Capella Minerals has agreed to divest its interests in copper-zinc-cobalt projects in Norway to Norwegian mining company NickelX, in a cash and share deal worth C$7m ($5.13m).

These projects include the Hessjøgruva, Kjøli and Løkken projects, collectively called the Central Norway Copper Projects, in Trøndelag province.

NickelX currently owns 100% interests in the Hamn, Palfjellet, Birgivi and Envold nickel exploration projects in northern Norway.

The company intends to become Norway’s leading independent battery metals company by undertaking an initial public offering (IPO) on Oslo’s Euronext Growth Exchange.

Under the binding agreement, Capella will receive a C$5m cash payment at the closing of the deal, as well as C$2m worth of new NickelX shares upon completion of the IPO.

Capella president and CEO Eric Roth said: “Capella is pleased to have reached this agreement with NickelX providing for the creation of a premier Norwegian battery metals company.

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“Combining our Central Norway Copper Projects with NickelX’s exploration properties and then listing on the Oslo Euronext Exchange will ensure that our projects benefit through access to local capital and stakeholders rewarded through the advancement of the project portfolio.

“We are very confident that NickelX has the technical and financial capabilities, through its access to the Nordic capital markets, along with the depth of expertise and vision to advance further the exciting development phases of the assets and to become the Norwegian critical minerals champion requires for the energy transition.”

The sale forms part of Capella’s effort to further focus on its organic operations in Finland.

The transaction is subject to approval from Capella shareholders, the successful IPO of NickelX, consent to existing royalty agreements and TSX Venture Exchange approval.