Canada Nickel Company has entered a binding letter of intent (LOI) with Noble Mineral Exploration to establish a new subsidiary named ExploreCo, aimed at consolidating their respective interests in the portfolio of nickel projects located north-east of Timmins, Ontario.

Under the terms of the LOI, Canada Nickel will hold an 80% stake in ExploreCo, while the remaining 20% will be held by Noble.

As part of the transaction, Canada Nickel will consolidate ownership of the mining rights and access to the surface rights for specific key patents in the townships of Aubin, Crawford, Carnegie, Dargavel, Kidd, Lennox, Lucas, Nesbitt, Prosser and Wark, which are currently held by Noble.

This move is expected to streamline the future development of Crawford and other nearby regional properties held by Canada Nickel.

ExploreCo will be led by Canada Nickel Exploration vice-president Steve Balch.

It will oversee 1,989 mining claims spanning roughly 42,000ha, encompassing nickel properties in the Mann, Newmarket and Reaume Townships, along with Calder, Galna, McCool, Moody, Mortimer, Stimson and other properties currently owned by Canada Nickel.

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Additionally, Canada Nickel will continue to operate ExploreCo, providing both administrative and technical support.

The initial $5m (C$6.82m) funding for ExploreCo will come from Canada Nickel’s existing funds. Subsequent costs will be funded based on pro rata ownership, starting with Canada Nickel owning 80% and Noble owning 20%.

Both companies will retain their current royalty rights on the ExploreCo claims, along with previous claim owners that originally sold claims to Noble.

Noble will have the right to nominate one director to the board of directors of ExploreCo, while Canada Nickel will appoint two directors, with an additional two directors being mutually agreed upon by both parties.

Going forward, ExploreCo may pursue a public listing if market conditions are favourable.

Canada Nickel CEO Mark Selby said: “Today is the first of a set of transactions designed to unlock value from our significant asset portfolio. The creation of ExploreCo will facilitate the ability to realise the future value of these properties that are not currently recognised in Canada Nickel’s market value.

“This transaction also allows the company to consolidate the surface rights, remaining claims and patents around the Crawford Nickel Sulphide Project to simplify the development of Crawford and our future projects.”