NexMetals Mining Corp 6-K, filed Jun 1, 2021
NexMetals Mining Corp. (NEXM)
About this 6-K
NexMetals Mining Corp filed this 6-K on June 1, 2021.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of May 2020
Commission File Number: 000-14740
North American Nickel Inc.
(Translation of registrant’s name into English)
c/o Bennett Jones LLP, 3400 — One First Canadian Place, P.O. Box 130, Toronto, Ontario M5X 1A4
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: [ ] Yes [X] No.
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): n/a
EXPLANATORY NOTE
North American Nickel Inc. on May 26, has distributed Exhibits 99.1 to 99.4 to the applicable Canadian securities regulators and to shareholders who requested same, to disseminate its interim financial statements and related materials for the quarter ended Mach 31, 2021.
The disclosure documents can be viewed on the Canadian reporting issuer disclosure website www.sedar.com
| 2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| North American Nickel Inc. | ||
| (Registrant) | ||
| Date: June 1, 2021 | By | /s/ Sarah-Wenjia Zhu |
| Name: | Sarah-Wenjia Zhu | |
| Title: | Chief Financial Officer | |
| 3 |
Exhibit Index
| Exhibit No. | Description | |
| 99.1 | Q1 2021 Financial Statements | |
| 99.2 | Q1 2021 Management Discussion & Analysis as at May 26, 2021 | |
| 99.3 | CEO certification Q1 2021 | |
| 99.4 | CFO certification Q1 2021 |
| 4 |
CONDENSED INTERIM Consolidated Financial Statements
For the quarter ended March 31, 2021
(In accordance with International Financial Reporting Standards (“IFRS”) and stated in thousands of Canadian dollars, unless otherwise indicated)
INDEX
Notice to Reader of the Unaudited Condensed Interim Consolidated Statements
Condensed Interim Consolidated Financial Statements
| ■ | Condensed Interim Consolidated Statements of Financial Position | |
| ■ | Condensed Interim Consolidated Statements of Comprehensive Loss | |
| ■ | Condensed Interim Consolidated Statements of Changes in Equity | |
| ■ | Condensed Interim Consolidated Statements of Cash Flows | |
| ■ | Notes to the Condensed Interim Consolidated Financial Statements |
Notice to reader of the unaudited CONDENSED interim CONSOLIDATED financial statements
For the three months period ended March 31, 2021
In accordance with National Instrument 51-102, of the Canadian Securities Administrators, North American Nickel Inc. (the “Company” or “North American Nickel”) discloses that its auditors have not reviewed the unaudited condensed interim consolidated interim financial statements.
The unaudited condensed interim consolidated financial statements of the Company for the three months period ended March 31, 2021 (“Financial Statements”) have been prepared by management. The Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto of the Company for the fiscal year ended December 31, 2020, which are available at the SEDAR website under the Company’s profile (www.sedar.com). The Financial Statements are stated in thousands of Canadian dollars, unless otherwise indicated, and are prepared in accordance with International Financial Reporting Standards (“IFRS”).
