Noble Mineral firms up spinout of Crawford project

Nov 28, 2019

2019-11-28 09:50 ET – News Release

Mr. Vance White reports

NOBLE SIGNS IMPLEMENTATION AGREEMENT FOR CONSOLIDATION AND SPIN-OUT OF CRAWFORD NICKEL PROJECT TO CANADA NICKEL COMPANY INC. AND AGREEMENTS TO COMPLETE ROYALTY REDUCTION

Further to the letter of intent signed by Noble Mineral Exploration Inc., as announced on Oct. 1, 2019, the company has entered into the definitive agreement for that transaction on the same basis.

“This transaction will unlock significant value for Noble as we participate in advancement of the Crawford nickel sulphide project in a dedicated nickel company led by Mark Selby, a recognized leader in the global nickel industry, given his experience and network successfully advancing the Dumont nickel project,” commented Vance White, president and chief executive officer of Noble. “I look forward to future transactions utilizing our project generator model on the many nickel, copper-zinc VMS [volcanogenic massive sulphide] and gold targets on our strategic Project 81 land package.”

Transaction summary

The planned consolidation of the Crawford nickel sulphide project will be put into effect under the terms of an implementation agreement dated Nov. 14, 2019, that has been entered by Canada Nickel Company Inc., Noble, Mr. Selby (who is a principal of Canada Nickel), Spruce Ridge Resources Ltd. and certain private investors, based on the previous agreed terms in the binding letter of intent announced on Oct. 1, 2019.

The net result for Noble of the proposed transactions under the implementation agreement is:

Noble will receive $2-million in cash and 12 million shares of Canada Nickel (approximately 24 per cent of the pro forma outstanding shares of Canada Nickel) for the transfer of the project from Noble to Canada Nickel, and at a special shareholder meeting currently scheduled for Dec. 27, 2019, Noble will seek approval to distribute 10 million of those 12 million shares to its shareholders through a share exchange by plan of arrangement, with Noble retaining the other two million shares of Canada Nickel.
Noble will issue to Spruce Ridge a $1-million promissory note, repayable following completion of the arrangement, and 10 million common share units of Noble (each unit comprises one common share and one-half common share purchase warrant, with each full warrant being exercisable at 15 cents per share for three years).
Noble will receive two million common shares of Spruce Ridge (for a value of $90,000 when applying a value of 4.5 cents per share).
Noble will transfer the 907-hectare Crawford VMS assets to Spruce Ridge, subject to Noble retaining a back-in right to a 25-per-cent interest and to the right of Spruce Ridge to substitute other VMS properties in Crawford township, Ontario, of the same size.
Noble has received a commitment that will allow access to $1-million of financing from a convertible debt financing, should Noble be required to draw on that commitment in order to make the final payment of $1-million for Noble’s purchase of the 5-per-cent royalty currently applicable to approximately 55,000 hectares of patented properties in Project 81 (out of the total 79,000 hectares (approximately)).

Royalty transaction

As described in the implementation agreement, the transactions will facilitate the reduction of the current royalty on Project 81 from 5 per cent to 2 per cent.

As previously announced, Noble has entered into a royalty assignment agreement for the purchase of the current 5-per-cent royalty (see Noble’s news release dated Oct. 24, 2019). Noble has also entered into agreements with Franco-Nevada Corp., as holder of certain rights, including a right of first refusal, in respect of the 5-per-cent royalty. Pursuant to these agreements, the existing 5-per-cent royalty on approximately 55,000 hectares of patented properties in Project 81 (including the patented properties within the Crawford nickel sulphide project) will be acquired by Noble for payments of $2-million, in instalments, to the holder of the 5-per-cent royalty. The 5-per-cent royalty will be terminated and replaced by a 2-per-cent royalty payable to Franco-Nevada, and Noble will issue shares to Franco-Nevada having an agreed value of $500,000. The $2-million cash payment will be financed from the cash received by Noble from Canada Nickel and from the anticipated $1-million convertible debt financing. Closing of these transactions, including the issuance of shares, is expected to occur by mid-December.

Canada Nickel update

As of Nov. 28, 2019, Canada Nickel has raised $2.9-million under the $5-million non-brokered fully subscribed private placement described in Noble’s news release dated Oct. 1, 2019, and expects to complete the balance on or before the completion of the transactions.

Property consolidation, share distribution and Canada Nickel qualification as public entity

Subject to the receipt of regulatory and shareholder approval, it is expected that the consolidation of the Crawford nickel sulphide project will be completed early in January, 2020.

About Noble Mineral Exploration Inc.

Noble Mineral Exploration is a Canadian-based junior exploration company that, in addition to its shareholdings in Spruce Ridge Resources and MacDonald Mines Exploration Ltd., and its interest in the Holdsworth gold exploration property in the area of Wawa, Ont., holds in excess of 79,000 hectares of mineral rights in the Timmins-Cochrane areas of Northern Ontario known as Project 81.

We seek Safe Harbor.

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