumstances. NAN and PNR consider their respective assumptions to be reasonable based on
information currently available, but cautions the reader that their assumptions regarding future events,
many of which are beyond the control of NAN and PNR, may ultimately prove to be incorrect since
they are subject to risks and uncertainties that affect NAN and PNR, and their respective businesses.
For additional information with respect to these and other factors and assumptions underlying the
forward-looking statements made in this news release concerning NAN, see the section entitled
"Risks and Uncertainties" in the most recent management discussion and analysis of NAN which is
filed with the Canadian securities commissions and available electronically under NAN's issuer
profile on SEDAR (
www.sedar.com
) and the risk factors outlined in the Filing Statement which will be
available electronically under NAN's issuer profile on SEDAR (
www.sedar.com
) in due course. The
forward- looking statements set forth herein concerning NAN and PNR reflect management's
expectations as at the date of this news release and are subject to change after such date. NAN and
PNR disclaim any intention or obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, other than as required by law.
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 news
release. No stock exchange, securities commission or other regulatory authority has approved
or disapproved the information contained herein.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/131618