Premium Nickel Resources Ltd. Announces Closing of Previously Announced Equity and Debt Financing Package of $21.6 Million
PREMIUM NICKEL RESOURCES LTD. ANNOUNCES CLOSING OF PREVIOUSLY
ANNOUNCED EQUITY AND DEBT FINANCING PACKAGE OF $21.6 MILLION
Not for distribution to United States newswire services or for dissemination in the United States
Toronto, Ontario – December 14, 2023 – Pr emium Nickel Resources Ltd. (TSXV: PNRL) (the
"Company") is pleased to announce the closing of it s previously-announced equity and debt financing
package of approximately $21.6 million, comprised of:
Brokered Private Placement: $15,760,040 pursuant to a "best efforts" private placement offering
of 13,133,367 common shares of the Company (the " Common Shares") at a price of $1.20 per
Common Share (the "Offering").
Amended Term Loan: $5,882,353 loan pursuant to an amendment to the terms of the Company's
existing term loan to increase the principal am ount of the loan from $15,000,000 to $20,882,353
(the "Amended Term Loan").
Brokered Private Placement
The Offering was completed in accordance with the terms of an agency agreement dated December 14,
2023 and entered into by the Company with Cormark Securities Inc. and BMO Capital Markets, as co-lead
agents, and Canaccord Genuity Corp., Fort Capital Securities Ltd. and Paradigm Capital Inc. (collectively,
the "Agents"). Under the Offering, the Company issued an aggregate 13,133,367 Common Shares at a
price of $1.20 per Common Share fo r aggregate gross proceeds of $15,760, 040. In consideration for the
services provided by the Agents under the Offering, the Company paid to the Agents an aggregate cash
commission of $796,983, representing 6% of the gross pr oceeds of the Offering (other than in respect of
subscribers included on a president's list formed by the Company, for which a reduced commission of 3%
of the gross proceeds was paid).
In connection with the Offering, EdgePoint Investme nt Group Inc., or an entity (or entities) managed by
EdgePoint ("EdgePoint"), exercised its participation right in respect of the Offering (the " Participation
Right") and subscribed for an aggregate 1,265,800 Co mmon Shares. EdgePoint was granted the
Participation Right pursuant to the terms of a subscription agreement between the Company and EdgePoint
dated June 28, 2023. As approximately $2,080,000 of the net proceeds of the Offering will be used to satisfy
interest payments under the Amended Term Loan, EdgePoint's participation under the Offering was
characterized by the TSX Venture Exchange (the "Exchange") as a shares-for-debt transaction subject to
Exchange Policy 4.3 – Shares for Debt.
Under the Offering, the Company distributed (i) an aggregate 6,419,368 Common Shares pursuant to the
"Listed Issuer Financing Exemption" available un der Part 5A of National Instrument 45-106 – Prospectus
Exemptions (the " LIFE Exemption "), and (ii) an aggregate 3,685,700 Common Shares in offshore
jurisdictions pursuant to OSC Rule 72-503 – Distributions Outside Canada ("OSC Rule 72-503 "). All
Common Shares issued pursuant to the LIFE Exemption or OSC Rule 72-503 are not subject to a Canadian
statutory hold period in accordance with applicable Canadian securities laws. Other than Common Shares
distributed pursuant to the LIFE Exemption or OSC Rule 72-503, the Common Shares issued under the
Offering are subject to a Canadian statutory hold period of four months and one day in accordance with
applicable Canadian securities laws, which expires on April 15, 2024. The Offering remains subject to the
final acceptance of the Exchange.
This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be
any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
The securities have not been and will not be registered under the United States Securities Act of 1933, as
amended (the "1933 Act"), or any U.S. state securities laws, and may not be offered or sold in the United
States (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable
U.S state securities laws, or an exemption from such registration requirements is available.
Amended Term Loan with Cymbria
In accordance with the terms of a second amended and restated commitment letter dated December 3,
2023 (the " Second A&R Commitment Letter "), the Company and Cymbria Corporation (the " Lender")
closed an amendment to the terms of their existing term loan (the " Term Loan") pursuant to which the
Company increased the principal amount of the Term Loan by $5,882,353 (the " Additional Principal
Amount") from $15,000,000 to $20,882,353. The Additional Principal Amount was subject to an original
issue discount of approximately 15% and was advanced by the Lender to the Company as a single advance
of $5,000,000.
The Additional Principal Amount forms a part of the Te rm Loan and, except as otherwise set out in the
Second A&R Commitment Letter, is on the same terms and conditions applicable to the Term Loan. For
certainty, the Additional Principal Amount bears interest at a rate of 10% per annum calculated and payable
quarterly in arrears and will mature and be payable on June 28, 2026, which, in each case, is consistent
with the terms and conditions applicable to the Term Loan. As consideration for entering into the Amended
Term Loan, the Company issued an additional 700,000 common share purchase warrants (collectively, the
"Additional Warrants") to the Lender, with each Additional Warrant entitling the Lender to acquire one
Common Share at a price of $1.4375 per Common Shar e until June 28, 2026. The Amended Term Loan
remains subject to the final acceptance of the E xchange. The Additional Warrants are subject to a hold
period of four months plus a day from the date hereof and the resale rules of applicable securities legislation
and policies of the Exchange.
