Royal Nickel (RNX-T) June 2nd '14 is pleased to announce it has signed a non-binding Letter of Intent with the primary selling shareholders of True North Nickel Inc. to acquire approximately 56% of True North, a private company whose main asset is a 100% interest in the West Raglan nickel sulphide project located in Quebec. "West Raglan will be an excellent addition to RNC's asset base as it provides additional exposure to a rapidly improving nickel market and strengthens RNC's position as a pure-play nickel vehicle on the TSX. The West Raglan Project is in an excellent mining jurisdiction and is one of only a few high grade sulphide nickel and PGM exploration targets in close proximity to existing mining operations," said Mark Selby, President and CEO of RNC.
Donald McInnes, Co-Chairman and CEO of True North Nickel, will join the RNC Board of Directors upon closing (pursuant to the right of RNC's Board to appoint a director following RNC's upcoming AGM) and Dr. Mark O'Dea, Co-Chairman of True North Nickel, will be appointed as a Special Advisor to the RNC Board. Both Donald McInnes and Mark O'Dea have proven track records of building significant value for shareholders. The acquisition of True North builds on the recent acquisition by RNC of a 25% strategic shareholding in Sudbury Platinum Corporation.
RNC has a Board and management team that was largely at the core of Inco Limited, an iconic Canadian-based integrated base metals company. With the acquisition of True North, RNC is positioning itself to become a platform to fill the void left in Canadian capital markets caused by the consolidation of the Canadian base metals sector over the last decade.
"We are truly excited at the prospect of joining the Royal Nickel team and actively support Royal Nickel's efforts to advance the Dumont project and to seek and acquire additional high grade sulphide nickel deposits worldwide," said Donald McInnes, Co-Chairman and CEO of True North. "With its skilled, knowledgeable team and high-quality assets, we believe there is a tremendous opportunity to transform Royal Nickel into a significant player in the nickel market."
Mr. McInnes has more than 20 years' experience in natural resource development including founding Kutcho Copper Corp. (formerly Western Keltic Mines Inc.) and Plutonic Power Corp., a renewable power development company with a broad portfolio of clean energy projects. Mr. McInnes is currently Vice-Chairman of Alterra Power Corp, Chairman of the Clean Energy Association of British Columbia, and a cofounder of Oxygen Capital Corp. He is a Director of Pilot Gold and True Gold Mining. Mr. McInnes is also a past President and Director of the AMEBC, and past Director of the PDAC and a past Governor of the Business Council of British Columbia.
Dr. O'Dea has created and led a family of strong, well-financed resource companies focused on the discovery and advancement of gold, copper, uranium and nickel projects around the world. He was co-founder and CEO, of both Fronteer Gold Inc. and Aurora Energy Resources Inc., which were sold to Newmont Mining Corp. and Paladin Energy Ltd. respectively in 2011. Dr. O'Dea is Founder of Oxygen Capital Corp. and plays leadership roles in all Oxygen companies. He is currently Co-founder and Chairman of Pilot Gold, Executive Chairman of True Gold Mining, and Director of Laurentian Goldfields.
The LOI provides that RNC's acquisition of an approximate 56% interest in True North is for a consideration of approximately 5.6 million RNC Common Shares representing a nominal value of approximately CDN$3.5 million and that existing True North options and warrants may be converted and replaced with RNC options and warrants. A condition of closing is that RNC shall acquire not less than a 50.1% interest in True North Nickel on a fully diluted basis. The parties are anticipating execution of definitive agreements on or about June 5, 2014.
West Raglan Project
West Raglan is a mature nickel sulphide exploration project located in the centre of the Cape Smith Nickel Belt in northern Quebec, Canada. The Cape Smith Belt is home to prolific, high-grade nickel sulphide deposits, including two producing mines; Glencore's Raglan Mine and Jilin Jien Nickel's Nunavik Mine. Over $50 million has been spent in exploration at West Raglan including the drilling of over 200 diamond drill holes. Seven zones of Ni-Cu-PGM sulphide have been found to date on the 700-square-kilometre West Raglan property. One of these zones, the Frontier Zone, includes five key high-grade lens clusters. True North's exploration model is based on the potential to build a resource out of the mineralized lenses at Frontier, exploring for additional lenses, and for new lens clusters across the other zones of the property. The neighbouring Raglan Mine hosts similar clusters of mineralized lenses in 12 distinct zones, four of which are currently in production and feeding a central mill facility.
The relative location of West Raglan to the Raglan and Nunavik mines is shown in figure 1 files.newswire.ca
The disclosure of the technical information contained in this news release has been approved by Alger St-Jean, P. Geo., Vice President Exploration of RNC, and a Qualified Person under NI 43-101. |
