Mr. Keith Morrison reports

PREMIUM NICKEL RESOURCES LTD. ANNOUNCES FINANCING TRANSACTIONS TOTALLING APPROXIMATELY CAD$34 MILLION

Premium Nickel Resources Ltd. has arranged a financing with Cymbria Corp. (CYB), EdgePoint Investment Group Inc. and certain entities managed by it for aggregate gross proceeds to Premium Nickel of $33,999,200. The financing will include three concurrent and interconditional transactions.

Equity financing

Premium Nickel and Cymbria have entered into a binding term sheet dated June 12, 2023, providing for the issue and sale of 14,772,000 units at a subscription price of $1.10 per unit for aggregate gross proceeds to Premium Nickel of $16,249,200. Each unit will comprise one common share of Premium Nickel and 22.5 per cent of one whole common share purchase warrant. The total whole number of transferable warrants issuable in the equity financing is 3,324,000. Each transferable warrant may be exercisable by the holder thereof to purchase one common share at an exercise price of $1.4375 per common share for a period of three years. The transferrable warrants will be freely transferable upon issuance thereof, subject to the restrictions on transfer pursuant to applicable securities laws and the policies of the TSX Venture Exchange.

The issue price represents a premium of approximately 9.5 per cent to the volume-weighted average trading price of the common shares of the company on the TSX-V over the past 20 trading days. The closing price of the common shares on the TSX-V on June 12, 2023, was $1.15.

Term loan

Premium Nickel and Cymbria (the lender), an affiliate of EdgePoint, have also entered into a binding commitment letter dated June 12, 2023, pursuant to which the lender has agreed to advance to Premium Nickel on closing $15-million for a three-year term. The term loan will bear interest at a rate of 10 per cent per annum payable quarterly in arrears. The principal amount of the term loan will mature and be payable on the third anniversary of the date of issue. The obligations of the company pursuant to the term loan will be fully and unconditionally guaranteed by each of the company's existing and future subsidiaries. The term loan will be subject to certain covenants and provisions on events of default, repayments and mandatory prepayments that are customary for a loan of this nature and secured by a pledge of all the shares of the company's subsidiaries and other security customary for a loan of this nature. In connection with the term loan, the company has agreed to issue an aggregate of two million non-transferable common share purchase warrants to the lender. Each non-transferable warrant shall be excisable by the lender to purchase one common share upon payment of the cash purchase price of $1.4375 per common share for a period of three years from the issuance thereof.

Option payment

Concurrently with the closings of the equity financing and the term loan, Cymbria has also agreed to pay an aggregate of $2.75-million to two subsidiaries of Premium Nickel to acquire a right to participate with such subsidiaries in the exercise of certain contractual rights, as and when the same may be exercised by such subsidiaries. The option payment will be allocated by the Premium Nickel subsidiaries having regard to the relative purchase prices payable in connection with the exercise of their respective contractual rights.

Premium Nickel's indirect wholly owned subsidiary Premium Nickel Resources Pty. Ltd. (PNRP) acquired the Selebi mine in January, 2022, out of liquidation. Pursuant to the acquisition agreement, the liquidator retained a 2-per-cent net smelter return royalty on the Selebi mine. PNRP has a contractual right to repurchase one-half of the Selebi NSR at a future time on payment by PNRP to the liquidator of $20-million (U.S.).

Premium Nickel's indirect wholly owned subsidiary Premium Nickel Group Pty. Ltd. (PNGP) acquired the Selkirk mine in August, 2022, out of liquidation. Pursuant to the acquisition agreement, the liquidator retained a 1-per-cent net smelter return royalty on the Selkirk mine. PNGP has a contractual right to repurchase the entirety of the Selkirk NSR at a future time on payment by PNGP to the liquidator of $2-million (U.S.).

