Canada Nickel Company Inc. [CNC-TSXV] shares rallied Tuesday after the company said it had raised $34.7 million from a brokered private placement of flow-through units. Canada Nickel also welcomed Agnico-Eagle Mines Ltd. (AEM-TSX, AEM-NYSE) as an investor, which holds a 12% stake in the company and sees this as an early-stage investment in the critical minerals sector.
Canada Nickel is pursuing the development of processes to allow the production of net zero carbon nickel, cobalt and iron products. The company is currently anchored by its 100%-owned Crawford Nickel-Cobalt Sulphide project, which is located in the Timmins – Cochrane mining camp in northern Ontario not far from Agnico’s operations in the Abitibi region of Ontario and Quebec.
“The proceeds from this offering will help us continue to unlock the potential of our Timmins Nickel District, which we believe has the potential to be one of the world’s largest nickel sulphide districts,’’ said Canada Nickel CEO Mark Selby.
Canada Nickel shares advanced on the news, rising 15% or 17 cents to $1.31 on volume of 485,680. The shares are currently trading in a 52-week range of $2.20 and 89 cents.
The private placement consisted of 19.6 million flow-through units priced at $1.77 per unit. Each unit consisted of one flow-through common share and 0.35 of one flow-through common share purchase warrant. Each whole warrant entitles the holder to acquire one Canada Nickel common share at $1.77 per warrant share for 36 months from the date of closing.
Under the terms of the financing, beginning three months from the closing date, if the trading price of the common shares on the TSX Venture Exchange exceeds $2.65 for at least 20 consecutive trading days, Canada Nickel can accelerate the expiry date of the warrants to 30 days after warrant holders have been notified.
The company has also entered into a rights agreement with Agnico-Eagle, allowing Agnico to maintain certain ownership thresholds and nominate one person to the Canada Nickel board
Following closing of the offering Agnico-Eagle acquired the units and as a result, holds approximately 12% of the company issued and outstanding shares on a non-diluted basis and 15.6% on a partially diluted basis (assuming all the warrants are exercised).
The company also aiming to incorporate carbon capture and storage into its flagship Crawford nickel project. The company recently said Carbon capture test work confirms that it could store one million tonnes of carbon annually.
It said test results have validated the decision to incorporate IPT Carbonization into an integrated feasibility study.
Canada Nickel’s Crawford Project is hosted in ultramafic rock, which naturally absorbs and sequesters CO2. The company said the potential to actively capture and sequester carbon was a key consideration in its acquisition of the 42 square kilometres of target ultramafic rocks in the Timmins region, which, it says, could anchor a zero-carbon industrial cluster in Timmins.
