First Atlantic Nickel Secures $1M Through Charity Flow-Through
First Atlantic Nickel Closes $1M Charity Financing
First Atlantic Nickel Corp. (TSXV: FAN) (OTCQB: FANCF) (FSE: P21) has successfully concluded a non-brokered private placement financing, raising a substantial C$1,073,198 through the issuance of 2,190,200 common shares on a charity flow-through basis. These Charity FT Shares were priced at C$0.49 each, representing a remarkable premium of 122% over the effective purchase price of C$0.32 paid by a strategic investor.
Details of the Financing
This charity flow-through financing structure under the Canadian Income Tax Act allows eligible investors to support a registered charity while also benefiting from tax advantages. This unique approach helps First Atlantic Nickel generate funds at a premium to the current market prices, assisting the company in its efforts to advance its exploration activities.
In alignment with this offering, a strategic investor exercised top-up rights under an Investor Rights Agreement. This agreement ensures that the investor can maintain an ownership interest of up to 9.99%. Notably, no warrants were issued in connection with this financing, and the company incurs no additional commissions or finder's fees.
Use of Proceeds
The proceeds from this financing are earmarked primarily for the ongoing Phase 2 drilling and exploration program at the company’s Atlantic Nickel Project, located in Central Newfoundland. This essential program will significantly contribute to the project’s development, enhancing its potential within North America’s critical minerals supply chain.
Charity Flow-Through Shares and Their Advantages
Each Charity FT Share was issued as a flow-through share under Canada’s Income Tax Act. The funds raised will help cover eligible resource exploration expenses that qualify under the Act as “Canadian exploration expenses” and “flow-through critical mineral mining expenditures.” To ensure compliance, First Atlantic Nickel plans to incur qualifying expenditures equal to or greater than the gross proceeds from this issuance by the specified deadline.
Importance of Awaruite in Nickel Supply
Awaruite is a naturally occurring nickel-iron alloy that comprises approximately 75% nickel. This mineral offers a cleaner, more efficient processing route compared to conventional nickel sources. As North America looks to enhance its critical minerals supply chain, the importance of awaruite cannot be overstated, particularly concerning electric vehicles and stainless steel production.
The U.S. inflation reduction act mandates that from 2025, eligible clean vehicles must not contain critical minerals processed by foreign entities of concern, primarily focusing on reducing reliance on traditional nickel refining, largely dominated by countries like China.
Investor Relations Agreement Renewal
In addition to the financing news, First Atlantic is pleased to announce the renewal of its investor relations agreement with Xander Capital Partners Inc. for another 12-month term. Beginning April 1, this renewed agreement will continue to provide First Atlantic with essential market consulting services to bolster brand awareness and facilitate introductions to strategic partners.
Under this agreement, Xander will receive a monthly fee of USD $10,000, reflecting the ongoing commitment to ensuring efficient communication and engagement with the investor community.
Market Context and Future Projections
First Atlantic Nickel is strategically positioned to play a crucial role in the North American nickel market, especially as demand rises for sustainably sourced critical minerals. With initiatives to advance exploration and innovative resource processing methodologies, the company aims to be at the forefront of providing reliable supplies to meet the region's growing needs.
The renewal of its investor relations agreement demonstrates the company's proactive approach to maintaining investor confidence and transparency during these evolving market conditions.
Frequently Asked Questions
What is the purpose of the charity flow-through financing?
The financing aims to raise funds for exploration and drilling projects, allowing the company to leverage unique tax benefits through the issuance of Charity FT Shares.
How is the raised capital planned to be utilized?
The proceeds will primarily support the Phase 2 drilling and exploration program at the Atlantic Nickel Project in Newfoundland.
What advantages does awaruite provide for nickel supply?
Awaruite offers a more environmentally friendly processing route than traditional nickel sources, reducing reliance on foreign refining operations.
What is First Atlantic’s stance on investor communication?
First Atlantic is committed to clear and continuous communication with investors, as reflected in its renewed relationship with Xander Capital Partners for investor relations services.
When will the new regulations on critical minerals take effect?
The U.S. Inflation Reduction Act mandates that new regulations for critical minerals will commence in 2025.
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