1 | North American Nickel / Q1 2021 |
Condensed Interim Consolidated Statements of Financial Position
(Expressed in thousands of Canadian dollars)
| Notes | March 31, 2021 | December 31, 2020 | ||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS | ||||||||||
| Cash | 716 | 308 | ||||||||
| Receivables and other current assets | 4 | 80 | 59 | |||||||
| Due from related party | 9 | 76 | 55 | |||||||
| TOTAL CURRENT ASSETS | 872 | 422 | ||||||||
| NON-CURRENT ASSETS | ||||||||||
| Equipment | 13 | 21 | ||||||||
| Exploration and evaluation assets | 5 | 39,168 | 39,103 | |||||||
| Advance | 8 | - | 50 | |||||||
| Investment | 8, 9 | 132 | 48 | |||||||
| TOTAL NON-CURRENT ASSETS | 39,313 | 39,222 | ||||||||
| TOTAL ASSETS | 40,185 | 39,644 | ||||||||
| LIABILITIES | ||||||||||
| Trade payables and accrued liabilities | 6, 9 | 527 | 362 | |||||||
| Provision for restoration obligation | 5, 11 | 267 | 267 | |||||||
| TOTAL LIABILITIES | 794 | 629 | ||||||||
| EQUITY | ||||||||||
| Share capital - preferred | 7 | 591 | 591 | |||||||
| Share capital – common | 7 | 90,534 | 89,627 | |||||||
| Reserve | 7 | 2,592 | 2,096 | |||||||
| Deficit | (54,326 | ) | (53,299 | ) | ||||||
| TOTAL EQUITY | 39,391 | 39,015 | ||||||||
| TOTAL LIABILITIES AND EQUITY | 40,185 | 39,644 | ||||||||
Nature of Operations (Note 1)
Commitments (Note 5 and 11)
Subsequent Events (Note 14)
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
Approved by the Board of Directors on May 26, 2021
| “signed” | “signed” |
Keith Morrison Director |
Doug Ford Audit Committee Chair |
2 | North American Nickel / Q1 2021 |
Condensed Interim Consolidated Statements of Comprehensive Loss
(Expressed in thousands of Canadian dollars)
| Notes | March 31, 2021 | March 31, 2020 | ||||||||
| EXPENSES | ||||||||||
| General and administrative expenses | 8, 11, 13 | (262 | ) | (305 | ) | |||||
| Property investigation | (1 | ) | (6 | ) | ||||||
| Amortization | (8 | ) | (2 | ) | ||||||
| Share-based payments | 7 | (837 | ) | (884 | ) | |||||
| (1,108 | ) | (1,197 | ) | |||||||
| OTHER ITEMS | ||||||||||
| Foreign exchange loss | - | (1 | ) | |||||||
| Equity loss on investment | 8 | (17 | ) | - | ||||||
| (17 | ) | (1 | ) | |||||||
| TOTAL COMPREHENSIVE LOSS FOR THE PERIOD | (1,125 | ) | (1,198 | ) | ||||||
| Basic and diluted weighted average number of common shares outstanding | 113,245,018 | 88,690,791 | ||||||||
| Basic and diluted loss per share | (0.01 | ) | (0.01 | ) | ||||||
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
3 | North American Nickel / Q1 2021 |
Condensed Interim Consolidated Statements of Changes in Equity
(Expressed in thousands of Canadian dollars)
| Notes | Number of Shares | Share Capital | Preferred Stock | Reserve | Deficit | Total Equity | |||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2019 | 88,690,791 | 89,006 | 591 | 4,175 | (54,341 | ) | 39,431 | ||||||||||||||||||||
| Net and comprehensive loss | - | - | - | - | (1,198 | ) | (1,198 | ) | |||||||||||||||||||
| Share capital issued through private placement | - | - | - | - | - | - | |||||||||||||||||||||
| Share issue costs | - | - | - | - | - | - | |||||||||||||||||||||
| Value allocated to warrants | - | - | - | - | - | - | |||||||||||||||||||||
| Expired warrants | - | - | - | - | - | - | |||||||||||||||||||||
| Forfeited/expired options | 7 | - | - | - | (200 | ) | 200 | - | |||||||||||||||||||
| Share-based payments | 7 | - | - | - | 884 | - | 884 | ||||||||||||||||||||
BALANCE MARCH 31, 2020 | 88,690,791 | 89,006 | 591 | 4,859 | (55,339 | ) | 39,117 | ||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2020 | 109,833,648 | 89,627 | 591 | 2,096 | (53,299 | ) | 39,015 | ||||||||||||||||||||
| Net and comprehensive loss | - | - | - | - | (1,125 | ) | (1,125 | ) | |||||||||||||||||||
| Share capital issued through exercise of warrants | 7 | 6,278,219 | 665 | - | - | - | 665 | ||||||||||||||||||||
| Share issue costs | 7 | - | (1 | ) | - | - | - | (1 | ) | ||||||||||||||||||
| Exercised warrants | 7 | - | 243 | - | (243 | ) | - | - | |||||||||||||||||||
| Share-based payments | 7 | - | - | - | 837 | - | 837 | ||||||||||||||||||||
| Forfeited/expired options | 7 | - | - | - | (98 | ) | 98 | - | |||||||||||||||||||
| BALANCE AT MARCH 31, 2021 | 116,111,867 | 90,534 | 591 | 2,592 | (54,326 | ) | 39,391 | ||||||||||||||||||||
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
4 | North American Nickel / Q1 2021 |
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in thousands of Canadian dollars)
| Three months ended | ||||||||
| March 31, 2021 | March 31, 2020 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Loss for the period | (1,125 | ) | (1,198 | ) | ||||
| Items not affecting cash: | ||||||||
| Amortization | 8 | 2 | ||||||
| Share-based payments | 837 | 884 | ||||||
