Canada Nickel (TSXV: CNC; US-OTC: CNIKF) is spinning out its eastern exploration properties, northeast of Timmins, Ont., and its Mann joint venture with Noble Mineral Exploration (TSXV: NOB; US-OTC: NLPXF) into a private company that will be 80% held by Canada Nickel and 20% by Noble.
Canada Nickel completed an 80% earn-in on Mann Northwest in April. Under the binding letter of intent signed by the two companies, Noble will also contribute several other properties.
In addition to the large-tonnage, low-grade nickel properties each company is contributing, the consolidation extends to include strategic mining and surface rights essential for advancing Canada Nickel’s flagship Crawford nickel sulphide project and other nearby prospects.
“Today is the first of a set of transactions designed to unlock value from our significant asset portfolio,” Mark Selby, CEO of Canada Nickel, said in a release. “The creation of ExploreCo will facilitate the ability to realize the future value of these properties that are not currently recognized in Canada Nickel’s market value.”
Canada Nickel will contribute $5 million in initial funding for the new company, with subsequent costs shared based on ownership stakes. Both companies will retain existing royalty rights on the new company’s claims.
Led by Steve Balch, Canada Nickel’s current VP of exploration, the spinout will initially oversee 1,989 mining claims spread across 420 sq. km. It may pursue a public listing, depending on market conditions.
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