Flying Nickel Mining Corp. (TSXV: FLYN) (OTCQB: FLYNF) (“Flying Nickel”) and Nevada Vanadium Mining Corp. (formerly 1324825 B.C. Ltd.) (“Nevada Vanadium”) are pleased to announce that they have entered into a non-binding letter of agreement dated August 22, 2022 (the “LOA”) pursuant to which Flying Nickel proposes to acquire all of the issued and outstanding common shares of Nevada Vanadium (the “Nevada Vanadium Shares”) by way of a court-approved plan of arrangement (the “Transaction”).
Under the terms of the Transaction, Nevada Vanadium shareholders are expected to receive one (1) (the “Exchange Ratio”) Flying Nickel common share (a “Flying Nickel Share”) for each Nevada Vanadium Share held immediately prior to the effective time of the Transaction, representing the equivalent of $0.155 per Nevada Vanadium Share, based on the closing price of Flying Nickel Shares on the TSX Venture Exchange (the “TSXV”) on August 19, 2022. All convertible securities of Nevada Vanadium outstanding immediately prior to the effective time of the Transaction are also expected to be exchanged for securities of Flying Nickel bearing substantially the same terms as the securities replaced based on the Exchange Ratio.
Currently, Flying Nickel has 62 million shares outstanding, and Nevada Vanadium has 53 million shares outstanding. Upon completion of the Transaction, the combined company (the “Resulting Issuer”) will be owned approximately 54% by Flying Nickel shareholders and 46% by Nevada Vanadium shareholders The Resulting Issuer is expected to continue to be listed on the TSXV as a mining issuer.
John Lee, Chief Executive Officer of Flying Nickel stated “The Gibellini Vanadium project is an ideal complement to Flying Nickel’s Minago Nickel project. Nickel and vanadium are both key ingredients in batteries and classified as critical metals* by U.S. Geological Survey. Minago and Gibellini are both entering into the final environmental permitting stages and are located in mining friendly districts in North America. We believe the combined company will have one-of-a-kind mineral resource base and a dominant presence in the battery metals mining space.”
The implied equity value for Nevada Vanadium as of the date of the LOA based on the Exchange Ratio is approximately $8,485,200 based on the 20-day volume-weighted-average-price of Flying Nickel Shares on the TSXV as of close on August 19, 2022. Nevada Vanadium is a reporting issuer in each of the provinces and territories of Canada other than Quebec and the Nevada Vanadium Shares are not listed for trading on any stock exchange.
Nevada Vanadium’s Highlights:
Nevada Vanadium aims to become the first primary vanadium mine producer in the USA with its Gibellini vanadium project, a proposed open pit, heap leach project located at the Battle Mountain district in Nevada, United States.
On July 22, 2022, a Draft of Environmental Impact Statement (“EIS”) with respect to the Gibellini Vanadium project was published in the US Federal Register for a 45-day public comment period.
Transaction Structure
The Transaction is expected to be effected by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia) and will be subject to the approval of the shareholders of each of Nevada Vanadium and Flying Nickel, the TSXV and the Supreme Court of British Columbia.
The issuance of shares by Flying Nickel pursuant to the Transaction (“Share Issuance”) is subject to approval at a special meeting of Flying Nickel shareholders (the ” Flying Nickel Meeting”) by: (i) at least a majority of the votes cast on the resolution to approve the Share Issuance by the Flying Nickel shareholders present in person or represented by proxy and entitled to vote at the Flying Nickel Meeting; and (ii) at least a majority of the votes cast on the resolution to approve the Share Issuance by the minority Flying Nickel shareholders present in person or represented by proxy and entitled to vote at the Flying Nickel Meeting. The minority shareholders are defined by securities legislation and, among others, is expected to exclude the Flying Nickel Shares held by Battery Metals Royalties Corp. (“Battery Metals”).
The Transaction is subject to approval at a special meeting of Nevada Vanadium shareholders (the “Nevada Vanadium Meeting”) by: (i) at least 66 ?% of the votes cast on the resolution to approve the Transaction by Nevada Vanadium shareholders present in person or represented by proxy and entitled to vote at the Nevada Vanadium Meeting; and (ii) at least a majority of the votes cast on the resolution to approve the Transaction by the minority Nevada Vanadium shareholders present in person or represented by proxy and entitled to vote at the Nevada Vanadium Meeting. The minority shareholders are defined by securities legislation and, among others is expected to exclude the Nevada Vanadium Shares held by Battery Metals.
Battery Metals owns approximately 45.9% of the issued and outstanding Nevada Vanadium Shares and approximately 35.1% of the issued and outstanding Flying Nickel Shares, in each case on a non-diluted basis, and has also agreed to vote its Nevada Vanadium Shares and Flying Nickel Shares in favor of the Transaction.
Completion of the Transaction remains subject to customary conditions, including the signing of definitive agreements with respect thereto, fairness opinions to be provided to each board of directors, valuation report of Nevada Vanadium, and receipt of all necessary court and regulatory approvals. The LOA, and any definitive agreements executed in connection with the Transaction shall include customary representations and warranties of each party, non-solicitation covenants, “right-to-match” provisions, and a termination fee payable by either party in certain circumstances in the amount of $500,000 in the case of the LOA or $2,000,000 in the case of any definitive agreements in connection with the Transaction.
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