Dear Shareholders: As you know, the shareholders of Power Nickel Inc. (" Power Nickel " or the " Company ") held their Annual General and Special Meeting on
Letter to the Shareholders of Power Nickel Inc.
TORONTO
,
Jan. 16, 2025
/CNW/ -
Dear Shareholders:
As you know, the shareholders of Power Nickel Inc. ("
Power Nickel
" or the "
Company
") held their Annual
General and Special Meeting on
November 22, 2024
(the "
AGSM
"). During the AGSM, the shareholders
approved a special resolution for a plan of arrangement whereby the Company will spin-out its
Golden
Ivan
property and certain Chilean exploration assets to Chilean Metals Inc. ("
Chilean Metals
" or
"
Spinco
"), a wholly owned subsidiary of the Company (collectively, the "
Arrangement
"). On
November
27, 2024
, the Company obtained a final order from the Supreme Court of
British Columbia
approving of
the Arrangement.
Further to the Company's press release dated
December 5, 2024
, the Company expects that the
Arrangement will become effective around
January 31, 2025
or shortly thereafter. The Company will issue
a further news release confirming the effective date of the Arrangement (the "
Effective Date
") and
relevant date for which Power Nickel shareholders of record will receive, for each Power Nickel common
share (a "
Power Nickel Share
") held: (a) one new common share of Power Nickel (a "
New Power Nickel
Share
"); and (b) 0.05 of one Spinco common share (each whole common share, a "
Spinco Share
").
Outstanding stock options to purchase Power Nickel Shares will also be adjusted pursuant to the
Arrangement, such that the holders of options will receive new options to purchase New Power Nickel
Shares and Spinco Shares, as described in more detail in the Company's information circular dated
October 21, 2024
(the "
Information Circular
"). As set out in the Information Circular, Power Nickel has
chosen to deal with its outstanding warrants for Power Nickel Shares outside of the Arrangement and
under contractual adjustment provisions in the warrant certificates.
The Company's transfer agent, Endeavor Trust Corporation, will act as depositary for the Arrangement
(the "
Depositary
"). Additional information regarding the terms of the Arrangement, including a summary of
the terms and conditions of the arrangement agreement, is set out in the Information Circular, which is filed
under Power Nickel's SEDAR+ profile at
www.sedarplus.ca
.
Management of the Company wishes to provide updated guidance to the Company's shareholders with
respect to the procedures to exchange their Power Nickel Shares for New Power Nickel Shares and
Spinco Shares in advance of the Arrangement becoming effective.
To assist in the understanding of why the Board has taken this step and to communicate in a less legalese
way, please watch the following video which helps explain our thinking and the process. We recommend
you watch this and act on our recommendations as soon as possible.
Click image to play video
Procedure to Exchange Power Nickel Shares
The procedure for a shareholder to exchange their Power Nickel Shares for New Power Nickel Shares and
Spinco Shares depends on how their Power Nickel Shares are issued and registered.
Shareholders that hold
any
Power Nickel Shares directly with the Company in their name (a "
Registered
Shareholder
") should refer to the section below entitled "
Registered Shareholders
" for information
concerning the procedure to exchange those Power Nickel Shares. Please note it is possible for a
Registered Shareholder to also qualify as a "
Non-Registered Shareholder
". A Non-Registered
Shareholder is a shareholder that owns Power Nickel Shares which are not registered in their legal name
and are instead registered in the name of a nominee or intermediary, such as: (a) a brokerage firm, bank,
trust company, brokerage firm, trustee or administrator of a self-administered RRSP, RRIF, RESP, TFSA,
FHSA or similar plan or a clearing agency (an "
Intermediary
"); or (b) in the name of a depositary, such as
CDS Clearing and Depository Services Inc. ("
CDS & Co.
") or the Depository Trust Company ("
DTC
"), of
which the Intermediary is a participant. If you qualify as a Non-Registered Shareholder, please refer to the
section below entitled "
Non-Registered Shareholders
" for information concerning the procedure to
exchange Power Nickel Shares held in the name of an Intermediary or other depositary of which the
Intermediary is a participant.
Registered Shareholders
The procedure to exchange Power Nickel Shares held by Registered Shareholders depends on whether
their Power Nickel Shares are issued in:
A certificated format, such as a share certificate evidencing Power Nickel Shares ("
Certificated
Shares
"), in which case the Registered Shareholder is referred to the below section entitled "
(1)
Certificated Shares
" for more information.
