Canada Nickel (TSXV: CNC) has a new major shareholder as of this morning. Anglo American will be taking a 9.9% interesting in the nickel explorer.
The arrangement will see Anglo American invest a total of $24.0 million to purchase roughly 12.3 million shares at a price of $1.95 per share. The price is said to reflect a 10% premium to the 30-day volume weighted average price of the equity, however it is a discount to yesterday’s closing price of $2.00 per share.
The purchase will result in the company owning a 9.9% stake in the firm, which is just under continuous disclosure requirements.
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As part of the arrangement, Canada Nickel at the time of closing the investment is to enter an offtake term sheet, which will see Anglo have the exclusive right to 10% of recoveries of nickel concentrates, which is to include iron and chromium contained within. Interestingly, Anglo will also have rights to 10% of the corresponding carbon credits, if any, associated with the mine.
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The arrangement will also see the firm enter 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. That part of the arrangement will see ore samples delivered to Anglo American for testing to determine if processing recoveries can be improved while reducing the projects environmental footprint.
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The offtake arrangement is for a term of 15 years or a total of 65kt of nickel, which occurs later. If the FutureSmart tech improves the recoveries, Anglo American will also have offtake rights to 100% of any incremental production from the tech.
Canada Nickel last traded at $2.00 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.