| Equity loss on investment | 17 | - | ||||||
| Changes in working capital | 117 | (293 | ) | |||||
| Net cash used in operating activities | (146 | ) | (605 | ) | ||||
| INVESTING ACTIVITIES | ||||||||
| Expenditures on exploration and evaluation assets | (59 | ) | (296 | ) | ||||
| Investment | (51 | ) | - | |||||
| Net cash provided by (used in) investing activities | (110 | ) | (296 | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds from exercise of warrants | 665 | - | ||||||
| Share issuance costs | (1 | ) | - | |||||
| Net cash provided by financing activities | 664 | - | ||||||
| Change in cash for the period | 408 | (901 | ) | |||||
| Cash, beginning of the period | 308 | 1,098 | ||||||
| Cash, end of the period | 716 | 197 | ||||||
Supplemental cash flow information (Note 10)
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
5 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
| 1. | NATURE AND CONTINUANCE OF OPERATIONS |
North American Nickel Inc. (the “Company”) was incorporated on September 23, 1983, under the laws of the Province of British Columbia, Canada. The primary mailing office is located at 3400 – 100 King Street West, PO Box 130, Toronto, Ontario, M5X 1A4 and the records office of the Company is located at 666 Burrard Street, Suite 2500, Vancouver BC V6C 2X8. The Company’s common shares trade on the TSX Venture Exchange (“TSXV”) under the symbol “NAN”.
The Company’s principal business activity is the exploration and development of mineral properties in Greenland and Canada, as well as in Botswana through its participation in Premium Nickel Resources. The Company has not yet determined whether any of these properties contain ore reserves that are economically recoverable. The recoverability of carrying amounts shown for exploration and evaluation assets is dependent upon a number of factors including environmental risk, legal and political risk, the existence of economically recoverable mineral reserves, confirmation of the Company’s interests in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete exploration and development, and to attain sufficient net cash flow from future profitable production or disposition proceeds.
These financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. The ability of the Company to continue operations as a going concern is ultimately dependent upon achieving profitable operations and its ability to raise additional capital. To date, the Company has not generated profitable operations from its resource activities and will need to invest additional funds in carrying out its planned exploration, development and operational activities. These uncertainties cast substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
The exploration and evaluation properties in which the Company currently has an interest are in the exploration stage. As such, the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration and cover administrative costs, the Company will use its existing working capital and raise additional amounts as needed. Although the Company has been successful in its past fundraising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future. The Company will continue to assess new properties and seek to acquire interests in additional properties if there is sufficient geologic or economic potential and if adequate financial resources are available to do so.
The coronavirus COVID-19 declared as a global pandemic in March 2020 continued throughout the 2020 year and to date. This contagious disease outbreak, which continues to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. The Company is closely monitoring the impact of the pandemic on all aspects of its business but anticipates that COVID-19 may impact the Company’s ability to conduct fieldwork on projects.
The consolidated financial statements were approved and authorized for issuance by the Board of Directors of the Company on May 25, 2021. The discussion in notes to the financial statements is stated in Canadian dollars except amounts in tables are expressed in thousands of Canadian dollars.
| 2. | BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES |
| (a) | Statement of Compliance |
These condensed interim consolidated financial statements were prepared in accordance with International Financial Reporting Standards (“IFRS”), including IAS 34 Interim Financial Statements. The condensed interim consolidated financial statements do not include all of the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company’s audited annual financial statements for the year ended December 31, 2020. Any subsequent changes to IFRS that are reflected in the Company’s consolidated financial statements for the year ended December 31, 2021 could result in restatement of these condensed interim consolidated financial statements.
