Canada Nickel Announces $20 Million Financing, Providing Anglo American With An Immediate $2.2 Million Paper Loss

Just hours after Canada Nickel (TSXV: CNC) announced that Anglo American would be taking a 9.9% stake in the firm as part of an offtake arrangement, it appears that the company is taking the shareholder excitement to the bank. After the close of markets, the firm revealed it will be conducting a bought deal financing to bring further capital into company coffers.

The financing will see the firm sell 7.5 million shares at a price of $1.77 per share, with a further 1.7 million shares to be sold on a flow through basis at $2.86 per share. No warrants are being offered in the financing.

The price per share represents a 9.2% decline from the price paid by Anglo American, amounting to an immediate paper loss of $2.2 million before the day is even over for the company. The price per share meanwhile represents a 15.7% discount to the closing price of the equity today.

READ: Canada Nickel Sees Anglo American Take 9.9% Stake As Part Of Offtake Deal

The company expects Anglo American to subscribe for an additional $1.8 million to bring total proceeds from the financings to $20.0 million.

A 15% over allotment option has also been issued in connection with the financing.

The financing follows the news from this morning that Anglo American would be investing $24.0 million to take a 9.9% stake in the company. As part of that arrangement, Canada Nickel agreed to provide Anglo with the exclusive right to 10% of concentrate and carbon credits produced by the firm over a period of fifteen years. Canada Nickel also agreed to a material transfer and technology testing agreement, which will see the duo “assess opportunities to add value to Crawford” from what is referred to as the FutureSmart Mining tech program. 

Canada Nickel last traded at $2.10 on the TSX Venture.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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