Each of PNRP and PNGP has agreed to grant to Cymbria, in exchange for the option payment, an option to participate in any such repurchase of the applicable portion of its NSR from the relevant liquidator. Cymbria will, following the exercise of its option to participate in any such repurchase, acquire a 0.5-per-cent net smelter return royalty on the applicable property by paying an amount equal to (x) one-half of the repurchase price payable by PNRP or PNGP pursuant to the applicable NSR, less (y) the option payment paid at closing pursuant to the relevant option agreement among Cymbria and PNRP or PNGP, as applicable. Cymbria has the right to put its options back to PNRP and PNGP in certain circumstances in return for the reimbursement of the applicable portion of the option payment.

Closing

Closing of the financing transactions will occur simultaneously, on or before June 28, 2023, or such later date as may be agreed by the parties, subject in each case to customary closing conditions, including receipt of all necessary approvals, including the approval of the TSX-V and the approval of the Minister of Mines and Energy in Botswana in relation to certain of the security, and no material adverse change in the business of Premium Nickel having occurred between signing and closing. Closing of the financing transactions is interconditional. If Premium Nickel fails to satisfy the conditions precedent to closing of any one of the financing transactions it does not expect to complete any of the financing transactions.

Use of proceeds

The company intends to use approximately $7.36-million of the proceeds from the financing transactions to prepay all principal and interest owing by the company under its currently outstanding promissory note in favour of Pinnacle Island LP. The balance of the net proceeds of the financing transactions will be used to advance exploration and resource development at Premium Nickel's Selebi and Selkirk nickel, copper, cobalt, platinum group elements sulphide mines in Botswana, including the acquisition of adjacent mineral and property rights as appropriate, and for general corporate purposes.

Through a combination of resource drilling and continued exploration drilling at both the Selebi and Selkirk mines, Premium Nickel is working to establish a maiden mineral resource estimate prepared in accordance with National Instrument 43-101. The company is committed to redeveloping the mines through modernization and implementation of mining best practices to improve mine safety and efficiency, reduce power consumption, adopt alternative energy sources, and minimize water usage. Premium Nickel expects that the rehabilitation of the mines on this basis will actively contribute to Botswana's economic, social, climate and environmental objectives. These mines, once they are brought back into production, are expected to be a significant source of critical minerals for aerospace, decarbonization technologies and general industrial uses, in particular, during what is forecast to be a period of significant supply shortage at a critical time in the global renewable electrification transition.

Premium Nickel chief executive officer Keith Morrison commented: "I would like to welcome the EdgePoint team to PNRL and thank Pinnacle Island for their long-term support. This debt refinancing pursuant to the term loan will extend our current debt maturity for three years until June, 2026. The total funding resulting to PNRL pursuant to the financing transactions of approximately $34-million will provide us with the resources to advance both the National Instrument 43-101 -- Standards of Disclosure for Mineral Projects resource compliance and additional exploration drilling at the Selebi and Selkirk mines."

General

All securities issued in connection with the financing transactions will be subject to a hold period of four months plus a day from the date of issuance and the resale rules of applicable securities legislation and policies of the TSX-V.

Fort Capital Partners acted as financial adviser to Premium Nickel on the financing transactions.

About Premium Nickel Resources Ltd.

Premium Nickel is a mineral exploration and development company that focuses on discovering and advancing high-quality nickel, copper and cobalt resources. It is driven by its belief that the demand for these metals will continue to grow in the medium to long term, as a result of global urbanization and the increasing adoption of electric motors over internal combustion engines. These metals are vital for achieving a low-carbon future.

Premium Nickel's global strategy is to identify the most promising Ni-Cu-Co-PGE projects and acquire or invest in opportunities that offer high prospectivity in mining-friendly jurisdictions located in low-risk countries with supportive foreign investment and resource acts and strong rule of law. The company's portfolio includes various projects (Botswana, Greenland, Canada and Morocco) that complement its flagship Selebi Ni-Cu-Co sulphide mine located in Selebi-Phikwe, Botswana.

Premium Nickel is committed to governance through transparent accountability and open communication within its team and its stakeholders. The company's skilled team has worked over 100 projects collectively, accumulating over 400 years of resource discoveries, mine development and mine re-engineering experience on projects like Selebi and Selkirk. Premium Nickel's team members have on average more than 20 years of experience in every single aspect of mine discovery and development, from geology to operations.

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