Mining Corp. and Nevada Vanadium Mining Corp. have announced that they have entered into a definitive arrangement agreement dated October 6, 2022 pursuant to which Flying Nickel will acquire all of the issued and outstanding common shares of Nevada Vanadium (the “Nevada Vanadium Shares”) by way of a court-approved plan of arrangement.
Under the terms of the transaction, Nevada Vanadium shareholders are expected to receive one Flying Nickel common share for each Nevada Vanadium Share held immediately prior to the effective time of the transaction, representing the equivalent of $0.195 per Nevada Vanadium Share, based on the closing price of Flying Nickel Shares on the TSX Venture Exchange on October 6, 2022. The convertible securities of Nevada Vanadium are expected to remain outstanding following completion of the transaction, however, upon exercise, are expected to entitle the holder thereof to obtain Flying Nickel Shares subject to the terms of such convertible securities of Nevada Vanadium.
Currently, Flying Nickel has approximately 62 million shares outstanding, and Nevada Vanadium has approximately 53 million shares outstanding. Upon completion of the Transaction, the combined company (the “Resulting Issuer”) will be owned approximately 54% by Flying Nickel shareholders and 46% by Nevada Vanadium shareholders. The Resulting Issuer is expected to continue to be listed on the TSXV as a mining issuer. Flying Nickel has received conditional approval from the TSXV in respect of the Transaction.
The implied equity value for Nevada Vanadium as of the date of the arrangement agreement based on the Exchange Ratio is approximately $7,847,907 based on the 20-day volume-weighted-average-price of Flying Nickel Shares on the TSXV as of close on October 6, 2022. Nevada Vanadium is a reporting issuer in each of the provinces and territories of Canada other than Quebec and the Nevada Vanadium Shares are not listed for trading on any stock exchange.
The transaction is expected to close in December 2022 and is subject to customary deal protections with a mutual break fee of $2,000,000, payable under certain circumstances.
Full details of the transaction will be included in the meeting materials to be prepare in respect of the Flying Nickel Meeting and Nevada Vanadium Meeting, which are expected to be mailed to the respective shareholders of Flying Nickel and Nevada Vanadium by November 2022.
Nickel and vanadium are both key ingredients in batteries and classified as critical metals by U.S. Geological Survey. Flying Nickel’s Minago project and Nevada Vanadium’s Gibellini project are both entering into the final environmental permitting stages and are located in mining friendly districts in North America. The combined company will have one-of-a-kind mineral resource base and a dominant presence in the battery metals mining space.