Kenorland Minerals (KLD.V) has entered into an agreement to sell its South Thompson nickel project in Manitoba to Evolution Nickel. Evolution will issue 26 million shares to Kenorland in return for the purchase, while Kenorland will also retain a 2% NSR on the asset. The closing of the sale is conditional upon Evolution Nickel completing a C$4M financing. As far as we know, Evolution Nickel isn’t marketing this placement yet, and we expect the company to kick off its capital raise efforts after the summer. The anticipated capital raise price will provide us with a good number to value the 26 million shares at (although we anticipate Kenorland’s shares to be subject to a lock-up period).
Kenorland will also remain the operator on the project, and the company will likely earn the standard 7.5-10% operator fee on the qualifying exploration expenditures, providing additional cash inflow to cover its other expenditures.
Disclosure: The author has a long position in Kenorland Minerals. Please read the disclaimer.
