Impact: Positive
Flying Nickel announced that it plans to sell its flagship Minago Ni project in the Thompson Ni Belt of Manitoba, to Norway House Cree Nation (NHCN). As part of the agreement, NHCN is expected to either: 1) pay C$7.3M cash and surrender 31M (35.2%) FLYN shares, or 2) pay C$8M cash and surrender 17.6M (19.9%) FLYN shares. NHCN owns 19.9% of FLYN’s shares, and, along with Sparta AG (DB:SPT6, Not Rated) and Blackstone Minerals Ltd. (ASX:BSX, Not Rated), these three shareholders own ~35.2%. These shareholders have now decided to support management in favour of its previously announced merger with Nevada Vanadium (NV merger), having previously expressed concerns about this merger. Although FLYN is expected to lose its flagship asset with this acquisition, we view this transaction positively as it values FLYN at ~C$0.11/sh, which represents a ~35-40% premium to its previous close. This transaction should provide more control to the rest of the shareholders along with the influx of cash. FLYN can channel this cash toward advancing the Gibellini vanadium project in Nevada, which it is acquiring as part of the NV merger.
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