Canada Nickel Company Inc. has announced that it has entered into an agreement with Red Cloud Securities Inc. to act as lead underwriter and sole bookrunner on behalf of a syndicate of underwriters that includes Clarksons Platou Securities AS. (collectively, the “Underwriters”) pursuant to which the Underwriters have agreed to purchase for resale the following equity securities of the Company on a bought deal basis to raise aggregate gross proceeds to the Company of C$25,000,005 (the “Offering”):
• 4,032,259 common shares of the Company (each, a “Common Share”) at a price of C$3.10 per Common Share; and
• 3,424,658 common shares of the Company to be issued as “flow-through shares” within the meaning of the Income Tax Act (Canada) (each, a “FT Share”, and together with the Common Shares, the “OfferedSecurities”) at a price of C$3.65 per FT Share.
Mark Selby, Chair and CEO, commented that “This financing provides us the flexibility to remain well-funded with a broader base of institutional shareholders to support the Company as we continue to aggressively advance the Crawford Nickel Sulphide Project.”
The Company has granted to the Underwriters an option, exercisable for a period of 30 days after and including the closing date of the Offering, to purchase any combination of additional Offered Securities for additional gross proceeds of up to 15% of the gross proceeds raised under the Offering to cover over-allotments, if any, and for market stabilization purposes.
The Company plans to use the net proceeds of the Offering to repay the Company’s current loan with Auramet and for general working capital and corporate purposes such as advancing the project through Feasibility Study.
The gross proceeds from the issuance of the FT Shares will be used for “Canadian Exploration Expenses” (within the meaning of the Income Tax Act (Canada)) (the “Qualifying Expenditures”), which will be renounced with an effective date no later than December 31, 2022 to the purchasers of the FT Shares in an aggregate amount not
less than the gross proceeds raised from the issue of the FT Shares. If the Qualifying Expenditures are reduced by the Canada Revenue Agency, the Company will indemnify each purchaser of FT Shares for any additional taxes payable by such purchaser as a result of the Company’s failure to renounce the Qualifying Expenditures.
The Offered Securities will be sold by way of a short form prospectus to be filed in British Columbia, Alberta and Ontario. The Offering is scheduled to close on or around April 7, 2022 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange and the applicable securities regulatory authorities.
In connection with the Offering, the Underwriters will receive a cash commission of 6.0% of the gross proceeds of the Offering. A reduced cash commission of 3.0% will be payable on specific orders. The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.