Nickel 28 Reiterates Warning to Shareholders Against Pelham’S Highly Abusive, Coercive and Conditional “Mini- Tender” Scheme and Urges Shareholders to Reject IT
NEWS RELEASE TSX VENTURE: NKL
FSE: 3JC0
NICKEL 28 REITERATES WARNING TO SHAREHOLDERS AGAINST
PELHAM’S HIGHLY ABUSIVE, COERCIVE AND CONDITIONAL “MINI-
TENDER” SCHEME AND URGES SHAREHOLDERS TO REJECT IT
• Board and Special Committee unanimously recommend shareholders not fall for
Pelham’s deceptive tricks and refrain from tendering shares of Nickel 28 to highly
conditional and significantly undervalued “mini-tender” offer
• Pelham’s “mini-tender” is a predatory vote -buying scheme designed to take
advantage of retail shareholders and gain significant control of Nickel 28 ahead of
material near-term catalysts in order to further a small , opportunistic New York -
based hedge fund’s self-interested agenda
• Significant near -term catalysts for Nickel 28’s portfolio which will drive value
creation for shareholders include materially enhanced free cash flow , meaningful
capital returns following debt repayment and advancement of assets underlying key
royalties
• Shareholders again warned to TAKE NO ACTION and NOT to tender to this
abusive and coercive scheme to buy shares below their intrinsic value
TORONTO, ONTARIO, March 29, 2023 — Nickel 28 Capital Corp. (“Nickel 28 ” or the
“Company”) (TSXV: NKL) (FSE: 3JC0 ) today announced that its board of directors (the
“Board”) and a newly formed special committee of the independent directors of the Board (the
“Special Committee”), supported by their financial and legal advisors, unanimously
recommended that Nickel 28 shareholders REJECT the unsolicited “mini-tender” offer (the
“Scheme”) announced on March 21, 2023 by Pelham Investment Partners LP (“Pelham”) and
NOT TENDER their shares.
The Board and the Special Committee categorically reject Pelham’s Scheme as highly
abusive, coercive, misleading, conditional, and prejudicial to the interests of shareholders,
and urge shareholders to take no action and not to tender their shares and give away the
future value of their investment to a self-interested, predatory New York-based hedge fund.
Pelham’s Scheme is designed to buy your shares for less than th eir intrinsic value in
contemplation of a value destructive proxy-contest
Having taken advice from its legal and financial advisors, the Board and Special Committee
unanimously REJECT the Scheme as representing a self-serving, opportunistic and coercive
attempt by Pelham to extract value and gain significant influence over the Company solely for its
own benefit, at the expense of, and to the detriment to, shareholders of Nickel 28, this time through
a “mini-tender” offer that significantly undervalues Nickel 28’s shares.
Management and the Board remain strongly of the view that the intrinsic value of the Company’s
shares are far in excess of the so-called “premium” valuation payable under the Scheme, including
for the following key reasons:
• Long-term nickel fundamentals are supported by EV market growth of over 200% in the
last two years and forecasted growth of another 300-400% by the end of the decade;
• At US$12.50/lb nickel, Nickel 28 estimates that the net present value of its interest in the
Ramu Nickel joint venture project alone would be valued at almost $4.00 per share;
• At US$12.50/lb nickel, Nickel 28 also estimates that the net present value of its royalty
portfolio would be valued at almost $2.00 per share, with the potential to be significantly
higher once those assets are in production; and
• Following debt repayment, Nickel 28’s stated strategy to return the significant majority of
all net cash flo w in the form of regular dividends or distributions represents significant
additional future value for shareholders.
Nickel 28’s assessment of the financial value of its interest in the Ramu Nickel joint venture project
underscores that the anticipated increase in electric vehicle (EV) adoption and industrial demand
for nickel and cobalt will serve only to accelerate the strategic value of the Company.
Nickel 28 also manages a portfolio of 13 nickel and cobalt royalties on development and
exploration projects in Canada, Australia and Papua New Guinea (including a 1.75% NSR on the
Dumont project in Quebec and a 2.0% NSR on the Turnagain project in British Columbia), which
together with Ramu provides investors with exposure to both producing and development nickel
and cobalt projects and significant leverage to anticipated higher nickel and cobalt prices as the
world continues its transition towards a low carbon future.
