Canada Nickel Takes Bold Step with New RoyaltyCo Subsidiary Formation and Sale

Canada Nickel's Strategic Move: Formation of RoyaltyCo Subsidiary

On March 17, 2025, Canada Nickel Company Inc.—known in the market as Canada Nickel—announced a pivotal decision that could redefine its financial landscape. The company, traded on TSX-V under the ticker CNC and OTCQB under CNIKF, has signed a binding Letter of Intent with Edmiston Drive Capital Corp (EDCC) to create a new royalty company, termed RoyaltyCo. This strategic partnership not only aims to enhance Canada Nickel's revenue stream but also positions it as a significant player in the nickel market.

The essence of the agreement is that RoyaltyCo will manage net smelter return (NSR) royalties associated with Canada Nickel's regional exploration properties in the Timmins Nickel District. Notably, this excludes properties like Crawford and other targets under Project 81 patents. By establishing RoyaltyCo, Canada Nickel is looking to receive a robust infusion of $8 million along with 8.9 million shares of EDCC, solidifying its ownership stake at approximately 62% once the transaction is finalized.

Mark Selby, the CEO of Canada Nickel, expressed enthusiasm about this venture. In his statement, he emphasized the collaborative effort with EDCC and acknowledged the creation of a royalty company will unlock significant value while minimizing equity dilution. He confirmed that Canada Nickel anticipates producing and publishing more mineral resources from its properties, which could eventually position them among the world's robust nickel-sulphide resources.

RoyaltyCo Formation: Details and Future Implications

The specifics of the transaction are designed to be beneficial. Canada Nickel will assign a 1% NSR royalty interest on its exploration properties to RoyaltyCo. Following this, RoyaltyCo is set to merge with an EDCC subsidiary, facilitating access to the previously mentioned capital. To initiate the financial transaction, EDCC plans to raise $9 million through a mixture of common and preferred shares, a move that will cover the closing payments and provide funds for further corporate activities.

Furthermore, EDCC's position as a reporting issuer in major provinces such as Ontario, British Columbia, and Alberta simplifies the pathway for a future stock exchange listing—should they deem it beneficial for their shareholders.

Upon completion of this significant transaction, the governance of EDCC will also be structured to include a balanced representation: one director from the current board, two appointed by Canada Nickel, and two independent directors, maintaining governance integrity throughout the transition.

With expectations that the deal closes by April 30, 2025, the next steps hinge on completing several closing conditions, including securing necessary approvals from the TSX Venture Exchange. This careful orchestration of strategic moves underscores Canada Nickel's commitment to capitalizing on growth opportunities within its operational framework.

Canada Nickel's Vision for the Future

Canada Nickel’s mission is to position itself at the forefront of the nickel-sulphide industry, aligned with the rapidly expanding electric vehicle and stainless-steel markets. The company is actively developing projects designed for net zero carbon production. They are pushing the envelope by trademarking innovative terms like NetZero Nickel™, NetZero Cobalt™, and NetZero Iron™, ultimately aiming to lead in sustainable metal production.

Currently, Canada Nickel's flagship project, the Crawford Nickel-Cobalt Sulphide Project, occupies a prime location within the Timmins-Cochrane mining camp—an area renowned for its rich mineral deposits. The venture into RoyaltyCo is not merely a financial maneuver; it encompasses a larger strategic vision aimed at enabling Canada Nickel to play a pivotal role in meeting global nickel demands while maintaining environmental stewardship.

With a determined progression towards their goals, this initiative captures both immediate monetary benefits and long-term strategic advantages, setting Canada Nickel on a promising trajectory in the mining industry’s evolving landscape. As the company continues to unveil resources and innovate processes, stakeholders remain keenly anticipatory of the unfolding developments in coming months.