Nuinsco Looking at Nickel Spinoff by Year-End

Plans by Nuinsco Resrouces (NWI-T, NUIRF-O) to set up a separate company to hold its nickel assets should harden into a formal plan of arrangement this quarter, the company announced in its quarterly financial report.

The spinoff, which would put the feasibility stage Mel and Minago projects in Manitoba and the Lac Rocher exploration project in Quebec into a new company, was approved in principle at Nuinsco’s general meeting last spring. Management has suggested that separating out a “pure-play” nickel company would command a higher valuation on the stock market.

Nuinsco showed a modest profit in the quarter, thanks to management fees from Campbell Resources (CCH-T, CBLRF-O) and a gain from the sale of shares in Rainy River Resources (RR-V, RRFFF-O). Net income was $34,000 on revenue of $873,000.

For its part, Campbell posted a loss of $4.9 million (4 per share) on revenue of $2.3 million in the third quarter, versus a loss of $645,000 on revenue of $4.9 million in the comparable quarter of 2005. The Quebec Superior Court granted the company an extension of its creditor protection to the end of February 2007, which will allow it to implement a restructuring that creditors approved in June.

A rights offering to refinance Campbell, in which Nuinsco would participate, was held up by regulatory problems in October, but Campbell now has a receipt for an amended prospectus in hand. The offering gives one right per share to existing shareholders, with 10 rights exchangeable for three units at 8 per unit.

The units consist of a common share plus half a warrant, with one warrant exercisable at 15 until late May 2008. Campbell can accelerate the warrants’ expiry after May 2007 if its average share price stays above 30 for 20 days.

Funds from the offering will go to settling Campbell’s liabilities and will provide some additional working capital.