Nickel 28’s portfolio has significant near-term catalysts which will drive further value creation for
shareholders. These catalysts include (i) materially enhanced free cash flow and meaningful capital
returns following Ramu Nickel project joint venture partner debt repayment, (ii) further
advancement of the assets underlying Nickel 28’s two key royalties and (iii) the establishment of
partnerships at these assets with leading companies (such as Mitsubishi), underscoring the quality
of the assets in the Nickel 28 portfolio.
Pelham itself agrees with Nickel 28 that the shares are undervalued and about to experience near-
term positive catalysts. In Pelham’s own March 21, 2023 news release announcing the Scheme,
Pelham admitted that it believes that the Company “is at the threshold of significant cash flow” .
If t his is true, why would Nickel 28 shareholders sell their shares to Pelham now for a
nominal premium at less than their intrinsic value and ahead of these significant catalysts?
By its very own admission, Pelham’s Scheme is designed to strip retail shareholders of the true
value of their investment ahead of a significant inflection point for Nickel 28 that Pelham
acknowledges is coming soon, making it clear that the explicit intent of the Scheme is to deprive
minority shareholders of Nickel 28’s upside potential before it is reflected in the share price.
Do not be fooled or coerced into giving up your shares for a low-ball offer. Management and
the Board, who collectively hold approximately 26.5 % of the Company’s issued and outstanding
shares (calculated on a fully-diluted basis) are fundamentally opposed to this opportunistic and
coercive proposal and remain fully aligned with the interests of minority shareholders. This
alignment is further exemplified by insiders acquiring a significant number of shares in the market
in the last month.
Beware of Pelham’s questionable motives and misleading statements
Pelham, led by its founder and principal Edward “Ned” Arnold Collery, age 32, submitted an
unsolicited proposal to the Board on February 6, 2023 proposing to insert itself as a strategic
shareholder through a preferential, highly dilutive private placement at the expense of other
shareholders and insisted that the Board grant it investor rights not afforded to any of Nickel 28’s
other significant shareholders. In order to ensure shareholders were fully informed, the Company
publicly disclosed the proposal on February 8, 2023 and received overwhelming support from
shareholders for rejecting this self-serving offer. Pelham has now decided it wants to buy out
minority shareholders at a significant discount to the intrinsic value of their shares without any
real commitment to actually buy the shares because its previous self-serving proposal was soundly
rejected.
This “mini-tender” offer represents yet another coercive and opportunistic tactic by Pelham
that illustrates that its only real priority is gaining control over your investment in Nickel 28.
While Pelham has publicly positioned itself as having made a so-called “attempt at constructive
engagement with management of the Company,” it conveniently omitted to state that Pelham’s
proposal to the Board contained a 48-hour ultimatum for Nickel 28 to engage with Pelham on its
terms. Pelham’s demand that the Board agree to a dilutive private placement and appoint two
unidentified directors to the Board was an offer no responsible board acting in good faith and in
the best interests of shareholders would agree to. Yet Pelham holds itself out to be the shareholder
voice of good governance. Pelham’s continuous “flip-flopping” underscores the performative,
unprincipled and opportunistic nature of the proposals delivered to Nickel 28, and belies Pelham’s
real motivations.
Pelham’s actual conduct calls into question its public platitudes about good corporate governance
and independent oversight, and underscores that Pelham is merely setting the stage for a n
unnecessary, distracting and costly proxy fight on a flimsy platform of governance concerns which
are a smokescreen for its own self-serving motivations.
The “mini-tender” is highly conditional , prejudicial and coercive to shareholders and
does not provide shareholders with certain of the protections that applicable securities
laws require be provided to shareholders in a formal take-over bid
The Board warns that Pelham has made no firm commitment to acquire and pay for any of the
shares deposited under its Scheme. Pelham’s Scheme is highly conditional and can be withdrawn,
modified or extended for any reason and at any time given the extremely broad and discretionary
conditions attached to Pelham’s Scheme.
