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Samsung SDI to invest US$18.5M for 8.7% stake in Canada Nickel; right to purchase 10% of Crawford project for US$100.5M

Canada Nickel Company entered into a subscription Agreement with Samsung SDI to make a US$18.5-million investment in Canada Nickel at a price of C$1.57 per Common Share. Upon closing of the private placement, Samsung SDI will own approximately 15.6 million shares of the common shares of Canada Nickel, representing approximately 8.7% of the company’s issued and outstanding shares on a non-diluted basis.

Samsung SDI is a manufacturer of rechargeable batteries for the IT industry, automobiles, and energy storage systems as well as materials used to produce semiconductors and displays.

At closing of the private placement, Canada Nickel will grant to Samsung the right to purchase a 10% equity interest in Canada Nickel's Crawford project for US$100.5 million, exercisable upon a final construction decision. Crawford contains the world’s second-largest nickel reserves (3.8 Mt contained nickel, behind Norilsk’s 8.7 Mt reserves in Russia.)

Crawford is expected to be the third-largest nickel sulfide operation globally, based on bankable feasibility study results, behind Norilsk and Jinchuan in China.

By exercising this right, Samsung SDI will have the right to 10% of the nickel-cobalt production from the Crawford project over the life of mine and the right to an additional 20% of Crawford’s nickel-cobalt production for 15 years extendable by mutual agreement. The offtake rights will be based on mutually agreed terms.

The closing of the private placement and related agreements is subject to customary closing conditions including the approval of the TSX Venture Exchange and is targeted to close on or about 31 January 2024.

Canada Nickel is working to advance the next generation of nickel-sulfide projects to deliver nickel required to feed the electric vehicle and stainless steel markets. Canada Nickel is currently anchored by its 100%-owned flagship Crawford Nickel-Cobalt Sulfide Project in the heart of the prolific Timmins-Cochrane mining camp.

Canada Nickel’s Crawford Project is hosted in ultramafic rock, which naturally absorbs and sequesters CO2. Canada Nickel has developed a novel IPT Carbonation process which involves injecting a concentrated source of CO2 into tailings generated by the milling process for a brief period of time. This process captures CO2 geologically in the tailings while they are still in the processing circuit, rather than after they have been finally deposited.

Benchmark Mineral Intelligence reports that low nickel prices are pushing Western nickel miners to halt or slow down projects as they look to cut down on costs and protect margins amid a rapid decline in prices due to increased supply from Indonesia.

Mining giant BHP said the nickel industry is undergoing “structural changes” with options being reviewed for its nickel operations to reduce the impact of the sharp fall in prices.

BHP owns the West Musgrave nickel project in Western Australia and the Nickel West unit, which includes a nickel sulfate refinery. The company inked a deal to supply nickel to Tesla in 2021.

The low pricing we see in nickel at the moment is starting to press on producers.

—Will Talbot, Benchmark analyst

Canada Nickel says, however, that Indonesian supply will not be a solution for a number of consumers due to its massive carbon footprint. Other consumers will be deterred by integrated Chinese supply chains, the company suggests.


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