An uncertificated format, such as a Direct Registration System advice statement (a "
DRS Advice
")
evidencing Power Nickel Shares ("
Uncertificated Shares
"), in which case the Registered
Shareholder is referred to the below section entitled "
(2) Uncertificated Shares
" for more information.
In both certificated and uncertificated format (e.g., the Registered Shareholder has both share
certificate(s) and DRS Advice(s) evidencing Power Nickel Shares), in which case the Registered
Shareholder is referred to the below sections entitled "
(1) Certificated Shares
" and "
(2) Uncertificated
Shares
" for more information.
(1)
Certificated Shares
For a Registered Shareholder that holds Certificated Shares (below, a "
Certificated Shareholder
"),
Power Nickel, through the Depositary, will mail a letter of transmittal (the "
Letter of Transmittal
") in
respect of such Certificated Shares to each Certificated Shareholder, which will be used by the
Certificated Shareholder to exchange their Certificated Shares for a share certificate or DRS Advice
representing their New Power Nickel Shares and a DRS Advice representing their Spinco Shares.
As
soon as practicable following the Effective Date, such Certificated Shareholder must submit
his/her/its Power Nickel Shares which are Certificated Shares to
the Depositary
with a duly
completed Letter of Transmittal in order to receive their New Power Nickel Shares and Spinco
Shares in exchange for such Certificated Shares.
Thereafter, the Depositary will cause to be delivered
to such Certificated Shareholders, in accordance with the Letter of Transmittal, a share certificate or DRS
Advice representing the New Power Nickel Shares and a DRS Advice representing the aggregate Spinco
Shares to which such Certificated Shareholders are entitled to receive in exchange for their Certificated
Shares.
Until such Certificated Shares are exchanged by the Certificated Shareholder with the Depositary by using
the Letter of Transmittal in accordance with the terms and conditions thereof, each share certificate
representing Power Nickel Shares issued prior to the Effective Date will, after the Effective Date,
represent only the right of the Certificated Shareholder to receive, upon surrender to the Depositary of the
Certificated Shares in accordance with the Letter of Transmittal, a share certificate or DRS Advice
representing the New Power Nickel Shares and a DRS Advice representing the Spinco Shares to which
such Certificated Shareholder is entitled to receive in exchange for such Certificated Shares.
If any Certificated Shareholder fails to deliver to the Depositary their Certificated Shares and all
other required documents required to be delivered pursuant to the terms of the Letter of
Transmittal on or before the sixth (6th) anniversary of the Effective Date, then on the sixth (6th)
anniversary of the Effective Date: (a) such Certificated Shareholder will be deemed to have
donated and forfeited to Power Nickel or its successor any New Power Nickel Shares or Spinco
Shares held by the Depositary in trust for such Certificated Shareholders; and (b) any certificate
representing Power Nickel Shares held by the Certificated Shareholder will cease to represent a
claim of any nature whatsoever and will be deemed to have been surrendered to Power Nickel and
will be cancelled.
(2)
Uncertificated Shares
For a Registered Shareholder that holds Uncertificated Shares, the completion and submission of a Letter
of Transmittal to the Depositary is not required to exchange such Uncertificated Shares for New Power
Nickel Shares and Spinco Shares. A Registered Shareholder will receive New Power Nickel Shares and
Spinco Shares in exchange for such Uncertificated Shares by way of DRS Advices evidencing the New
Power Nickel Shares and Spinco Shares to which they are entitled in exchange for such Uncertificated
Shares. The distribution of such DRS Advices to the Registered Shareholders, in exchange for the
applicable Uncertificated Shares, will occur automatically on the Effective Date as the Depositary will have
custody of such New Power Nickel Shares and Spinco Shares.
Non-Registered Shareholders
Alternatively, shareholders of the Company who qualify as "Non-Registered Shareholders" have a different
procedure with respect to their Power Nickel Shares which are registered to an Intermediary or in the
name of a depositary, such as CDS & Co., of which the Intermediary is a participant (the "
Non-
Registered Power Nickel Shares
").
