Premium Nickel Resources Ltd. Announces Proposed $20 Million Equity and Debt Financing Package $14.1 Million Brokered Private Placement of Common Shares Increase in Existing Term Loan with Cymbria Corporation by $5.9 Million to $20.9 Million
Premium Nickel Resources Ltd. Announces
Proposed $20 Million Equity and Debt
Financing Package
$14.1 Million Brokered Private Placement of Common Shares
Increase in Existing Term Loan with Cymbria Corporation by $5.9 Million to $20.9 Million
Toronto, Ontario--(Newsfile Corp. - December 3, 2023) -
Premium Nickel Resources Ltd. (TSXV:
PNRL) (OTCQX: PNRLF)
(the "
Company
") is pleased to announce a proposed equity and debt
financing package of $20 million, comprising:
Brokered Private Placement
:
a "best efforts" private placement offering of 11,765,000 common
shares of the Company (the "
Common Shares
") at a price of $1.20 per Common Share for
aggregate gross proceeds of approximately $14.1 million (the "
Offering
").
Amended Term Loan
:
a second amended and restated commitment letter between the
Company and Cymbria Corporation to,
inter alia,
amend the terms of their existing term loan to
increase the principal amount of the loan from $15,000,000 to $20,882,353 (the "
Amended Term
Loan
"), which, upon closing of the Amended Term Loan, would result in additional gross proceeds
to the Company of $5,000,000.
Brokered Private Placement
The Company entered into an engagement letter with Cormark Securities Inc., on behalf of BMO Capital
Markets, as co-lead agent, and a syndicate of agents to be formed (collectively, the "
Agents
") in respect
of the Offering. Under the Offering, the Company will issue 11,765,000 Common Shares at a price of
$1.20 per Common Share for aggregate gross proceeds of approximately $14.1 million.
It is anticipated that EdgePoint Investment Group Inc., or an entity (or entities) managed by EdgePoint
("
EdgePoint
"), will exercise its participation right in respect of the Offering (the "
Participation Right
")
and subscribe for Common Shares in accordance with its existing ownership interest in the Company.
EdgePoint was granted the Participation Right pursuant to the terms of a subscription agreement
between the Company and EdgePoint dated June 28, 2023.
Subject to compliance with applicable regulatory requirements and in accordance with National
Instrument 45-106 -
Prospectus Exemptions
("
NI 45-106
"), the Common Shares will be offered for sale
on a private placement basis: (i) in each of the provinces and territories of Canada, other than Québec,
in reliance on the "listed issuer financing exemption" from the prospectus requirements (the "
LIFE
Exemption
") available under Part 5A of NI 45-106 for aggregate gross proceeds of up to approximately
$10,000,000 (or up to approximately 8,333,333 Common Shares); and (ii) (A) in each of the provinces
and territories of Canada pursuant to available exemptions from the prospectus requirements under NI
45-106 (other than the LIFE Exemption), (B) in the United States pursuant to available exemptions from
the registration requirements of the
United States Securities Act of 1933
, as amended (the "
U.S.
Securities Act
"), and applicable U.S. state securities laws, and (C) in such other jurisdictions provided
it is understood that no prospectus filing or comparable obligation, ongoing reporting requirements or
requisite regulatory or governmental approval arises in such other jurisdictions. The Common Shares
issued pursuant to the LIFE Exemption to Canadian resident subscribers under the Offering will not be
subject to a hold period pursuant to applicable Canadian securities laws. The Common Shares issued
to Canadian resident subscribers pursuant to prospectus exemptions under NI 45-106 other than the
LIFE Exemption will be subject to a hold period expiring four months and one day after the closing of the
Offering.
The offer and sale of Common Shares in reliance on the LIFE Exemption will be conditional on
the
Company completing the Offering and Amended Term Loan for such amount that will provide the
Company with sufficient available funds to meet its business objectives and liquidity requirements for a
period of 12 months following closing of the Offering.
There is an offering document related to the Offering that can be accessed on SEDAR+
(
www.sedarplus.ca
) under the Company's profile and on the Company's website at
www.premiumnickelresources.ca
. Prospective investors should read the offering document before
making an investment decision.
The Offering is expected to close on or about December 14, 2023, or such other date as the Company
and the Agents may agree and remains subject to the receipt of all necessary approvals, including the
approval of the TSX Venture 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, including any of the securities in the United States of America. 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 state securities laws and may not be offered or sold within the United States or to, or for
account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered
under the 1933 Act and applicable state securities laws, or an exemption from such registration
requirements is available.
Amended Term Loan
The Company and Cymbria Corporation (the "
Lender
") have entered into a second amended and
restated commitment letter (the "
Second A&R Commitment Letter
") to amend the terms of their
existing term loan (the "
Term Loan
") to,
inter alia
, increase the principal amount of the loan by
$5,882,353 (the "
Additional Principal Amount
") from $15,000,000 to $20,882,353. The Additional
Principal Amount will be subject to an original issue discount of approximately 15% and will be made
available by the Lender to the Company as a single advance in an amount equal to $5,000,000 on
closing of the Amended Term Loan.
The Additional Principal Amount will form part of the Term Loan and, except as otherwise set out in the
Second A&R Commitment Letter, will be on the same terms and conditions applicable to the Term Loan.
For certainty, the Additional Principal Amount will bear 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 Term Loan Amendment, on closing of the Amended Term Loan, the Company will issue 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 Share until June 28, 2026. The closing of the Amended Term Loan, including the
issuance of the Additional Warrants, is expected to occur concurrently with closing of the Offering on or
about December 14, 2023, or such other date as the Company and the Lender may agree, and remains
subject to: (i) completion of the Offering; and (ii) the satisfaction of certain customary closing conditions,
including the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.
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 affiliated 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 purposes of Multilateral Instrument 61-101 -
Protection
of Minority Security Holders in Special Transactions
("
MI 61-101
"). In addition, the Offering (including
EdgePoint's participation in the Offering by exercising its Participation Right) may be considered a
"connected transaction" to the Amended Term Loan for purposes of MI 61-101.
The Company may, however, complete 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 (or is expected to involve) "interested parties",
exceeds 25% of the Company's market capitalization.
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 may 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 news
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 timing and ability of
the Company to close the Offering and the Amended Term Loan; the Company's ability to obtain all
regulatory approvals, including the approval of the TSX Venture 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 regulatory
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 conditions and
expected future developments; current information available to the management of the Company; mining
activities and 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 assurance that
forward-looking statements 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 subject to risks
and uncertainties that affect the Company and its businesses.
For additional information with respect to these and risks and other factors that may affect the
assumptions and forward-looking statements made in this news release concerning 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, whether 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) 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.
/ Not for distribution to United States newswire services or for dissemination in the United
States /
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