Canada Nickel Company Inc. [CNC-TSXV] shares rallied Friday after the company said it has received an equity investment from Korean battery manufacturer Samsung SDI.
The shares were up 6.3% or 10 cents to $1.68 on volume of 252,490, and trade in a 52-week range of $2.16 and 89 cents.
The company said Samsung will invest US$18.5 million to acquire 15.6 million shares for of Canada Nickel, becoming an 8.7% shareholder. The Korean firm will pay $1.57 each for the shares.
Samsung has also been granted the right to purchase a 10% equity stake in Canada Nickel’s Crawford Nickel-Cobalt Sulphide project, which is located in the Timmins – Cochrane mining camp in Ontario. Samsung can exercise the option once a final construction decision has been made. Assuming it does so, the Korean firm will be granted certain offtake rights to the Crawford project’s nickel-cobalt products.
By exercising the right, Samsung will have the right to 10% of the nickel-cobalt production from the Crawford project over the life of he mine and the right to an additional 20% of Crawford’s nickel-cobalt production for 15 years, extendable by mutual agreement
Samsung SDI is a manufacturer of rechargeable batteries for the IT industry, automobiles and energy storage systems, as well as cutting-edge materials used to produce semiconductors and displays. “We are very pleased to welcome SDI as an investor and project partner with Canada Nickel,’’ said Canada Nickel CEO Mark Selby.
“As we advance the Crawford Nickel Sulphide Project, it is critical to form long-term partnerships with companies that truly understand how crucial this production is for electric vehicle supply chains across North American and Europe,’’ he said.
“As one of the world’s leading electric vehicle battery manufacturers, Samsung SDI not only understands our vital role in these supply chains, but also believes in Canada Nickel’s vision for responsible, large scale, net zero carbon nickel production. Together our two companies are paving he way for a more sustainable future.”
Canada Nickel recently raised $34.7 million from a brokered private placement of flow-through unit. Canada Nickel also welcomed Agnico-Eagle Mines Ltd. (AEM-TSX, AEM-NYSE) as an investor, which holds a 12% stake in the company on a non-diluted basis.
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 the company believes has the potential to become one of the world’s largest nickel-sulphide districts.
The private placement consisted of 19.6 million flow-through units priced at $1.77 per unit.