For a Non-Registered Shareholder, the New Power Nickel Shares and the Spinco Shares to which a Non-
Registered Shareholder is entitled to receive in exchange for their Non-Registered Power Nickel Shares
will be delivered to their Intermediary through the procedures in place for such purposes between CDS &
Co., DTC or similar entities and such Intermediary. In particular, their Power Nickel Shares will be
exchanged for: (a) New Power Nickel Shares using a permanent CUSIP; and (b) Spinco Shares using a
temporary CUSIP assigned to the Spinco Shares for the purposes of facilitating the Arrangement. After
completion of the Arrangement, due to the temporary nature of the CUSIP assigned to the Spinco Shares,
the Spinco Shares will no longer be able to be registered in the name of a depositary, such as CDS & Co.,
of which an Intermediary is a participant.
Accordingly, Intermediaries that hold Power Nickel Shares registered in the name of a depositary
(e.g., CDS & Co. or DTC) of which they are a participant must obtain from the Depositary a DRS
Advice representing the aggregate number of Spinco Shares to which all of the Intermediary's
respective underlying Non-Registered Shareholders are entitled to receive in exchange for their
Power Nickel Shares.
Additionally, the Intermediary and its respective Non-Registered Shareholders may arrange to
have such Spinco Shares re-registered either (1) directly in the name of its respective Non-
Registered Shareholder, or (2) in the name of the Depositary to be held in a pooled trust account
on behalf of the Non-Registered Shareholder.
(1)
Re-register the Spinco Shares directly in the name of a Non-Registered Shareholder
For a Non-Registered Shareholder to have the Spinco Shares re-registered in their name, the following
steps must be completed:
(i) The Non-Registered Shareholder must complete and submit the attached stock power form (attached
here as
Schedule "B"
) or an acceptable instruction letter to their Intermediary.
(ii) The Intermediary will then provide instructions to the Depositary to facilitate the re-registration of the
Spinco Shares directly to the Non-Registered Shareholder's name as a Registered Shareholder.
(2)
Re-register the Spinco Shares in the name of the Depositary
For a Non-Registered Shareholder to have the Spinco Shares re-registered in the name of the Depositary
to hold the Spinco Shares in a pooled trust account on behalf of the Non-Registered Shareholder, the
following steps must be completed:
(i) The Non-Registered Shareholder must complete and submit the attached stock power form (attached
here as
Schedule "B"
) or an acceptable instruction letter to their Intermediary.
(ii) The Intermediary will then provide instructions to the Depositary to facilitate the re-registration of the
Spinco Shares directly to the Non-Registered Shareholder's name as a Registered Shareholder.
(iii) The Non-Registered Shareholder must then complete and submit the attached stock power form
(attached here as
Schedule "C"
) to the Depositary to transfer the Spinco Shares from the Non-Registered
Shareholder's name to the Depositary's pooled trust account.
As
soon
as practicable following such process,
the Depositary
will cause to be delivered to the
Intermediary or the Non-Registered Shareholders, as applicable, the DRS Advice(s) representing
the aggregate Spinco Shares to which the applicable Intermediaries or Non-Registered
Shareholders are entitled to receive in exchange for the applicable Non-Registered Power Nickel
Shares.
To facilitate the distribution of the Spinco Shares to Non-Registered Shareholders in exchange for
their Non-Registered Power Nickel Shares, management of the Company advises that Non-
Registered Shareholders send their Intermediary (or Intermediaries) a letter substantially in the
form attached here as
Schedule "A"
requesting that their Non-Registered Power Nickel Shares be
re-registered under their legal name, such that they become a "Registered Shareholder" holding
Uncertificated Shares in advance of the Effective Date of the Arrangement. Please note that Non-
Registered Shareholders who re-register such Non-Registered Power Nickel Shares will not be
able to trade such Power Nickel Shares, or New Power Nickel Shares received in exchange,
through the Intermediary unless such Power Nickel Shares, or New Power Nickel Shares received
in exchange, are deposited back to the Intermediary.
Company Report on Investigation into Improper Trading Activities
Why does management provide this advice? Well, it's a long story. The objective of securities regulation is
to protect investors from unfair, improper or fraudulent practices; to foster fair and efficient capital
markets; and to reduce risks to the market's integrity and to investor confidence in the markets.
Through our press release dated
December 12, 2023
, we have provided data of improper trading
activities that has been used as evidence in 11 court cases that resulted in settlements for the plaintiff. We
filed this data with appropriate authorities at FINRA and CIRO and other than acknowledgement letters,
we heard nothing further.
It is management's position that the review process on these complaints should be transparent and
fulsome, and seek to uphold the objectives of securities regulation mentioned above. It is management's
view that FINRA and CIRO have not properly investigated the complaints and the evidence submitted to
them regarding improper trading activities. Nonetheless, this is our regulatory regime and pathway for
recourse against possible naked short selling, other manipulative actions to lower share prices, and
improper trading activity.
