Canadian mineral exploration company Premium Nickel Resources has launched an equity and debt financing package, totalling C$20m ($14.7m).
The funding package includes around C$14.1m through a private placement offering of 11.7 million shares, at C$1.2 apiece.
This share offer is expected to close on or about 14 December 2023 or on such date as the company and agents may agree. It awaits regulatory approvals including clearance from the TSX Venture Exchange.
The remaining C$5.9m will come from an amended term loan with Cymbria (lender), where the principal amount has been increased from C$15m to C$20.9m. This will result in additional gross proceeds of C$5m.
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In a statement, Premium Nickel said: “The additional principal amount will be subject to an original issue discount of approximately 15% and will be made available by the lender to the company as a single advance in an amount equal to C$5m on the closing of the amended term loan.”
This additional principal amount will carry an interest of 10% per annum and will be payable in quarters. The loan will mature and be payable on 28 June 2026.
As a consideration for this amendment, the company agreed to issue another 700,000 share purchase warrants to the lender.
Each warrant will be priced at C$1.43 and issued on 14 December, concurrent to the closing of the offering.
The company will use the proceeds to advance exploration and development activities at its assets in Botswana and for general corporate and working capital requirements.
For the offering, Premium Nickel signed an engagement letter with Cormark Securities, on behalf of BMO Capital Markets as co-lead agent and a syndicate of agents.
The company expects that EdgePoint Investment Group or an entity managed by EdgePoint will use its right to participate and acquire shares as per its current ownership stake.
In February 2022, the company agreed to acquire the Selkirk mine in Botswana, which hosts nickel-copper-cobalt-platinum-group metals (Ni-Cu-Co-PGM), from the liquidator of Tati Nickel Mining Company (TNMC). The acquisition closed in August last year.
The Selkirk mining licence covers about 14.6km² and the four prospecting licences span 126.7km².
Anglo American began mining at the site between 1989 and 2002, producing Ni-Cu massive sulphides and producing one million tonnes at 2.6% Ni and 1.5% Cu.