6 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
| (b) | Basis of Preparation |
These condensed interim consolidated financial statements have been prepared under the historical cost convention, modified by the revaluation of any financial assets and financial liabilities where applicable. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the Company’s accounting policies.
The significant accounting policies used in the preparation of these condensed interim consolidated financial statements are consistent with those used in the preparation of the annual consolidated financial statements for the year ended December 31, 2020.
| (c) | Basis of consolidation |
These condensed interim consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary, North American Nickel (US) Inc. which was incorporated in the State of Delaware on May 22, 2015. Consolidation is required when the Company is exposed, or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. All intercompany transactions, balances, income and expenses are eliminated upon consolidation.
| 3. | CHANGES IN ACCOUNTING POLICIES |
Accounting standards and amendments issued but not yet effective
Certain accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.
IAS 16 - “Property, Plant and Equipment”
The IASB issued an amendment to IAS 16, Property, Plant and Equipment to prohibit the deducting from property, plant and equipment amounts received from selling items produced while preparing an asset for its intended use. Instead, sales proceeds and its related costs must be recognized in profit or loss. The amendment will require companies to distinguish between costs associated with producing and selling items before the item of property, plant and equipment is available for use and costs associated with making the item of property, plant and equipment available for its intended use. The amendment is effective for annual periods beginning on or after January 1, 2022, with earlier application permitted. The amendment is not currently applicable.
IAS 1 – “Presentation of Financial Statements”
The IASB issued an amendment to IAS 1, Presentation of Financial Statements to clarify one of the requirements under the standard for classifying a liability as non-current in nature, specifically the requirement for an entity to have the right to defer settlement of the liability for at least 12 months after the reporting period. The amendment includes: (i) specifying that an entity’s right to defer settlement must exist at the end of the reporting period; (ii) clarifying that classification is unaffected by management’s intentions or expectations about whether the entity will exercise its right to defer settlement; (iii) clarifying how lending conditions affect classification; and (iv) clarifying requirements for classifying liabilities an entity will or may settle by issuing its own equity instruments. An assessment will be performed prior to the effective date of January 1, 2023 to determine the impact to the Company’s financial statements.
7 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
| 4. | RECEIVABLES AND OTHER CURRENT ASSETS |
A summary of the receivables and other current assets as of March 31, 2021 is detailed in the table below:
(All amounts in table are expressed in thousands of Canadian dollars)
March 31, 2021 | December 31, 2020 | |||||||
| Sales taxes receivable | 28 | 23 | ||||||
| Other current assets (prepaid expenses and amounts receivable) | 52 | 36 | ||||||
| 80 | 59 | |||||||
| 5. | EXPLORATION AND EVALUATION ASSETS |
(All amounts in table are expressed in thousands of Canadian dollars)
| Canada | Greenland | |||||||||||||||||||||||
Post Creek Property | Halcyon Property | Quetico Claims | Lingman Lake | Maniitsoq Property |
Total | |||||||||||||||||||
| Acquisition | ||||||||||||||||||||||||
| Balance, December 31, 2020 | 308 | 238 | 42 | 14 | 46 | 648 | ||||||||||||||||||
