Canadian Royalties and Norilsk Nickel Sign Agreements for the Sale of Nickel Concentrates and an Equity Investment
Tuesday, October 2nd, 2007
Canadian Royalties Inc. and Norilsk Nickel Harjavalta Oy, a wholly owned subsidiary of MMC Norilsk Nickel, are pleased to announce the signing of several agreements aimed at expediting the development of CRI’s Nunavik Nickel Project. The agreements include a sales agreement for nickel concentrates, an immediate C$25 million share subscription, and an option for additional financing at a later date to ensure project completion.
Sales Agreement for Nickel Concentrates
Following an extensive bidding process, CRI has reached an agreement with Norilsk Nickel to sell nickel concentrates produced from its Nunavik Nickel Project to Norilsk Nickel. The terms of this agreement are considered by CRI’s management to be highly competitive with market rates.
Under the equity investment, Norilsk Nickel shall subscribe on a private placement basis for an aggregate of 7,246,377 common shares in the equity of CRI at a price of C$3.45 per common share for a total of C$25 million. The purchase price represents a 23% premium over the closing price of CRI’s securities on Friday, September 28, 2007. The subscription is subject to the approval of the Toronto Stock Exchange (the “TSX”). Under the agreement, CRI may request Norilsk Nickel to provide an additional C$25 million in financing on mutually agreed terms to ensure project completion.
Richard Faucher, President and CEO of CRI stated that “The successful conclusion of these agreements represents a major milestone for CRI. Forming this strategic partnership with Norilsk Nickel reduces several project risks, including risks related to the financing of the project. Another significant part of our considerations in favour of Norilsk Nickel has been access to their technical know-how which will support CRI to capture the tremendous resource potential of the Nunavik Nickel Project.”
Antti Aaltonen, Managing Director of Norilsk Nickel Finland Oy said “We are pleased to enter into this agreement with CRI. It is the culmination of a long period of cooperation and negotiation to bring the development of the Nunavik Nickel Project together with the assets and know-how of the Norilsk Nickel group. We look forward to working with the management of CRI on this exciting and important project.”