Dual-listed Wallbridge Mining has entered into a definitive agreement with CSE-listed Archer Exploration through which Archer will acquire all Wallbridge’s nickel property, assets, rights and obligations, including the Grasset property, to create a publicly-traded nickel exploration and development company.

Archer is backed by Inventa Capital, a Vancouver-based merchant bank founded in 2017 with the goal of discovering and funding opportunities in the resource sector.

The nickel assets consist of 2 046 mining titles covering about 67 000 ha and include a 100% interest in the Grasset nickel sulphide project located in Quebec.

Wallbridge says it will continue to focus on its core Detour-Fenelon Gold Trend properties while enabling shareholders to participate in the potential economic upside in Archer.

Archer says that the transaction will establish the company as a leading Canadian nickel sulphide-focused exploration and development company with assets in the established mining jurisdictions of Quebec and Ontario.

Under the terms of the agreement, Wallbridge will receive an upfront consideration of C$53.6-million, consisting of 198.6-million common shares of Archer.

Archer will proceed with a private placement of securities to raise gross proceeds of not less than $10-million, to be completed on or before the closing of the transaction.

Under the terms of the transaction, Wallbridge has agreed to make a distribution of Archer shares to Wallbridge shareholders within 60 days of closing, such that following the distribution, Wallbridge would retain a 19.9% basic ownership interest in Archer, after giving effect to, among other things, the financing.

Moreover, Archer will grant Wallbridge a royalty equal to 2% of net smelter returns less the amount of any pre-existing royalties on encumbered portions of the Grasset property.

In certain circumstances, Wallbridge will be granted a right of first refusal to acquire any new royalties sold by Archer on the Grasset property.

Wallbridge will have the right to nominate two directors to Archer’s board of directors, with the current nominees being Wallbridge CEO Marz Kord, and Wallbridge CFO Brian Penny.

Wallbridge and Archer will also enter into an exploration cooperation agreement concerning the Grasset property in connection with closing.

The exploration agreement applies to the Grasset property but excludes those portions which include the mineral resource on such property.

Pursuant to the exploration agreement, Wallbridge will be granted the right to explore the Gold Cooperation Area for gold in certain circumstances.

If the results from either Wallbridge’s or Archer’s exploration work in the gold cooperation area establish a mineral resource that consists of primary gold mineralisation, then the parties will form a joint venture (JV) in which Archer will have a 30% interest and Wallbridge will have a 70% interest.

If the results from Wallbridge’s exploration work in the gold cooperation area establish a mineral resource that consists of primary mineralisation other than gold, then the parties will form a JV in which Archer will have a 70% interest and Wallbridge will have a 30% interest.

The purpose of any such JVs will be to explore, develop and operate such mineral resources. The exploration agreement has a term of five years and is subject to earlier termination in certain circumstances.

“Our core focus remains on the exploration and development of our 100%-owned Fenelon Gold property, located on the highly prospective Detour-Fenelon Gold Trend in Northern Abitibi, Quebec, where we are currently in the midst of a major drilling campaign to expand the multimillion-ounce resource that we have already identified.

“The opportunity to have our portfolio of noncore nickel assets acquired by a focused, publicly-traded nickel development and exploration company led by a world-class team unlocks the value of these assets and allows Wallbridge and its shareholders to benefit from their future development potential,” acclaims Kord.

“This is a transformational day for Archer. Our team has searched worldwide to identify and secure an attractive land portfolio that features an advanced nickel sulphide resource with apparent upside that is complemented by an exciting pipeline of high-impact nickel sulphide exploration targets.

“The Grasset deposit and the 23-km-long, target-rich regional package ticks these boxes. Then add to Grasset a giant land package in the world-class Sudbury mining camp and highly prospective greenfield projects in northern Quebec and NW Ontario and Archer becomes a leading Canadian nickel exploration and development company. This transaction is a direct result of an unrelenting, collaborative effort by both the Archer and Wallbridge teams towards unlocking the huge potential value of a best-in-class nickel portfolio during a period of unparalleled demand for green metals,” enthuses Archer interim CEO Keith Bodnarchuk.

The transaction is subject to certain closing conditions specified in the agreement, including completion of the financing and other customary closing conditions for a transaction of this nature, including receipt of approval by the CSE and other required regulatory approvals.

Closing of the transaction is expected to occur in the fourth quarter.