Canada Nickel rallies on possible EDC financing news
Canada Nickel Company Inc. [CNC-TSXV] shares rallied Friday after the company announced the receipt of a letter of intent (LOI) from Export Development Canada, stating its interest in providing long term funding of up to US$500 million in debt financing for the development of the company’s flagship Crawford Project, in Timmins, Ont.
“EDC could consider a debt tenor of up to 18 years, subject to certain conditions,” Canada Nickel said in a press release. “EDC’s participation in project financing is subject to the successful completion of its rigorous due diligence process.’’
Canada Nickel shares advanced on the news, rising 5.0% or $0.05 to $1.04 on volume of 386,870. The shares currently trade in a 52-week range of $2.24 and 89 cents. Agnico-Eagle Mines Ltd. (AEM-TSX, AEM-NYSE) holds a 12% stake in the company on a non-diluted basis.
“We are pleased with the LOI as it marks an important milestone towards securing a full financing package for Crawford,’’ said Canada Nickel CEO Mark Selby. “We look forward to working closely with EDC to complete the due diligence and negotiation process to secure this funding.
Canada Nickel is pursuing the development of processes to allow the production of net zero carbon nickel, cobalt and iron products. The company is 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 company is 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.
“The LOI, along with the refundable critical minerals and carbon storage tax credits in excess of US$600 million that the company expects to qualify for the initial phase of Crawford’s development, demonstrates the significant commitment of the federal government to support this critical project as a high priority,’’ said Selby.
“Additionally, we continue to make good progress with our financial advisors Deutsche Bank, Scotiabank, and Cutfield Freeman to secure the remaining project funding required to begin construction when permits are received, which we expect by mid 2025.’’
Canada Nickel was in the news recently when the company said it had received an equity investment from Korean battery manufacturer Samsung SDI. The company said Samsung would invest US$18.5 million to acquire 15.6 million shares for of Canada Nickel, becoming an 8.7% shareholder. The Korean firm agreed to pay $1.57 each for the shares.
Samsung was also granted the right to purchase a 10% equity stake in Canada Nickel’s Crawford Nickel-Cobalt Sulphide project. Samsung can exercise the option once a final construction decision has been made. Assuming it does, the Japanese firm will be granted certain offtake rights to the Crawford project’s nickel-cobalt products.