Power Nickel Inc. (TSXV: PNPN) (OTCBB: PNPNF) (Frankfurt: IVV) announced that due to significant demand, it has decided to upsize its previously announced “best efforts” private placement offering (the “Offering”) by up to C$10 million, bringing the aggregate total proceeds of the Offering up to C$50 million. The Offering consists of (i) the previously announced C$40 million of Quebec flow-through shares (the “FT Shares”) and, (ii) up to C$10 million of non-flow through common shares (the “HD Shares” and together with the FT Shares, the “Offered Securities”). The price of the Offered Securities is C$2.83 for each FT Share and C$1.45 for each HD Share.
BMO Capital Markets and Hannam & Partners are acting as the joint bookrunners for the Offering, together with a syndicate of agents (the “Agents”).
Existing shareholders including Robert Friedland are participating in the upsize.
Use of Proceeds
As previously announced, the gross proceeds received by the Company from the sale of the FT Shares will be used to incur expenses described in paragraph (f) of the definition of “Canadian exploration expense” (“CEE”) in subsection 66.1(6) of the Income Tax Act (Canada) (the “Tax Act”) and paragraph (c) of the definition of CEE in section 395 of the Taxation Act (Québec) (the “QTA”), and will be renounced in favour of the relevant purchasers by no later than December 31, 2025, pursuant to the terms of the subscription and renunciation agreement to be entered into between the Company and such purchasers of FT Shares. Such expenses will also qualify as “flow-through critical mineral mining expenditures” as defined in subsection 127(9) of the Tax Act for the purposes of the federal tax credit described in paragraph (a.21) of the definition of “investment tax credit” in subsection 127(9) of the Tax Act.
For purchasers of FT Shares resident in the Province of Québec, 10% of the amount of the CEE will be eligible for inclusion in the deductible “exploration base relating to certain Québec exploration expenses” and 10% of the amount of the CEE will be eligible for inclusion in the deductible “exploration base relating to certain Québec surface mining exploration expenses” (as such terms are defined in sections 726.4.10 and 726.4.17.2 of the QTA, respectively, for the purposes of the deductions described in section 726.4.9 and 726.4.17.1 of the QTA), giving rise to an additional 20% deduction for Québec tax purposes.
In the event that the Company is unable to renounce CEE, effective on or prior to December 31, 2025, in favour of the purchasers of FT Shares in an aggregate amount not less than the gross proceeds raised from the issue of FT Shares, the Company will indemnify each purchaser of FT Shares for the additional taxes payable by such subscriber as a result of the Company’s failure to renounce the CEE as agreed.
The net proceeds received by the Company from the sale of HD Shares will be used for working capital and general corporate purposes.
Closing Details
The Offering is expected to close on or about February 27, 2025 and is subject to the Company receiving all necessary regulatory approvals, including the approval of the TSX Venture Exchange. The Offered Securities are subject to a hold period of four months and one day from the date of issuance.
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
Power Nickel is a market awareness client of Capital 10X. For more information, including potential conflicts of interest please see our Content Disclaimer.