In accordance with the terms of the Amended Term Loan, the Company is required to pay a delayed security
fee on a quarterly basis equal to 1.25% of the outstanding principal amount under the Amended Term Loan,
with the next payment due on January 1, 2024, in the event that certain security documents have not been
executed and delivered by the Company (the " Delayed Security Fee"). Upon the execution and delivery
of such security documents, the Delayed Security Fee will cease to apply.
The net proceeds of the Offering and the Amended Term Loan will be used by the Company to advance
the exploration and development of its mineral assets in Botswana and for general corporate and working
capital purposes.
MI 61-101 Disclosure
EdgePoint is (i) a "related party" of the Company by virtue of having beneficial ownership of, or control or
direction over, directly or indirectly, Common Shares carrying more than 10% of the voting rights attached
to all of the Company's voting securities, and (ii) an af filiated entity of Cymbria Corporation and, as such,
the Amended Term Loan, including the issuance of the Additional Warrants, is considered to be a "related
party transaction" of the Company for purp oses of Multilateral Instrument 61-101 – Protection of Minority
Security Holders in Special Transactions (" MI 61-101 "). In addition, certain insiders of the Company
(including EdgePoint) have subscribed for an aggregate 1,842,466 Common Shares under the Offering, for
aggregate gross proceeds of $2,210,959.20. Each subscription by an "insider" is considered to be a "related
party transaction" for purposes of MI 61-101.
The Company has completed the Offering and the Amended Term Loan (together, the "Transactions") in
reliance on exemptions available under MI 61-101 from the formal valuation and minority approval
requirements of MI 61-101. The Transactions are exempt from the formal valuation requirement in Section
5.4 of MI 61-101 in reliance on Section 5.5(b) of MI 61-101 as the Company is not listed on a specified
market under MI 61-101. Additionally, the Transactions are exempt from the minority approval requirement
in Section 5.6 of MI 61-101 in reliance on Section 5.7( 1)(a) of MI 61-101 insofar as neither the fair market
value of the subject matter, nor the fair market value of the consideration for, the Transactions, insofar as
it involves "interested parties", exceeds 25% of the Company's market capitalization. The Company did not
file a material change report more than 21 days before the expected closing date of the Transactions as
the details of the Transactions and the participation ther ein by each "related party" of the Company were
not settled until shortly prior to closing, and the Company wished to close the Transactions on an expedited
basis for sound business reasons.
ON BEHALF OF THE BOARD OF DIRECTORS
Keith Morrison
Chairman and Chief Executive Officer
Premium Nickel Resources Ltd.
For further information about Premium Nickel Resources Ltd., please contact:
Jaclyn Ruptash
Vice President, Communications and Government and Investor Relations
+1 (604) 770-4334
Cautionary Note Regarding Forward-Looking Information
Certain statements contained in this news release ma y be considered "forward -looking information" or
"forward-looking statements" within the meaning of applicable securities laws. All statements, other than
statements of historical fact, are forward-looking statements and based on expectations, estimates and
projections as at the date of this news release. These forward-looking statements, by their nature, require
the Company 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. In particular, this new s release contains forward-looking
statements pertaining to the terms of the Offering and the Amended Term Loan; the use of proceeds of the
Offering and the Amended Term Loan; the Company's abilit y to obtain all regulatory approvals, including
the final approval of the TSX Vent ure Exchange; and certain fees and commissions payable under the
Offering.
Information contained in forward-looking statements are based upon certain material assumptions that were
applied in drawing a conclusion or making a forecast or projection, including management's perception of
geology and mineralization; assumptions, limitations and qualifications in the Selkirk Technical Report and
Selebi; the timing and ability of the Company to receive necessary regula tory approvals; planned
exploration programs and expenditures; the Company's ability to establish a mineral resource estimate for
the Selebi Mine; the ability to the Company to expand mineral resources beyond current mineral resources
estimates; the utility of any historical data in respect of the Selkirk Mine and Selebi Mine; the results of any
testing; the ability of exploration activities (including drill results) to accurately predict mineralization; the
significance of metallurgical results; current c onditions and expected future developments; current
information available to the management of the Compan y; mining activities a nd the business of mineral
exploration; the general business and prospects of the Company; public disclosure from operators of the
relevant mines, as well as other considerations that are believed to be appropriate in the circumstances.
The Company considers its assumptions to be reasonable based on information currently available but
cautions the reader that there can be no assuranc e that forward-looking st atements will prove to be
accurate, as actual results and future events could differ materially from those anticipated in such
statements and the Company's assumptions, many of which are beyond the control of the Company, may
ultimately prove to be incorrect since they are subjec t to risks and uncertainties that affect the Company
and its businesses.
For additional information with respect to these risks and other factors that may affect the assumptions and
forward‐looking statements made in this news release conc erning the Company, please refer to (i) the
section entitled "Risks and Uncertainties" in the most recent management discussion and analysis of the
Company, and (ii) the risk factors outlined in the filing statement of the Company dated July 22, 2022, both
of which are available electronically on SEDAR+ ( www.sedarplus.ca) under the Company's issuer profile.
Investors are cautioned not to put undue reliance on forward-looking statements.
The forward-looking statements contained in this news release are made as of the date of such document
only and, accordingly, are subject to change after such date. The Company disclaims any intent or
obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of
assumptions or factors, w hether as a result of new information, future events or otherwise, except in
accordance with applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
the policies of the TSX Venture Exchange) accep ts 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.