This is something that Save Canadian Mining, an organization I founded with industry icons like
Eric Sprott
,
Rob McEwen
, and
Keith Neumeyer
, along with thousands of disgruntled investors are desperately trying to
change.
For more on Save Canadian Mining check out the following video where
Terry Lynch
and industry legend
Eric Sprott
and a number of legal and regulatory experts discuss the naked shorting problem:
Click image to play video
In addition, please watch the follow up video on the naked shorting issue and the identification of the SME
Rule as the key regulation that needs change with
Terry Lynch
interviewed on Agoracom:
Click image to play video
While we are fighting this issue broadly with fellow miners, as the CEO of Power Nickel I am also fighting
for our shareholders.
Below is the monthly tally sheet from
June 2024
to
November 2024
on our common shares, created for
the Company by Generation IACP, . The monthly tally sheet summaries below illustrate possible naked
short selling as identified by following the trade balance sheets of the brokers trading our common shares.
There are detailed daily and monthly records that break this out broker by broker. The possible naked
short trades identified are out of the 50,562,796 traded on the TSX Venture Exchange ("
TSXV
") where we
have the most comprehensive data. The Company is not able to correlate the alternative trading system
(ATS) data with the anonymous trading. So approximately 29.5% of trading on the TSXV looks to
potentially be naked shorts. We would expect the ATS trading to be potentially worse.
(CNW Group/Power Nickel Inc.)
In addition, the Company had a study conducted by Digital BD, Inc
. of US trading data for Power
Nickel Shares, which can be accessed here. The US data is considered to be a highly credible source in
various legal disputes, including litigation involving short selling. The Canadian projection in the study relies
on assumptions and is subject to certain qualifications and disclaimers as provided in the study. We
consider the Generation IACP data more robust for a sense of the trading in Canadian markets.
The only logical assumption is some way, some how millions of Power Nickel Shares in this seven month
period alone have been sold but have not landed in any brokerage account.
We couple this action and information with our successful drilling program as illustrated by cross section
below from our recent press release dated
December 18, 2024
on the Lion Zone:
(CNW Group/Power Nickel Inc.)
Legendary Mining All Star investors like
Robert Friedland
,
Rob McEwen
and
Gina Rhinehart
have invested
because they see one of the most exciting mineral discoveries in recent years.
Our shareholders ask us quite fairly: "why is there so much selling when the news is so good, why doesn't
our stock perform better?"
To us the black and white of it is somehow our system of trading is allowing the manufacture of counterfeit
shares. Shares that do not have a DRS or share certificate associated with it. This selling suppresses and
reverses stock price increases; it is evidence we believe of price manipulation.
We believe this is accomplished through brokers allowing improper use of the Short Market Exempt (SME)
Status. This status allows non-market makers to hit any bid with a sales order and not mark it as a short
sale. Theoretically, they would need to complete the sale but Save Canadian Mining feels this is not
happening in a compliant way. Trades are to be settled for a day. But who oversees this?
I can't speak for the
USA
but in
Canada
it's not CIRO. If a trade is not settled in a day on a regular
brokerage account a series of checks and balances come into play. This is not where the problem arises.
SME trades have little to no checks and balances.
CIRO only reviews failed trades. How are failed trades established for a SME trade? You won't believe
the answer! A failed trade only happens when the bank that allowed it declares it as a failed trade. Not a
great incentive to call a failed trade a failed trade. It's analogous to putting a fox in charge of the chicken
house and trusting them on the security of the chickens.
We believe that our research and data proves that there are counterfeit shares being traded; as
management of Power Nickel, we feel it is incumbent on us to provide advice to our shareholders so they
can best secure their Power Nickel Shares, as well as the New Power Nickel Shares and Spinco Shares
they should receive as part of the Arrangement.
We have been working tirelessly with politicians, regulators and stock exchange officials on these matters
and only because of the limited action and the overwhelming proof do we take this dramatic step to
publicize our research and data. We know from working with Save Canadian Mining that Power Nickel is
not the only company in this boat. Have you ever wondered why the TSXV is at or near all time lows
despite commodity price increases?
(CNW Group/Power Nickel Inc.)
On a positive note, we believe industry and shareholders have only just begun to fight for our rights. We
will use any and all lawful means to protect our shareholders and recover fair compensation for the
damages caused, and additionally, where allowed, punitive damages.
