Victory Nickel Announces Third Quarter 2015 Financial and

TORONTO, Nov. 12, 2015 (GLOBE NEWSWIRE) -- Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:NI, www.victorynickel.ca ) today reported financial results for the three- and nine-month periods ended September 30, 2015. Effective October 1, 2014, the Company changed its functional currency and presentation currency to the United States dollar ("US$") from the Canadian dollar ("C$"). All dollar amounts in this news release are in US$, unless otherwise noted. The Company reported a consolidated net loss of $1,599,000, or $0.03 per share, on sales revenue of $325,000 for the three months ended September 30, 2015. The selling price of frac sand dropped during the third quarter of 2015 necessitating a write down of inventory, to the lower of cost or net realizable value, in the amount of $378,000 plus an amount of $116,000 for obsolete inventory which is included in cost of sales. During the nine-month period ended September 30, 2015, the Company recorded a net loss of $2,776,000, or $0.05 per share, on revenues of $2,478,000. This compares with a net loss of $373,000, or $0.01 per share, and a net loss of $2,512,000, or $0.04 per share, on revenues of $5,463,000 and $6,773,000 in the first three and nine month periods respectively of 2014 during which the Company was in the pre-operating stage at the 500,000 ton per year ("tpy")-capacity rated frac sand plant in Alberta (the "7P Plant"). The material drop in the price of oil over the past year has resulted in oil and gas exploration and production companies significantly decreasing their activities in our market area. After coming to a full stop in the first quarter of 2015, frac sales resumed in May, 2015. During the third quarter of 2015 sales totalled 2,829 tons of frac sand, compared with 34,892 tons for the same period of 2014. Revenue per ton of frac sand in the third quarter of 2015 was 24% lower than in the corresponding period during 2014 at $114.88, resulting in a negative gross margin of $563,000 after an inventory writedown of $494,000. This compares with revenue per ton of frac sand of $149.98 in the third quarter of 2014. Commissioning of the 7P plant was completed during the third quarter of 2014. 2015 Outlook With a significant inventory of premium-quality Northern White Wisconsin frac sand at various stages of completion at the 7P Plant, Victory Nickel is well-positioned to meet customers' needs when frac sand demand returns. The slowdown is also presenting opportunities and Victory Silica's management is actively pursuing these opportunities which should make the Company more competitive in the future. A significant portion of staff and management salaries and director's fees currently due are being deferred or eliminated until the demand for frac sand returns. The 7P Plant is operating with a skeleton crew as required. In addition, there will be no discretionary expenditures. To this end we thank our employees, many suppliers and our lenders who are showing patience. On July 1, 2015, the Company announced that it was not able to make the quarterly interest payment due June 30, 2015 on the securities purchase and line of credit agreement (the "SPA Loan") and on the unsecured promissory convertible notes (the "Promissory Convertible Notes"), and that it was in discussion with its lenders and other potential financiers to restructure the Company's debt and recapitalize the Company. On July 30, 2015, the Company announced it had not repaid the principal amounts due under the SPA Loan. On September 30, 2015 the Company was unable to make the quarterly interest payments on the SPA Loan and the Promissory Convertible Notes due then. On November 11, 2015, the Company was unable to repay a $2,000,000 Promissory Convertible Note; the balance of these Promissory Convertible Notes totalling approximately $4,000,000 mature at various times between now and July 2016. All of these notes are included in current liabilities at September 30, 2015. The Company is continuing with discussions among the holder of the SPA Loan, holders of the Promissory Convertible Notes, other creditors and other potential financing sources to restructure the Company's debt and recapitalize the Company. To date, the Company has not received acceptable terms and has not completed any debt restructuring. Without an injection of capital until the demand for frac sand returns to allow the Company to sell its inventory, the Company will not be able to meet its outstanding obligations or any new obligations as they become due. There can be no assurance that the Company will be able to restructure its debt and/or recapitalize and there is no certainty as to what steps the lenders may take in light of these defaults. Executive Appointment The Company is pleased to announce the appointment of Steven Cresswell as Chief Financial Officer, effective November 13, 2015. Prior to his appointment, René Galipeau, Vice-Chairman