Power Nickel to Spin out British Columbia and Chilean Projects into Consolidated Gold and Copper Inc. via Plan of Arrangement and Places 3% Copaquire Royalty up for Sale
Power Nickel to Spin out British Columbia and Chilean Projects into Consolidated Gold and Copper Inc. via Plan of Arrangement and Places 3% Copaquire Royalty up for Sale.
Toronto, Ontario – July 20, 2023: Power Nickel Inc. (“” or the “Company”) (TSX-V: PNPN) (OTC: PNPNF) is pleased to announce it has completed its review of the Company’s assets and has formalized the following plan to optimize its non-core assets while maintaining its focus on the exploration and development of Nisk, the Company’s High Grade Nickel PGM Project near Nemaska, Quebec.
Step 1 – The Company will transfer the beneficial interest in its Golden Ivan property to Consolidated Gold and Copper Inc. (“Consolidated”) in exchange for common shares of Consolidated. Consolidated, through various other wholly-owned subsidiaries, also hold the Company’s Chilean assets (other than Copaquire described below). The Company will seek approval to spin out Consolidated via a Plan of Arrangement and distribute Consolidated shares to its shareholders, which will be more particularly described in an information circular (the “Circular”) that will be delivered to shareholders in connection with voting on the Plan of Arrangement and other usual annual general meeting matters. There is no immediate intention to list Consolidated’s shares on any stock exchange or quotation system. As a spin out from a public company, even if Consolidated is not listed, Consolidated will be obligated to file continuous disclosure under Canadian securities laws, including annual audited financial statements and interim unaudited financial statements and related management discussion and analysis.
The Company expects to hold the Annual and Special Meeting in October.
Power Nickel has retained RWE Growth Partners to provide a fairness opinion and valuation as to the value of Consolidated and the fairness of the Plan of Arrangement to shareholders. The Company plans to allocate 25% of the Consolidated shares to Power Nickel’s shareholders as more particularly set out in the Circular. The expectation is that Power Nickel will hold 26,000,000 common shares of Consolidated prior to the proposed Plan of Arrangement. For every 20 shares of Power Nickel that a shareholder holds, that shareholder will receive 1 share of Consolidated resulting in the distribution of approximately 6,500,000 common shares of Consolidated to its shareholders and Power Nickel will retain approximately 19,500,000 Consolidated shares. At completion of the Plan of Arrangement it is expected Consolidated Gold and Copper Inc will be a private company. While the process is unfolding the Company plans to continue to evaluate options, including the sale of all or part of the assets, listing of Consolidated, and the vending of the assets into another entity for cash or shares. Power Nickel’s paid-up Capital base is sufficient such that a spinout is expected to be conducted on a tax deferred basis and should not create a taxable event for most shareholders.
“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 as more accurately detailed in the section below, that may otherwise be overlooked while the Company focuses on Nisk. This will take the burden off the Power Nickel balance sheet and instead allow these assets to be separately valued by the market.” Commented Power Nickel CEO Terry Lynch
Step 2 – The Company is formally placing its 3% Royalty on the Copaquire Project owned by Teck Resources for sale. Teck has the right to buy the first 1% for $3 million USD and has the right of first refusal on a sale of the Royalty. Power Nickel has decided that while the long-term potential for the Royalty is excellent, the sale of the Royalty will reduce dilution at Nisk and that this is the best move for shareholders. To compensate the interested parties looking to acquire the Royalty from the potential of a Teck exercise of its first right of refusal, Power Nickel will agree to pay the proposed Royalty buyer a breakup fee of $300,000 CAD in the event of said exercise. For additional details on Copaquire, please see the section titled Copaquire below.
“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. Commodity prices have risen sharply since these estimations were made and will likely continue to rise. 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,” commented Power Nickel CEO Terry Lynch.
Detailed descriptions of the proposed spinout company Consolidated and the Copaquire Royalty are contained in the sections below.
Consolidated Gold and Copper
Upon approval from shareholders by special resolution, the Company proposes a Plan of Arrangement to spinout Consolidated Gold and Copper Inc. as a separate company. It will have a different CEO and a Board comprised of Power Nickel representatives and independent third parties. It will be comprised of the assets listed below.
British Colombia – Golden Ivan Project
Location
Note 1 – CMX was former symbol of PNPN. References to nearby properties are for information purposes only and there are no assurances that Golden Ivan will receive similar results.
