South Korean battery manufacturer Samsung SDI has become the latest company to invest in Canada Nickel Company (TSXV: CNC), which is developing the Crawford nickel sulphide project in the Timmins-Cochrane mining camp of Ontario.
Pursuant to a subscription agreement entered Friday, Samsung intends to purchase $18.5 million worth of Canada Nickel’s common shares at C$1.57 per share. Upon closing, Samsung will own approximately 8.7% of the company’s outstanding share capital.
The battery maker will also be granted the right to purchase a 10% equity interest in the Crawford project for $100.5 million, exercisable upon a final construction decision. This would give Samsung the right to 10% of the nickel-cobalt production from the Crawford project over the life of mine, and the right to an additional 20% of production for 15 years, extendable by mutual agreement.
Shares of Canada Nickel Company gained 3.1% to C$1.63 apiece by 12:30 p.m. EDT in Toronto Friday on the Samsung investment. Its market capitalization rose to C$231.6 million ($172.7 million) accordingly.
Crawford is currently host to the world’s second-largest nickel resource, totalling 2.46 billion tonnes at 0.24% nickel for 13.3 billion lb. of contained nickel, according to a feasibility study issued in October, which pegged the project’s after-tax net present value (8% discount) at $2.6 billion and internal rate of return at 18.3%.
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