Our shareholders should take heart, and indeed shareholders of Canadian miners should take heart,
because when we beat these malicious predatory naked short sellers we will see in our view the greatest
mining boom in history.
Join the fight, join Save Canadian Mining at
https://savecanadianmining.com
and support companies like
Power Nickel as we fight to see our shareholders receive fair treatment.
Power Nickel Engages Native Ads and Empire for Marketing Services
In addition, the Company is please to announce that it entered into a service agreement with Native Ads,
Inc. ("
Native Ads
") dated
January 10, 2025
pursuant to which Native Ads will provide a marketing
campaign for a total retainer of up to
US$265,000
, with a term of up to twelve months or until the retainer
is depleted. Under the agreement, Native Ads will execute a comprehensive digital media advertising
campaign for the Company, where approximately 75% of the campaign budget will be allocated to cost
per click costs, media buying and content distribution, and search engine marketing. The remaining budget
will be allocated for content creation, web development, advertising creative development, search engine
optimization, campaign optimization, and reporting and data insights services. Native Ads is a full-service
advertising agency based out of
New York
and
Vancouver, BC
. Native Ads and its principal Jon Malach
are arms length to the Company and hold no interest, directly or indirectly, in the securities of the
Company or any right to acquire such an interest. The engagement of Native Ads by the Company is
subject to the approval of the TSXV.
The Company has also entered into a service agreement with Empire Marketing Ventures LLC ("
Empire
")
dated
January 8, 2025
pursuant to which Empire will provide a market awareness campaign for a total
retainer of up to
US$150,000
with a term running until
July 1, 2025
. Under the agreement, Empire will
provide services aimed at raising awareness, including articles, SMS and email campaigns, social media
and digital media campaigns. Empire and its principals are independent of Power Nickel, operating at
arm's length, and are not related parties. Neither Empire Market Ventures nor its principals hold any direct
or indirect interest in Power Nickel's securities, nor do they have any right or intent to acquire such an
interest. Empire is a full-service advertising agency based out of
New York
. The engagement of Empire by
the Company is subject to the approval of the TSXV.
About Power Nickel Inc.
Power Nickel is a Canadian exploration company focusing on developing the High-Grade Nickel Copper
PGM, Gold and Silver Nisk project into potentially
Canada's
next poly metallic mine.
On February 1, 2021, Power Nickel (then called Chilean Metals) completed the acquisition of its option to
acquire up to 80% of the Nisk project from Critical Elements Lithium Corp. (CRE: TSXV).
The NISK property comprises a large land position (20 kilometres of strike length) with numerous high-
grade intercepts. Power Nickel is focused on expanding the high-grade nickel-copper PGM, Gold and
Silver mineralization with a series of drill programs designed to test the initial Nisk discovery zone, the Lion
discovery zone and to explore the land package for adjacent potential poly metallic deposits.
In addition to the Nisk project, Power Nickel owns significant land packages in British
Colombia
and
Chile
.
Power Nickel is expected to finalize the reorganization of these assets in a related vehicle through the
Arrangement.
For further information, readers are encouraged to contact:
Power Nickel Inc.
The Canadian Venture Building
82 Richmond St East, Suite 202
Toronto, ON
Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the
adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
This message contains certain statements that may be deemed "forward-looking statements" concerning
the Company within the meaning of applicable securities laws. Forward-looking statements are statements
that are not historical facts and are generally, but not always, identified by the words "expects," "plans,"
"anticipates," "believes," "intends," "estimates," "projects," "potential," "indicates," "opportunity," "possible"
and similar expressions, or that events or conditions "will," "would," "may," "could" or "should" occur.
Although the Company believes the expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of future performance, are subject to
risks and uncertainties, and actual results or realities may differ materially from those in the forward-
looking statements. All statements, other than statements of historical fact, included herein, without
limitation, completion of the proposed Arrangement, the benefits of the Arrangement, the challenges
created for naked short sellers and the Company's ability to combat malfeasance and improper trading
activities, the creation of the greatest mining boom in history, are forward-looking statements. There can
be no assurance that such statements will prove to be accurate, and actual results and future events could
differ materially from those anticipated in such statements. Forward-looking statements reflect the beliefs,
opinions and projections on the date the statements are made and are based upon a number of
assumptions and estimates that, while considered reasonable by Power Nickel, are inherently subject to
significant business, economic, competitive, political and social uncertainties and contingencies. Many