Power Nickel Inc (TSX-V:PNPN) has announced a proposed non-brokered private placement of up to 10,000,000 flow-through (FT) units at a price of $0.20 each and up to 10,000,000 non-flow-through (NFT) units at a price $0.10 each for aggregate gross proceeds of up to C$3 million.
The company said it intends to use approximately $800,000 of the proceeds from the sale of the NFT units to settle an outstanding debenture and intends to use the remainder of the proceeds from the sale of the NFT units for general administrative and working capital purposes.
Power Nickel said it intends to use the gross proceeds from sale of the FT units to incur eligible "Canadian exploration expenses", within the meaning of the Income Tax Act (Canada), that will qualify for the federal 30% Critical Mineral Exploration Tax Credit under the draft legislation released on August 9, 2022.
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Each FT Unit will be composed of one common share of the company that qualifies as a "flow-through share" for purposes of the Income Tax Act (Canada) and one non-flow-through common share purchase warrant. Each warrant will be exercisable into one non-flow-through common share at exercise price of $0.20 per warrant for a period of five years from the date of issuance. Each NFT Unit will be composed of one common share and one warrant.
The warrants will be subject to an acceleration clause which entitles the company to provide notice to holders that the warrants will expire 30 days from the date the company provides the acceleration notice if the closing price of the company's common shares on the TSX Venture Exchange is equal to or greater than $0.40 for 10 consecutive trading days. The acceleration notice can be provided at any time after the statutory hold period and before the expiry date of the warrants.
All securities issued under the private placement will be subject to a four-month and one-day statutory hold period.
The private placement is subject to TSX Venture Exchange approval.
Power Nickel is focused on high-potential copper, gold, and battery metal prospects in Canada and Chile.
Contact the author at jon.hopkins@proactiveinvestors.com