On March 1, 2024, RAB Capital completed the sale of a 100% interest in RFN Holdings Limited – the holder of an 80% stake in Homeland Nickel Corporation – to Spruce Ridge Resources Ltd. ("Spruce Ridge" or the "Company"). Homeland Nickel Corporation controls the Cleopatra and Red Flat nickel laterite deposits in southwest Oregon, US (the “Properties”).
The following consideration was paid by Spruce Ridge in connection with the transaction:
- A $50,000 cash payment to RAB Capital;
- Transfer of 2,000,000 common shares in the capital of Canada Nickel Company Inc. held by Spruce Ridge to RAB Capital;
- Payment of $450,000, which was settled against RAB Capital’s subscription for an aggregate $450,000 in the non-brokered financing closed on December 21, 2023 (further described in the Company’s news release of December 21, 2023);
- Issuing an aggregate of 10,000,000 common shares in the capital of Spruce Ridge, such shares being subject to a four month and one day statutory hold period to RAB Capital;
- Granting a 2.0% net smelter returns ("NSR") on the Properties and some secondary nickel laterite deposits, with an option to repurchase 50% of each NSR for $2,000,000 to RAB Capital;
- Reimbursement of a total of US$37,957 for the cost of tenement renewals on the Properties paid for the year 2023/24 and a total of US$22,500 for the cost of preparation of audited financial statements to RAB Capital;
- Assuming a pre-existing intercorporate loan between RAB Capital and HLN totaling approximately US$36.74 million;
- Agreeing to pay funds to RAB Capital upon reaching certain milestones, as follows:
- $1,000,000 cash payment upon filing a technical report on one or both of the Properties where a nickel resource is re-evaluated (or restated) to a standard in accordance with the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Properties (NI 43-101”);
- $2,000,000 cash payment upon completion of a NI 43-101 preliminary economic assessment on one or both of the Properties;
- $2,000,000 cash payment upon completion of a NI 43-101 feasibility study on one or both of the Properties; and
- $10,000,000 cash payment upon announcement of a decision to commence construction on one or both of the Properties.
Fasken advised RAB Capital in connection with this transaction with a team led by John Sabetti, including Sarah Martin and Mitchell Thaw (Tax Law).
Jurisdiction
- Ontario
