FPX Nickel Corp. [FPX-TSXV; FPOCF-OTC] said Wednesday October 7 that it hopes to raise $3.2 million from a non-brokered private placement offering of 5.8 million shares priced at 55 cents each. Proceeds are earmarked for the advancement of the company’s flagship Decar nickel district in central British Columbia, including drilling at the Baptiste deposit and Van target.
Proceeds will also be used for metallurgical and market testing of nickel products for the stainless steel and electric vehicle battery markets, the company said in a press release.
Concurrent with the offering, the company said it intends to convert the full amount of principal and interest owing on a long-term loan provided to the company by its chairman Peter Bradshaw. The $4.26 million loan will be converted into 7.75 million shares at 55 cents per share, the company said.
FPX Nickel shares declined on the news, falling 3.1% or $0.02 to 62 cents on volume of 153,615. The shares are currently trading in a 52-week range of 84 cents and 11 cents.
The Decar Nickel District is a greenfield discovery of nickel mineralization in the form of a naturally-occurring nickel-iron alloy called awaruite. Covering 245 km2, it represents a promising target for bulk tonnage, open pit mining, the company has said.
News that FPX is raising $3.2 million comes after the company recently announced positive results from a 2020 PEA for the Baptiste Project at its wholly-owned Decar Nickel District. Baptiste is one of four targets in the Decar Nickel District and has been the main focus of diamond drilling since 2010.
The Baptiste Deposit contains 1.9 billion tonnes of indicated resources averaging 0.122% DRR nickel or 2.4 million tonnes of nickel. On top of that is an inferred resource of 593 million tonnes, grading 0.114% DTR nickel, containing 700,000 tonnes of nickel.
“This PEA establishes Baptiste as a premier large-scale nickel project,” said FPX Nickel President and CEO Martin Turenne. “The Project has the potential to be a significant global nickel operation, with a multi-generational operating life and average annual production of 99 million pounds of contained nickel.
Baptiste’s enormous scale, combined with low C1 operating costs of US$2.74/lb, has the potential to deliver robust operating margins throughout the nickel price cycle, generating average earnings (before royalties, taxes and depreciation) of US$481 million per year and an after-tax NPV of US$1.7 billion.
FPX said the project is well positioned to address the growing market demand for environmentally sustainable nickel production. That is due to the project’s proximity to zero-carbon hydroelectric power, and the fact that its nickel product can bypass smelters for direct sale to end users.
Meanwhile, the company said it has identified a number of optimization opportunities to be investigated in the next phase of project development. For example, it plans to study the potential suitability of Baptiste nickel products for the electric vehicle market.
It will also examine the potential for discovering additional large-scale nickel deposits within the Decar Nickel District on three known targets.