North American Nickel Inc. Announces Best Efforts Private Placement Offering of $5 Million of Subscription Receipts
Vancouver, April 4, 2022 - North American Nickel Inc. (TSXV: NAN) (OTCQB: WSCRF) (the "Company" or "NAN"), is pleased to announce that it has entered into an agreement with Paradigm Capital Inc. (the "Agent") to act as lead agent and sole bookrunner, on behalf of a syndicate, on a "best efforts" basis, for a private placement offering of subscription receipts of the Company (the "Subscription Receipts") for gross proceeds of $5,000,000 (the "Offering") at a price of $0.48 per Subscription Receipt (the "Issue Price").
Each Subscription Receipt shall be deemed to be automatically exercised, without payment of any additional consideration and without further action on the part of the holder thereof, into a Resulting Issuer Share (as defined below) on a one-for one basis, upon satisfaction of the Escrow Release Conditions (as defined below), subject to adjustment in certain events.
The net proceeds from the Offering shall be used to fund exploration and development, working capital and for general corporate purposes.
The Agent shall have the option (the "Agent's Option") to increase the size of the Offering by up to 15% of the base Offering size, which Agent's Option shall be exercisable, by notice in writing to the Company, at any time not less than 48 hours prior to the Closing Date.
The Offering is expected to close on or about April 28, 2022 (the "Closing Date"), or such other date as the Agent and the Company may mutually agree, and is subject to certain conditions, including but not limited to, the receipt of all necessary approvals, including conditional approval from the TSX Venture Exchange (the "TSXV"). The securities issued pursuant to the Offering will be subject to applicable hold periods, including the typical four month period from Closing Date of the Offering.
Proposed RTO Transaction
The Company has entered into a non-binding letter of intent with Premium Nickel Resources Corporation ("PNR"), to complete a going public transaction by way of a reverse take-over (the "Transaction"). The Transaction will be completed by way of a triangular amalgamation involving PNR, the Company and a wholly-owned subsidiary of the Company to create a combined entity (the "Resulting Issuer") under the laws of the Province of Ontario. The final structure of the Transaction is subject to receipt of final tax, corporate and securities law advice by both the Company and PNR.
Pursuant to the policies of the TSXV, PNR is a "Non-Arm's Length Party" of the Company. The Company currently holds approximately 9.8% of the outstanding common shares of PNR on a basic, undiluted basis, and a warrant entitling the Company to purchase an additional 15% of the equity of PNR, on an undiluted basis, for US$10 million, until February 26, 2025 (the "15% Warrant").
In connection with the Transaction, each common share of PNR outstanding immediately prior to the closing of the Transaction, other than any common share of PNR held by the Company, is expected to be exchanged for 5.27 common shares of the Resulting Issuer (the "Resulting Issuer Shares") (before giving effect to any Consolidation (as defined below)) and the 15% Warrant and the common shares of PNR held by the Company will be extinguished. The final exchange ratio is subject to ongoing due diligence.
In connection with the proposed Transaction, the Company is required to seek the requisite shareholder and regulatory approvals to change the name and stock ticker symbol of the Resulting Issuer as part of the Transaction to such name and ticker symbol as may be requested by PNR, acting reasonably, and consolidate the common shares of the Resulting Issuer (the "Consolidation").
On the Closing Date (as defined below), the gross proceeds of the Offering, less 100% of the expenses of the Agent payable by the Company pursuant to the terms of an agency agreement, to be entered into at closing between the Company, PNR and the Agent (the "Agency Agreement") but including the Cash Commission, as hereinafter defined) will be delivered to and held by a licensed Canadian trust company or other escrow agent (the "Escrow Agent") mutually acceptable to the Agent and the Company and invested in an interest bearing account (the "Escrowed Funds") pursuant to the terms and conditions of a subscription receipt agreement to be entered into on the Closing Date among the Company, Agent and the Escrow Agent (the "Subscription Receipt Agreement"). The Escrowed Funds will be held in escrow pending the earlier of (i) the satisfaction of the Escrow Release Conditions (as defined below) and (ii) the occurrence of a Termination Event (as defined below).