NI43-101 – https://powernickel.com/pdf/golden_ivan_technical_report.pdf
Please refer to the Company’s news release of February 2, 2022 for additional information about Golden Ivan.
Link to the original news in full length:
Qualified Person
Kenneth Williamson, Géo (OGQ #1490), M.Sc., Senior Consulting Geologist, from 3DGeo Solution Inc. is the qualified persons pursuant to the requirements of NI 43-101, and has reviewed and approved the technical content of this press release.
About Power Nickel Inc.
Power Nickel is a Canadian junior exploration company focusing on developing the High Grade Nisk project into Canada’s first Carbon Neutral Nickel mine.
On February 1, 2021, Power Nickel (then called Chilean Metals) completed the acquisition of its option to acquire up to 80% of the Nisk project from Critical Elements Lithium Corp. (CRE: TSXV)
The NISK property comprises a large land position (20 kilometres of strike length) with numerous high-grade intercepts. Power Nickel is focused on expanding the historical high-grade nickel-copper PGE mineralization with a series of drill programs designed to test the initial Nisk discovery zone and to explore the land package for adjacent potential Nickel deposits.[1]
In addition to the Nisk project Power Nickel owns significant land packages in British Colombia and Chile. Power Nickel is expected to reorganize these assets in a related public vehicle through a plan of arrangement.
Power Nickel announced on June 8th, 2021, that an agreement has been made to complete the 100% acquisition of its Golden Ivan project in the heart of the Golden Triangle. The Golden Triangle has reported mineral resources (past production and current resources) in total of 130 million ounces of gold, 800 million ounces of silver and 40 billion pounds of copper (Resource World). This property hosts two known mineral showings (gold ore and magee), and a portion of the past-producing Silverado mine, which was reportedly exploited between 1921 and 1939. These mineral showings are described to be Polymetallic veins that contain quantities of silver, lead, zinc, plus/minus gold, and plus/minus copper.
Power Nickel is also 100-per-cent owner of five properties comprising over 50,000 acres strategically located in the prolific iron-oxide-copper-gold belt of northern Chile. It also owns a 3-per-cent NSR royalty interest on any future production from the Copaquire copper-molybdenum deposit, that was sold to a subsidiary of Teck Resources Inc. Under the terms of the sale agreement, Teck has the right to acquire one-third of the 3-per-cent NSR for $3 million at any time. The Copaquire property borders Teck's producing Quebrada Blanca copper mine in Chile's first region.
For further information on Power Nickel Inc., please contact:
Mr. Terry Lynch, CEO
647-448-8044
For further information, readers are encouraged to contact:
Power Nickel Inc.
The Canadian Venture Building
82 Richmond St East, Suite 202
Toronto, ON
Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
This message contains certain statements that may be deemed “forward-looking statements” with respect to the Company within the meaning of applicable securities laws. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential”, “indicates”, “opportunity”, “possible” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, are subject to risks and uncertainties, and actual results or realities may differ materially from those in the forward-looking statements. Such material risks and uncertainties include, but are not limited to, among others, the timing for the Company to complete the Plan of Arrangement, royalty sale or any other transaction described herein, or risk that such transactions do not close at all; raise sufficient capital to fund its obligations under its property agreements going forward; to maintain its mineral tenures and concessions in good standing; to explore and develop its projects; changes in economic conditions or financial markets; the inherent hazards associates with mineral exploration and mining operations; future prices of nickel and other metals; changes in general economic conditions; accuracy of mineral resource and reserve estimates; the potential for new discoveries; the ability of the Company to obtain the necessary permits and consents required to explore, drill and develop the projects and if obtained, to obtain such permits and consents in a timely fashion relative to the Company’s plans and business objectives for the applicable project; the general ability of the Company to monetize its mineral resources; and changes in environmental and other laws or regulations that could have an impact on the Company’s operations, compliance with environmental laws and regulations, dependence on key management personnel and general competition in the mining industry.
Forward-looking statements are based on the reasonable beliefs, estimates and opinions of the Company’s management on the date the statements are made. Except as required by applicable securities laws, the Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.
[1] The resource estimates at Nisk are historical in nature and the Company’s geology team has not completed sufficient work to confirm an NI 43-101 mineral resource. Mineral resource information is derived from the technical report titled "Resource Estimate for the NISK-1 Deposit, Lac Levac Property, Nemiscau, Québec" dated December 2009. The key assumptions, parameters, and methods used to prepare the mineral resource estimates are set out in the technical report. This report, prepared by RSW Inc in 2009, can be found on the SEDAR website.