| Acquisition costs – cash | 5 | 4 | - | - | - | 9 | ||||||||||||||||||
| Balance, March 31, 2021 | 313 | 242 | 42 | 14 | 46 | 657 | ||||||||||||||||||
| Exploration | ||||||||||||||||||||||||
| Balance, December 31, 2020 | 1,529 | 252 | 142 | 13 | 36,519 | 38,455 | ||||||||||||||||||
| Property maintenance | - | - | - | - | 17 | 17 | ||||||||||||||||||
| Drilling | - | - | - | - | 11 | 11 | ||||||||||||||||||
| Geology | 3 | 3 | 10 | - | 11 | 27 | ||||||||||||||||||
| Geophysics | - | - | 1 | - | - | 1 | ||||||||||||||||||
| 3 | 3 | 11 | - | 39 | 56 | |||||||||||||||||||
| Balance, March 31, 2021 | 1,532 | 255 | 153 | 13 | 36,558 | 38,511 | ||||||||||||||||||
Total, March 31, 2021 | 1,845 | 497 | 195 | 27 | 36,604 | 39,168 | ||||||||||||||||||
8 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
| Canada | Greenland | |||||||||||||||||||||||||||
Post Creek Property | Halcyon Property | Quetico Claims | Enid Creek | Lingman Lake | Maniitsoq Property |
Total | ||||||||||||||||||||||
| Acquisition | ||||||||||||||||||||||||||||
| Balance, December 31, 2019 | 298 | 230 | 42 | 83 | 14 | 42 | 709 | |||||||||||||||||||||
| Acquisition costs – cash | 5 | 4 | - | - | - | 4 | 13 | |||||||||||||||||||||
| Balance, March 31, 2020 | 303 | 234 | 42 | 83 | 14 | 46 | 722 | |||||||||||||||||||||
| Exploration | ||||||||||||||||||||||||||||
| Balance, December 31, 2019 | 1,498 | 233 | 39 | 33 | 13 | 36,108 | 37,924 | |||||||||||||||||||||
| Administration | - | - | - | - | - | - | - | |||||||||||||||||||||
| Corporate social responsibility | - | - | - | - | - | 1 | 1 | |||||||||||||||||||||
| Property maintenance | 6 | 5 | 1 | - | - | - | 12 | |||||||||||||||||||||
| Drilling | - | - | 2 | 161 | - | 10 | 173 | |||||||||||||||||||||
| Environmental, health and safety | - | - | - | - | - | - | - | |||||||||||||||||||||
| Geology | 4 | 3 | 1 | 55 | - | 12 | 75 | |||||||||||||||||||||
| Geophysics | - | - | 2 | 65 | - | - | 67 | |||||||||||||||||||||
| Helicopter charter aircraft (recovery) | - | - | - | - | - | - | - | |||||||||||||||||||||
| Infrastructure | - | - | - | - | - | - | - | |||||||||||||||||||||
| Write-off | - | - | - | - | - | - | - | |||||||||||||||||||||
| 10 | 8 | 6 | 281 | - | 23 | 328 | ||||||||||||||||||||||
| Balance, March 31 ,2020 | 1,508 | 241 | 45 | 314 | 13 | 36,131 | 38,252 | |||||||||||||||||||||
| Total, March 31, 2020 | 1,811 | 475 | 87 | 397 | 27 | 36,177 | 38,974 | |||||||||||||||||||||
9 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
The following is a description of the Company’s exploration and evaluation assets and the related spending commitments:
Post Creek
On December 23, 2009 and as last amended on March 12, 2013, the Company completed the required consideration and acquired the rights to a mineral claim known as the Post Creek Property located within the Sudbury Mining District of Ontario.
Commencing August 1, 2015, the Company is obligated to pay advances on net smelter return royalties (“NSR”) of $10,000 per annum. The Company paid $5,000 during the three months period ended March 31, 2021 (March 31, 2020 - $5,000). The total of the advances will be deducted from any payments to be made under the NSR.
During the three months period ended March 31, 2021, the Company incurred exploration expenditures totalling $3,406 (March 31, 2020 - $9,949) on the Post Creek Property.
Halcyon
On March 31, 2015, the Company completed the required consideration of the option agreement and acquired rights to a mineral claim known as the Halcyon Property located within the Sudbury Mining District of Ontario, subject to certain NSR and advance royalty payments.
Commencing August 1, 2015, the Company is obligated to pay advances on the NSR of $8,000 per annum. The Company paid $4,000 during the three months period ended March 31, 2021 (March 31, 2020 - $4,000). The total of the advances will be deducted from any payments to be made under the NSR.
