Canada Nickel secures US$12 million Auramet loan
Canada Nickel Company Inc. [CNC-TSXV] said it has secured a US$12 million loan from Auramet International Inc. that will allow the company to remain well financed and continue to advance permitting and detailed engineering studies at its Crawford nickel sulphide project near Timmins, Ont.
The company said it has closed the secured load facility which is due on December 18, 2023, and carries an interest rate of 1.00% per month. The loan is subject to a 2.3% arrangement fee.
Privately-owned Auramet is one of the largest physical precious metals merchants in the world, boasting over US$12 billion in annual revenue. It’s business consists of three main activities: physical metals trading, metals merchant banking (including direct lending) and project finance advisory services.
Canada Nickel Auramet has also received 550,000 one-year warrants with a strike price of $1.24 per common share. The warrants and the underlying shares will be subject to a four-month hold period under applicable securities laws.
Details of he loan and warrant purchase agreement were released after the close of trading on September 18, 2023, when Canada Nickel shares closed at $1.23. The shares are currently trading in a 52-week range of $2.20 and $1.09.
Crawford has said it is poised to be a leader in the energy transition through the large-scale production of critical minerals, including nickel and cobalt, and to become the sole North American producer of chromium, while also supporting Canada’s climate objectives through large scale carbon capture and storage and providing an anchor for a zero-carbon industrial cluster in the Timmins-Cochrane region.
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.
It said test results have validated the decision to incorporate IPT Carbonization into an integrated feasibility study, which is expected to be announced in September, 2023.
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, Ont., region, which, it says, could anchor a zero-carbon industrial cluster in Timmins.
Canada Nickel said it has developed a simple active process that utilizes tailings as generated in the milling process and injects a concentrated source of C02 for a brief period of time. “This novel process for accelerated mineral carbonization is called In Process Tailings Carbonation or IPT Carbonation, which fixes C02 geologically while the tailings are still in the processing circuit, rather than after they have been finally deposited.”
The company believes that successful incorporation of IPT Carbonation could potentially allow a portion of the company’s project capital expenditures to become eligible for carbon capture and storage refundable investment tax credits of 37.5% to 60% from 2022-30 and 18.75% to 30% from 2031-40 as announced in 2022 federal budge documents.