FULL DISCLOSURE: This is sponsored content for Power Nickel.
Power Nickel (TSXV: PNPN) is focusing its efforts solely on its Nisk high grade nickel-PGM project in Quebec, revealing last night that it had completed a review of its assets.
As part of the strategic review conducted, the company has elected to conduct a spin-out of certain non-core assets. The transaction will see the company move its Golden Ivan property to its Consolidated Gold and Copper Inc subsidiary, which also holds Power Nickel’s Chilean assets, except for the Copaquire royalty.
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The company intends to then spin-out Consolidated Gold, although the spin-out does not intend to immediately list on a public exchange. Power Nickel notes here that Consolidated will still be required to file continuous disclosure however, including audited financial statements, and that it will continue to evaluate all options.
Assets included in the spin-out include the Golden Ivan project in British Columbia, along with the Chilean assets of Zulema, Palo Negro, and Tierra de Oro, which are prospective for copper.
“We believe splitting off the non-core assets into Consolidated will be beneficial for Power Nickel shareholders. It will enable the new entity to separately finance and pursue growth opportunities [..] that may otherwise be overlooked while the Company focuses on Nisk,” commented CEO Terry Lynch.
As part of the transaction, Power Nickel is to distribute 25% of the shares of Consolidated Gold to holders of Power Nickel, resulting in the distribution of 6.5 million shares. Shareholders of record are expected to receive 1 share of Consolidated for every 20 shares of Power Nickel currently held.
The transaction remains subject to shareholder approval.
Separately, the company intends to sell its Copaquire Royalty, which it obtained following the sale of Copacquire to Teck Resources in 2013. The asset is a 3% NSR, of which Teck has the right to obtain 1% for US$3 million. The decision to sell the asset is believed to reduce dilution at Nisk.
“We have held onto the Copaquire Royalty for a very long time. It has a substantial known 43-101 compliant mineral resource estimates, and the super gene remains yet undiscovered. [..] In this time where developable global copper projects are rare, we are confident it will find its way into production and confirm the value of our royalty,” continued Lynch.
Power Nickel last traded at $0.205 on the TSX Venture.
FULL DISCLOSURE: Power Nickel is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Power Nickel. The author has been compensated to cover Power Nickel on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.