During the three months period ended March 31, 2021, the Company incurred $7,406 (March 31, 2020 - $8,407) in acquisition and exploration expenditures on the Halcyon Property.
Quetico
On April 26, 2018, the Company acquired the right to certain mineral claims known as Quetico located within the Sudbury Mining District of Ontario. The Company incurred total acquisition and exploration related costs of $64,256 during the year ended December 31, 2018.
The Company had no minimum required exploration commitment for the years ended December 31, 2020, 2019 and 2018 as it is not required to file any geoscience assessment work between the initial recording of a mining claim and the first anniversary date of the mining claim and claim anniversary dates were adjusted as a result of the COVID-19 pandemic. In April 2020, the Company applied for a one year exclusion under a COVID-19 relief program offered by the Ontario Ministry of Energy, Northern Development and Mines, thus adjusting the claim anniversary dates to April and May of 2021. The COVID-19 relief program was offered again commencing in 2021, and the Company has applied an additional one year exclusion.
By the second anniversary of the recording of a claim and by each anniversary thereafter, a minimum of $400 worth of exploration activity per claim unit must be reported to the Provincial Recording Office. The Company could maintain mining claims by filing an Application to Distribute Banked Assessment Work Credits form before any due date. Payments in place of reporting assessment work may also be used to meet yearly assessment work requirements, provided the payments are not used for the first unit of assessment work and consecutively thereafter. Payments cannot be banked to be carried forward for future use. The total annual work requirement for Quetico project after April 26, 2021 is $324,000 should the Company maintain the current size of the claims. Work reports for 2020 expenditures have been filed but have not yet been approved.
During the three months period ended March 31, 2021, the Company incurred $10,993 (March 31, 2020 - $5,517) in exploration and license related expenditures on the Quetico Property.
Loveland Nickel (Enid Creek) Property
On September 25, 2019, the Company entered into earn in agreement to acquire a 100% interest, subject to a 1% NSR, in certain claims known as the Loveland Nickel (Enid Creek) Property located in Timmins, Ontario. Consideration included acquisition costs of $1,525,000 in cash and the issuance of 300,000 common shares. During the year ended December 31, 2019, the Company paid $25,000 and issued 300,000 common shares at a fair value of $51,000. Exploration expenditures of $4,500,000 were to be incurred over a period ending September 25, 2024.
10 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
As of December 31, 2020, the Company incurred an aggregate exploration and acquisition expenditures of $437,897. Based on the results of the exploration program completed in April 2020, the management elected not to proceed with further exploration on the property and terminated the agreement. Accordingly, all acquisition and exploration related costs were impaired as at December 31, 2020, totalling $437,897.
Lingman Lake Property
During the year ended December 31, 2019, the Company staked certain mineral claims known as Lingman Lake located northwest of Thunder Bay, Ontario. During the three months period ended March 31, 2021, the Company incurred total acquisition and related costs of $Nil (March 31, 2020 - $Nil).
Maniitsoq
The Company has been granted certain exploration licenses, by the Bureau of Minerals and Petroleum (“BMP”) of Greenland for exclusive exploration rights of an area comprising the Maniitsoq Property, located near Ininngui, Greenland. The Maniitsoq Property is subject to a 2.5% NSR. The Company can reduce the NSR to 1% by paying $2,000,000 on or before 60 days from the decision to commence commercial production.
At the expiration of the first license period, the Company may apply for a second license period (years 6-10), and the Company may apply for a further 3-year license for years 11 to 13. Thereafter, the Company may apply for additional 3-year licenses for years 14 to 16, 17 to 19 and 20 to 22. The Company will be required to pay additional license fees and will be obligated to incur minimum eligible exploration expenses for such years.
The Company may terminate the licenses at any time, however any unfulfilled obligations according to the licenses will remain in force, regardless of the termination.
Future required minimum exploration expenditures will be adjusted each year on the basis of the change to the Danish Consumer Price Index.
On January 7, 2021, the Company announced that it has received notification from the Greenland government that surplus assessment credits from exploration conducted on the Company’s exclusive mineral exploration licenses located on the southwest coast of Greenland have been extended by one year. Mineral licenses that received one-year credit extension include exploration license 2011/54, exploration license 2012/28 and exploration license 2018/21.
