An anonymous director reports

NORTH AMERICAN NICKEL INC. ANNOUNCES BEST EFFORTS PRIVATE PLACEMENT OFFERING OF $5 MILLION OF SUBSCRIPTION RECEIPTS

North American Nickel Inc. has entered into an agreement with Paradigm Capital Inc. to act as lead agent and sole bookrunner, on behalf of a syndicate, on a best efforts basis, for a private placement offering of subscription receipts of the company for gross proceeds of $5-million at a price of 48 cents per subscription receipt.

Each subscription receipt shall be deemed to be automatically exercised, without payment of any additional consideration and without further action on the part of the holder thereof, into a resulting issuer share (as defined herein) on a one-for-one basis, upon satisfaction of the escrow release conditions (as defined herein), subject to adjustment in certain events.

The net proceeds from the offering shall be used to finance exploration and development, working capital, and for general corporate purposes.

The agent shall have the option to increase the size of the offering by up to 15 per cent of the base offering size, which agent's option shall be exercisable, by notice in writing to the company, at any time not less than 48 hours prior to the closing date.

The offering is expected to close on or about April 28, 2022, or such other date as the agent and the company may mutually agree, and is subject to certain conditions, including but not limited to, the receipt of all necessary approvals, including conditional approval from the TSX Venture Exchange. The securities issued pursuant to the offering will be subject to applicable hold periods, including the typical four-month period from closing date of the offering.

Proposed RTO transaction

The company has entered into a non-binding letter of intent with Premium Nickel Resources Corp. (PNR), to complete a going public transaction by way of a reverse takeover. The transaction will be completed by way of a triangular amalgamation involving PNR, the company and a wholly owned subsidiary of the company to create a combined entity under the laws of the Province of Ontario. The final structure of the transaction is subject to receipt of final tax, corporate and securities law advice by both the company and PNR.

Pursuant to the policies of the TSX-V, PNR is a non-arm's-length party of the company. The company currently holds approximately 9.8 per cent of the outstanding common shares of PNR on a basic, undiluted basis, and a warrant entitling the company to purchase an additional 15 per cent of the equity of PNR, on an undiluted basis, for $10-million (U.S.), until Feb. 26, 2025 (the 15-per-cent warrant).

In connection with the transaction, each common share of PNR outstanding immediately prior to the closing of the transaction, other than any common share of PNR held by the company, is expected to be exchanged for 5.27 common shares of the resulting issuer (before giving effect to any consolidation (as defined herein)) and the 15-per-cent warrant and the common shares of PNR held by the company will be extinguished. The final exchange ratio is subject to continuing due diligence.

In connection with the proposed transaction, the company is required to seek the requisite shareholder and regulatory approvals to change the name and stock ticker symbol of the resulting issuer as part of the transaction to such name and ticker symbol as may be requested by PNR, acting reasonably, and consolidate the common shares of the resulting issuer.

On the closing date (as defined herein), the gross proceeds of the offering, less 100 per cent of the expenses of the agent payable by the company pursuant to the terms of an agency agreement, to be entered into at closing between the company, PNR and the agent but including the cash commission, as hereinafter defined, will be delivered to and held by a licensed Canadian trust company or other escrow agent mutually acceptable to the agent and the company, and invested in an interest-bearing account pursuant to the terms and conditions of a subscription receipt agreement to be entered into on the closing date among the company, agent and the escrow agent. The escrowed funds will be held in escrow pending the earlier of (i) the satisfaction of the escrow release conditions (as defined herein) and (ii) the occurrence of a termination event (as defined herein).

If: (i) the escrow release conditions are not satisfied on or before 5 p.m. ET on that date which is 120 days following the closing date; or (ii) prior to the escrow release deadline, the company advises the agent or announces to the public that it does not intend to proceed with the transaction and/or satisfy the escrow release conditions, the escrowed funds (plus any interest accrued thereon) shall be returned to the holders of the subscription receipts on a pro rata basis and the subscription receipts will be cancelled without any further action on the part of the holders. To the extent that the escrowed funds are not sufficient to refund the aggregate issue price paid by the holders of the subscription receipts, the company shall be responsible and liable to contribute such amounts as are necessary to satisfy any shortfall.

For the purposes hereof, escrow release conditions shall mean:

1. The receipt of all required corporate, shareholder, regulatory and third party approvals, if any, required in connection with the offering and transaction;
2. The completion, satisfaction or waiver of all conditions precedent, undertakings and other matters to be satisfied, completed and otherwise met or prior to the completion of the transaction (other than delivery of standard closing documentation) have been satisfied or waived in accordance with the definitive agreement relating to the transaction, to the satisfaction of the agent acting reasonably (other than the release of the escrowed funds);
3. Written confirmation to the agent from each of the company and PNR that all conditions of the transaction have been satisfied or waived, other than release of the escrowed funds, and that the transaction shall be completed forthwith upon release of the escrowed funds;
4. The distribution of the resulting issuer shares following the satisfaction of the escrow release conditions being exempt from applicable Canadian prospectus and registration requirements of applicable securities laws and not subject to any hold or restricted period, as confirmed by a legal opinion from counsel to the company;
5. The resulting issuer shares being conditionally approved for listing on the TSX-V, and the completion, satisfaction or waiver of all conditions precedent to such listing, other than the release of the escrowed funds; The company and the agent having delivered a joint notice and direction to the escrow agent, confirming that the conditions set forth in (A) and (B) have been met or waived;
6. The company, PNR and the resulting issuer shall not be in breach or default of any of its covenants or obligations under the subscription receipts agreement or the agency agreement, except (in the case of the agency agreement only) for those breaches or defaults that have been waived by the agent and all conditions set out in the agency agreement shall have been fulfilled, which shall all be confirmed to be true in a certificate of a senior officer of each of the company and PNR.

About North American Nickel Corp.

North American Nickel is a mineral exploration company with 100-per-cent-owned properties in Maniitsoq, Greenland and Ontario, Canada. In 2019, North American Nickel became a founding shareholder in PNR to provide direct exposure to Ni-Cu-Co (nickel-copper-cobalt) opportunities in the southern African region. Simultaneously, North American Nickel is expanding its area of exploration interest into Morocco.

The Maniitsoq property in Greenland is a camp-scale permitted exploration project comprising 3,048 square kilometres covering numerous high-grade nickel-copper plus cobalt-sulphide occurrences associated with norite and other mafic-ultramafic intrusions of the Greenland Norite belt (GNB). The greater than 75-kilometre-long belt is situated along, and near, the southwest coast of Greenland and is accessible from the existing Seqi deepwater port with an all-year-round shipping season and hydroelectric power potential from a quantified watershed.

The Post Creek/Halcyon property in Sudbury is strategically located adjacent to the past-producing Podolsky copper-nickel-precious metal sulphide deposit of KGHM International Ltd. The property lies along the extension of the Whistle Offset dike structure. Such geological structures host major Ni-Cu-PGM deposits and producing mines within the Sudbury camp.

North American Nickel acquired 100-per-cent ownership of property near the southern extent of the Lingman Lake greenstone belt in Northwest Ontario known as Lingman nickel and in the Quetico region near Thunder Bay, Ont. The acquisition of these properties is part of North American Nickel's strategy to develop a pipeline of new nickel projects. North American Nickel is evaluating direct and indirect nickel asset acquisition opportunities globally.

We seek Safe Harbor.