Diversified miner Anglo American has agreed to acquire a 9.9% minority interest in Canada Nickel Company, which owns the Crawford nickel project in Ontario, Canada.

The major will make a C$24-million investment in Canada Nickel at a price of C$1.95 a common share - a 10% premium to the 30-day volume weighted average price.

Anglo will provide technology expertise to the Crawford project and has the exclusive right to buy up to 10% of recoveries of nickel concentrate, iron and chromium contained in the magnetite concentrates and any corresponding carbon credits from the Crawford project.

Anglo's equity funding will support Canada Nickel's work to complete the necessary permitting requirements to proceed with development of the project.  

The investment is part of Anglo's approach to expand its nickel product offering with additional battery-grade nickel for use in electric vehicles, complementing nickel production from its platinum group metals mines in South Africa, as well as ferronickel from its nickel assets in Brazil, which is mostly destined for the global stainless steel industry.

"As a responsible provider of future-enabling metals and minerals to our customers, we are committed to supporting our industry in increasing the availability of critical materials that will underpin the success of the energy transition, and to do so sustainably," says Anglo marketing business head Peter Whitcutt.

Anglo will apply its FutureSmart Mining technologies to ore samples from Canada Nickel, with the aim of assessing opportunities to improve processing recoveries and reduce the project's overall energy, emission and water footprint.

"Our in-depth product knowledge and portfolio of innovative technologies have the potential to provide a value-enhancing contribution to the development of the Crawford project, with the objective of unlocking additional supply of nickel to meet the world's growing demand for battery technology for electric transport," says Whitcutt.

Located in a tier-one mining jurisdiction in Ontario, with optimal support infrastructure, the Crawford project is one of the biggest undeveloped, bulk tonnage nickel sulphide resources in the world. If brought into production, the project is expected to play an important role in expanding the available supply of battery-grade nickel.

“We are very pleased to welcome Anglo American, a leading global mining company, as a cornerstone investor in Canada Nickel. Today’s announcement is another key milestone as we advance Crawford towards production.” said Canada Nickel chairperson and CEO Mark Selby. "Our team is looking forward to working with Anglo American to identify opportunities to apply their industry leading mining innovation technology to add additional value to Crawford.”

The completion of the private placement and related offtake and technology agreements is subject to customary closing conditions, including the approval of the TSX-V and is targeted to close on or about February 28.

PRIVATE PLACEMENT
Meanwhile, Canada Nickel announced separately that it has an agreement with Scotiabank to act as lead underwriter and sole bookrunner to raise C$18.2-million in a bought-deal offering. The company will issue 7.46-million common shares of the company at a price of C$1.77 a share and 1.75-million common shares as "flow-through shares" at C$2.86 a flow-through share.

In addition, the nickel junior will provide Anglo with the right to concurrently subscribe for common shares in order to maintain a 9.9% interest, which the major would acquire on the closing of the subscription, for gross proceeds of C$1.8-million.