FPX Nickel Sees Sumitomo Take 9.9% Stake In Company

FPX Nickel (TSXV: FPX) has secured a strategic financing with a new major investor. Sumitomo Metal Mining Canada, a subsidiary of the Japanese conglomerate Sumitomo Metal Mining Co, has agreed to take a stake in the nickel explorer via a private placement financing.

The investment will see Sumitomo take a 9.9% stake in FPX through the purchase of 30.1 million shares at a price of $0.48 per share. The investment will see a total of $14.45 million provided to FPX, which is to be primarily used for further exploration and development at the Baptiste Nickel Project, as well as to support ongoing environmental baseline activities, a feasibility study, and general corporate purposes.

Under the terms of the investment, Sumitomo will be granted certain investor rights, including the right to participate in future financings. The firm has also agreed to a two-year standstill agreement that will limit its ability to expand its stake in FPX to 14.9%. If ownership in FPX exceeds 15% after the conclusion of the standstill agreement, Sumitomo will have the right to nominate one director to the board.

As part of the investment, FPX will grant a right of second offer for the negotiation of an offtake agreement for up to 60,000 tonnes of nickel from the project, provided that Sumitomo retains its interest in the company.

Ownership structure prior to the Sumitomo investment. Source: FPX

“[Sumitomo] is one of the world’s largest nickel producers, with peer-leading expertise in mining, processing and refining products in the stainless steel and electric vehicle battery supply chains. FPX is pleased to be one of [Sumitomo]’s preferred partners as they look to expand their nickel production profile and diversify their supply chain to allied partners in North America,” commented Martin Turenne, President and CEO of FPX.

FPX Nickel last traded at $0.325 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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