Power Nickel Inc (TSX-V:PNPN) told investors it has entered into an agreement with CVMR Corporation to coordinate the production of advanced bench scale, piloting and engineering studies on the Nisk Nickel Sulfide project near Nemaska in Quebec to determine project feasibility.
In a statement, the company said it has also arranged for WCPD Group to organize a consortium of Quebec-based investors who will make an initial investment of $2.25 million to fund the feasibility program.
Power Nickel said the agreement with CVMR, a leader in nickel powder, wire and anode production and a key supplier to the battery, defence and aerospace industries, is staged. This will allow the companies to work together on various stages of engineering studies.
"It's been a creative collaboration working with CVMR on structuring this deal,” Power Nickel CEO Terry Lynch said.
“Given their access to internal facilities and staff that is far less expensive than how we could expect to acquire this analysis from traditional suppliers. It also can be done much quicker than normal and will expedite our plans to commercialize Nisk as rapidly as humanly possible.”
Noting that “a lot more class 1 nickel is needed” if global climate goals are to be met, Lynch said miners and processors need to think and act creatively working with government and native partners on ways to do this.
“This is a major step forward for Nisk,” Lynch added.
Power Nickel signed the contract with CVMR on August 2 and CVMR will commence work on the project immediately and look to produce various reports and deliverables over a nine-month period.
The company said it will pay an initial deposit of $2,250,000 to CVMR to commence work.
Funding arrangement
Under the investment organized by WCDP Group, Power Nickel will issue 4.5 million flow-through shares priced at 50 cents each. As part of the process, CVMR will acquire these shares from the front-end purchasers for $0.25 per share.
"We were excited to discover the Nisk project and believe Power Nickel has a very exciting Nickel project on its hands. We do not yet know how big it can be but we see enough there today to believe it has the potential to be a commercial mine,” commented CVMR CEO Kamran Khozan.
“Our initial focus will be on a 10,000-ton-a-day plant. The way we like to develop our processing facilities is to approach them on a modular basis. In this way, we can rapidly scale to match both demand for our products and the availability of supply of the raw material.”
In addition, Power Nickel announced it has also closed on its previously announced $200,000 private placement of 800,000 units at $0.25 per unit. Each unit will consist of one common share and one share purchase warrant with each warrant exercisable for five years at $0.25, subject to an accelerated expiry provision.
Contact the author at stephen.gunnion@proactiveinvestors.com