Pelham’s Scheme is highly prejudicial to shareholders’ interests and is coercive. It is designed to
create uncertainty to entice shareholders to act quickly and contrary to their own interests.
As a result of their lack of procedural protections for tendering shareholders, “mini-tender” offers
are a manipulative tool often employed by market participants seeking to take advantage of
minority shareholders to facilitate attempts to gain control through alternative means, and have a
deservedly poor reputation in the market.
“Mini-Tender” Offer Recommendation
The Board unanimously recommends that Nickel 28 shareholders take NO ACTION in
response to the unsolicited “mini-tender” offer made by Pelham and DISREGARD any
materials or communications received from Pelham or its agent, Laurel Hill Advisory
Group.
The Board and Management of Nickel 28, informed by their legal and professional advisors, are
continuing to evaluate and will take any and all steps necessary to advocate for and defend
shareholder value and to protect minority shareholders against this and any other opportunistic or
coercive actions by Pelham that would harm shareholder interests.
Information and assistance withdrawing shares
Nickel 28 shareholders who have any questions, or who have already tendered their shares and
require assistance in withdrawing them, are encouraged to contact Kingsdale Advisors toll-free on
+1-888-518-1557 or by email at [email protected] for additional information and
assistance.
Advisors
Kingsdale Advisors is acting as strategic shareholder advisor to Nickel 28. Stikeman Elliott LLP
and Bennett Jones LLP are acting as legal counsel to Nickel 28. BMO Capital Markets is acting
as financial advisor to Nickel 28.
About Nickel 28
Nickel 28 Capital Corp. is a nickel-cobalt producer through its 8.56% joint-venture interest in the
producing, long-life and world-class Ramu Nickel-Cobalt Operation located in Papua New
Guinea. Ramu provides Nickel 28 with significant attributable nickel and cobalt production
thereby offering our shareholders direct exposure to two metals which are critical to the adoption
of electric vehicles. In addition, Nickel 28 manages a portfolio of 13 nickel and cobalt royalties
on development and exploration projects in Canada, Australia and Papua New Guinea.
Cautionary Note Regarding Forward-Looking Statements
This news release contains certain information which constitutes ‘forward-looking statements’ and
‘forward-looking information’ within the meaning of applicable Canadian securities laws. Any
statements that are contained in this news release that are not statements of historical fact may be
deemed to be forward-looking statements. Forward-looking statements are often identified by
terms such as “may”, “should”, “anticipate”, “expect”, “potential”, “believe”, “intend” or the
negative of these terms and similar expressions. Forward-looking statements in this news release
include, but are not limited to: statements and figures with respect to the future value of the Ramu
project and the Company’s royalty portfolio; statements related to the repayment of the Company’s
Ramu operating debt (including the timing thereof) and the timing of repayments and payments
under the Ramu Nickel project joint venture agreement by the operator; statements related to the
Company’s future use of excess cash flow from the Ramu Nickel project (and the receipt and
timing thereof); statements with respect to the business and assets of the Company and its strategy
going forward; and statements with respect to nickel and cobalt prices, including long-term nickel
fundamentals and underlying growth drivers. Readers are cautioned not to place undue reliance on
forward-looking statements. Forward-looking statements involve known and unknown risks and
uncertainties, most of which are beyond the Company’s control. Should one or more of the risks
or uncertainties underlying these forward-looking statements materialize, or should assumptions
underlying the forward-looking statements prove incorrect, actual results, performance or
achievements could vary materially from those expressed or implied by the forward-looking
statements.
The forward-looking statements contained herein are made as of the date of this release and, other
than as required by applicable securities laws, the Company does not assume any obligation to
update or revise them to reflect new events or circumstances. The forward-looking statements
contained in this release are expressly qualified by this cautionary statement.
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 release. No securities regulatory authority has either approved or
disapproved of the contents of this news release.
Investor Contact:
Justin Cochrane, President
Tel: + 1 289 314 4766
Email: [email protected]