If: (i) the Escrow Release Conditions are not satisfied on or before 5:00 pm EST on that date which is 120 days following the Closing Date (the "Escrow Release Deadline"); or (ii) prior to the Escrow Release Deadline, the Company advises the Agent or announces to the public that it does not intend to proceed with the Transaction and/or satisfy the Escrow Release Conditions, the Escrowed Funds (plus any interest accrued thereon) shall be returned to the holders of the Subscription Receipts on a pro rata basis and the Subscription Receipts will be cancelled without any further action on the part of the holders. To the extent that the Escrowed Funds are not sufficient to refund the aggregate Issue Price paid by the holders of the Subscription Receipts, the Company shall be responsible and liable to contribute such amounts as are necessary to satisfy any shortfall.
For the purposes hereof, Escrow Release Conditions shall mean:
- The receipt of all required corporate, shareholder, regulatory and third-party approvals, if any, required in connection with the Offering and Transaction;
- The completion, satisfaction or waiver of all conditions precedent, undertakings, and other matters to be satisfied, completed and otherwise met or prior to the completion of the Transaction (other than delivery of standard closing documentation) have been satisfied or waived in accordance with the definitive agreement relating to the Transaction, to the satisfaction of the Agent acting reasonably (other than the release of the Escrowed Funds);
- Written confirmation to the Agent from each of the Company and PNR that all conditions of the Transaction have been satisfied or waived, other than release of the Escrowed Funds, and that the Transaction shall be completed forthwith upon release of the Escrowed Funds;
- The distribution of the Resulting Issuer Shares following the satisfaction of the Escrow Release Conditions being exempt from applicable Canadian prospectus and registration requirements of applicable securities laws and not subject to any hold or restricted period, as confirmed by a legal opinion from counsel to the Company;
- The Resulting Issuer Shares being conditionally approved for listing on the TSXV, and the completion, satisfaction or waiver of all conditions precedent to such listing, other than the release of the Escrowed Funds;
- The Company and the Agent having delivered a joint notice and direction to the Escrow Agent, confirming that the conditions set forth in (A) and (B) above have been met or waived; and
- The Company, PNR and the Resulting Issuer shall not be in breach or default of any of its covenants or obligations under the Subscription Receipts Agreement or the Agency Agreement, except (in the case of the Agency Agreement only) for those breaches or defaults that have been waived by the Agent and all conditions set out in the Agency Agreement shall have been fulfilled, which shall all be confirmed to be true in a certificate of a senior officer of each of the Company and PNR.
The securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any U.S. state securities laws, and may not be offered or sold in the United States without registration under the U.S. Securities Act and all applicable state securities laws or compliance with the requirements of an applicable exemption therefrom. This news release does not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor may there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About North American Nickel
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 nickel-copper-cobalt (Ni-Cu-Co) resources. We believe 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. We are committed to governance through transparent accountability and open communication within our team and our stakeholders.
PNR continues to monitor the global Covid-19 developments and is committed to working with health and safety as a priority and in full respect of all government and local Covid-19 protocol requirements. PNR has developed Covid-19 travel, living and working protocols and is ensuring integration of those protocols with the currently applicable protocols of the Government of Botswana and surrounding communities.
ON BEHALF OF THE BOARD OF DIRECTORS
Keith Morrison
Chief Executive Officer
North American Nickel Inc.
For more information contact:
North American Nickel Inc.
Jaclyn Ruptash
Corporate Communications
+1 (604) 770-4334
Neither 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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release includes certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities legislation concerning the business, operations and financial performance and condition of the Company. Forward-looking statements and forward-looking information include, but is not limited to, statements about the future prospects of any assets or properties of the Company, the ability of the Company to successfully complete due diligence, the ability of the Company to successfully complete the Offering and the Transaction, the ability of the Company to access capital, any spending commitments, the success of exploration activities, the future economics of minerals including nickel and copper, the benefits of the development potential of the properties of the Company, the benefits of drilling and advancement of projects. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors, which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the mineralization that will be encountered if the property is developed.
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