(All amounts expressed in U.S. dollars unless otherwise indicated)
TORONTO, May 9, 2013 /CNW/ - Royal Nickel Corporation ("RNC") (TSX: RNX) is pleased to announce that
it has signed a royalty purchase agreement with RK Mine Finance ("Red
Kite"). Under the terms of the agreement, Red Kite will acquire a 1%
Net Smelter Return ("NSR") Royalty in the Dumont Nickel Project for a
purchase price of $15 million.
"This commitment by Red Kite is a significant endorsement of the Dumont
project by a recognized global mine finance firm. This royalty sale
provides an attractive form of financing, particularly in current
capital market conditions. The additional capital will allow us to
continue to aggressively advance the project once the feasibility study
is completed by mid-year. We look forward to working further with Red
Kite as we advance the project," said Tyler Mitchelson, President and
CEO of RNC.
Pursuant to the agreement between RNC and Red Kite, on closing RNC will
receive $15 million and Red Kite will be entitled to receive 1% of the
net smelter return from the sale of minerals produced from the Dumont
Nickel Project. Closing is expected to occur on May 10, 2013.
RNC's Dumont project contains the third largest nickel reserve in the
world1 and is expected to be among the largest 5 nickel sulphide operations in
the world. RNC is on track to release the results of a feasibility
study for the Dumont project by mid-2013 and the permitting process is
well underway with necessary permits expected to be received by the
second quarter of 2014.
In May 2012, RNC announced the results of a revised pre-feasibility
study2 for Dumont which demonstrated an after-tax NPV8% of $1.4 billion and after-tax internal rate of return of 19.5%3. Over the 31-year project life, C1 cash costs are estimated to be $4.07
per pound4 with average annual nickel production of 91 million pounds (108 million
pounds annually over the 19 year mine life).
About Red Kite
RK Mine Finance specializes in providing development, acquisition and
bridge financing to miners of precious and non-ferrous metals.
RK Mine Finance is part of the Red Kite Group, one of the largest metal
merchants in the world. The Group has over $3.5 billion under
management (as of April 30, 2013), with $1.7 billion dedicated
exclusively to the mine finance business.
Red Kite provides mining companies with project financing and metal
off-take agreements for initiation or expansion of mine production. Red
Kite operates across the global metals industry from offices in
Bermuda, Denver, Hong Kong, London, New York, Shanghai and Sydney.
Investors in Red Kite funds include college endowments, foundations,
family offices, pension funds and other institutional investors. For
more information about Red Kite please visit www.rkminefinance.com.
About Royal Nickel Corporation
Royal Nickel Corporation is a mineral resource company focused primarily
on the exploration, evaluation, development and acquisition of base
metal and platinum group metal properties. RNC's principal asset is the
Dumont Nickel Project strategically located in the established Abitibi
mining camp, 25 kilometres northwest of Amos, Quebec. RNC has a strong
management team and Board with over 100 years of mining experience in
the nickel business at Inco and Falconbridge. RNC's common shares trade
on the TSX under the symbol RNX.
Unless otherwise indicated, RNC has prepared the technical information
in this news release ("Technical Information") based on information
contained in the pre-feasibility study dated June 22, 2012, relating to
the Company's Dumont Nickel Project and news releases (collectively the
"Disclosure Documents") available under RNC's company profile on SEDAR
at www.sedar.com. Each Disclosure Document was prepared by or under the supervision of a
qualified person (a "Qualified Person") as defined in National
Instrument 43-101 of the Canadian Securities Administrators. Readers
are encouraged to review the full text of the Disclosure Documents
which qualifies the Technical Information. The Technical Information is
subject to the assumptions and qualifications contained in the
Disclosure Documents. The Technical Information contained in this news
release has been approved by Alger St-Jean, P. Geo., Vice President
Exploration of RNC and Johnna Muinonen, Vice President Operations of
RNC, both Qualified Persons under NI 43-101.
Nickel reserve reported in NI 43-101 compliant technical report dated
June 22, 2012 available on RNC's website and under RNC's profile on
SEDAR at www.sedar.com compared to nickel reserves reported in company reports and in Wood
Full NI 43-101 compliant technical report dated June 22, 2012 available
on RNC's website and under RNC's profile on SEDAR at www.sedar.com.
Based on US$9.00 per pound long term nickel price and CDN$1.00 = US$0.90
exchange rate. NPV calculated from assumed start of construction,
January 2014 and based on October 2011 real costs.
C1 cash costs are defined as the cash cost incurred at each processing
stage, from mining through to recoverable nickel delivered to the
market, net of by-product credits
Cautionary Statement Concerning Forward-Looking Statements
This news release contains "forward-looking information" including
without limitation statements relating to the expected completion of
the Red Kite financing, delivery of a full feasibility study, advancing
the Dumont project and the expectation that the Dumont project will be
among the largest 5 nickel sulphide operations in the world. Readers
should not place undue reliance on forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Corporation to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Completion of
the Red Kite financing is subject to closing conditions set out in the
agreement. The pre-feasibility study results are estimates only, are
preliminary in nature and are based on a number of assumptions, any of
which, if incorrect, could materially change the projected outcome.
Until a positive feasibility study has been completed, and even with
the completion of a positive feasibility study, there are no assurances
that Dumont will be placed into production. Factors that could affect
the outcome include, among others: the actual results of development
activities; project delays; inability to raise the funds necessary to
complete development; general business, economic, competitive,
political and social uncertainties; future prices of metals;
availability of alternative nickel sources or substitutes; actual
nickel recovery; conclusions of economic evaluations; changes in
project parameters as plans continue to be refined; accidents, labour
disputes and other risks of the mining industry; political instability,
terrorism, insurrection or war; delays in obtaining governmental
approvals, necessary permitting or in the completion of development or
construction activities. For a more detailed discussion of such risks
and other factors that could cause actual results to differ materially
from those expressed or implied by such forward-looking statements,
refer to RNC's filings with Canadian securities regulators available on
SEDAR at www.sedar.com.
Although the Corporation has attempted to identify important factors
that could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be other
factors that cause actions, events or results to differ from those
anticipated, estimated or intended. Forward-looking statements
contained herein are made as of the date of this news release and the
Corporation disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events or
results or otherwise, except as required by applicable securities laws.
SOURCE: Royal Nickel Corporation
For further information:
Director, Investor Relations
T: (416) 363-0649
Mélanie Corriveau (French contact)
Community Relations Coordinator
Tél. : (819) 727-3777