and CEO, was the Acting CFO of the Company. Mr. Cresswell is a CPA,GGA who for the past 20 years has served in a variety of financial capacities with Canadian and international companies primarily in the natural resources sector. Over the past several years he has consulted to companies in the mining and solar power industries. Between 2011 and 2013 he was CFO for nickel producer First Nickel Inc., and previously was CFO of Tiberon Minerals PTE, a Singaporean resource company which was constructing a US$400+ million tungsten/fluorspar mine in Northern Vietnam. "Steve brings a variety of financial experience with both operating companies and mine developers which will be extremely valuable as Victory Nickel moves forward, and we are very pleased he has joined the management group," said Mr. Galipeau." About Frac Sand Frac sand is a proppant used in the oil and gas business as a part of the hydraulic fracturing process – a means of increasing flow to the wellhead. Frac sand must have particular characteristics including achieving certain levels of crush resistance, sphericity and roundness, and it is therefore a relatively rare commodity. About Victory Nickel Victory Nickel Inc. is a Canadian company with four sulphide nickel deposits containing significant NI 43-101-compliant nickel resources and a significant frac sand resource at its Minago project. Victory Nickel is focused on becoming a mid-tier nickel producer by developing its existing properties, Minago, Mel and Lynn Lake in Manitoba, and Lac Rocher in northwestern Québec, and by evaluating opportunities to expand its nickel asset base. Through a wholly-owned subsidiary, Victory Silica Ltd., Victory Nickel is establishing a presence in the frac sand market prior to commencing frac sand production and sales from Minago. About Victory Silica Victory Silica is a wholly-owned subsidiary of Victory Nickel and is charged with a phased plan to establish the Company in the frac sand market. In Phase One, the Company constructed a 500,000 tpy-rated dry processing plant and has begun processing and selling sand imported from Wisconsin. The 7P Plant is well located in an area populated with fracking companies, its potential customers, and is within only a few hours' trucking distance of major oil or gas play well sites. Phase Two, which includes the construction of a concentrator, also known as a "wet plant," in Wisconsin, is expected to reduce costs and ensure security of sand supply through the control of a frac sand mine in Wisconsin. In Phase Three, the Company intends to construct a larger frac sand plant to process and distribute both imported and domestic sand, which may potentially, but not necessarily, include sand mined as a co-product of development at the Company's Minago project. The Company has already identified a site in Manitoba for this purpose. Contact: Victory Nickel Inc. CHF Investor Relations René Galipeau or Sean Stokes Cathy Hume Phone: 416.363.8527 Phone: 416.868.1079 ext. 231 Fax: 416.626.0890 Fax: 416.868.6198 Email: admin@victorynickel.ca Email: cathy@chfir.com Please visit the Company's website at www.victorynickel.ca . Should you wish to receive Company news via email, please email cathy@chfir.com and specify "Victory Nickel" in the subject line. Forward-Looking Information: This news release contains certain forward-looking information. All information, other than information regarding historic fact that addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future is forward-looking information. Forward-looking information contained in this news release includes, but is not limited to, the ability of the Company to restructure its debt with the relevant lenders and the ability of the Company to pay future interest and other payments in connection with such debts. The forward-looking information contained in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. With respect to the forward-looking information contained in this news release, the Company has made assumptions regarding, among other things, the ability of the Company to restructure its debts. The forward-looking information contained in this news release is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including an unwillingness of the Company's lenders to refinance the Company's debts on terms favourable to the Company or at all and the ability of the Company to continue selling frac sand. Additionally, if the Company is unable to restructure its debts, obtain additional financing and/or continue generating revenue through the sale of frac sand, the Company may be required to curtail activities and/or liquidate its assets or the Company's creditors may seek to seize its assets. Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable law, the Company disclaims any obligation to update or modify such forward-looking information, either because of new information, future events or for any other reason. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.