During the three months period ended March 31, 2021, the Company spent in aggregate of $38,304 (March 31, 2020 - $27,527 in acquisition and exploration expenditures on the Maniitsoq Property, which is comprised of the Sulussugut, Ininngui, Carbonatite and 2020/05 Licenses.
During the year ended December 31, 2020, the Company has recorded a $267,000 provision for camp site cleanup and restoration obligations. The cost accrued is based on the current best estimate of restoration activities that will be required on the Maniitsoq Property. The Company’s provision for future cleanup is based on the level of known disturbance at the reporting date and known requirements. It is not currently possible to estimate the impact on operating results, if any, and the actual amount of any economic outflow related to this obligation is dependent upon future events and cannot be reliably measured. The Company is expected to fulfil the obligation during the next 12 months.
Further details on the licenses comprising the Maniitsoq Property and related expenditures are outlined below:
Sulussugut License (2011/54)
(All references to amounts in Danish Kroners, “DKK”)
Effective August 15, 2011, the Company was granted an exploration license (the “Sulussugut License”) by the BMP of Greenland for exclusive exploration rights of an area located near Sulussugut, Greenland. The Company paid a license fee of $5,742 (DKK 31,400) upon granting of the Sulussugut License. The application for another 5-year term on the Sulussugut License was submitted to the Greenland Mineral License & Safety Authority which was effective on April 11, 2016, with December 31, 2017 being the seventh year. During the year ended December 31, 2016, the Company paid a license fee of $7,982 (DKK 40,400) which provided for renewal of the Sulussugut License until 2020.
11 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
During the year ended December 31, 2020, the Company received one year period license extension, which provides for renewal period until 2021.
To December 31, 2015, under the terms of a preliminary license, the Company completed the exploration requirements of an estimated minimum of DKK 83,809,340 (approximately $15,808,386) between the years ended December 31, 2011 to 2015 by incurring $26,115,831 on the Sulussugut License. Under the terms of the second license period, there was no required minimum exploration expenditures for the year ended December 31, 2019. As of December 31, 2020, the Company has spent $56,262,968 on exploration costs for the Sulussugut License.
The Company had no minimum required exploration commitment for the year ended December 31, 2020 and available credits of DKK 283,945,553 (approximately $58,776,729) at the end of December 31, 2020. During the year ended December 31, 2020, the Company had approved exploration expenditures of DKK 865,100 (approximately $179,076). The credits available from each year may be carried forward for 3 years plus 1 year extension and expire between December 31, 2022 to December 2024. The Company has no exploration commitment for 2021 year.
During the three months period ended March 31, 2021, the Company spent a total of $26,665 (March 31, 2020 - $20,093) in exploration and license related expenditures on the Sulussugut License.
To December 31, 2020 and 2019, the Company has completed all obligations with respect to required reduction of the area of the license.
Ininngui License (2012/28)
Effective March 4, 2012, the Company was granted an exploration license (the “Ininngui License”) by the BMP of Greenland for exclusive exploration rights of an area located near Ininngui, Greenland. The Company paid a license fee of $5,755 (DKK 32,200) upon granting of the Ininngui License. The Ininngui License was valid for an initial 5 years until December 31, 2016, with December 31, 2012 being the first year. The license was extended for a further 5 years, until December 31, 2021, with December 31, 2017 being the first year. During the year ended December 31, 2020, the Company received one year period license extension, which provides for renewal period until 2022.
The Ininngui License is contiguous with the Sulussugut License.
Should the Company not incur the minimum exploration expenditures on the license in any one year from years 2-5, the Company may pay 50% of the difference in cash to BMP as full compensation for that year. This procedure may not be used for more than 2 consecutive calendar years and as at December 31, 2020, the Company has not used the procedure for the license.
The Company had no minimum required exploration commitment for the year ended December 31, 2020. As of December 31, 2020, the Company has spent $5,199,578 on exploration costs for the Ininngui License and exceeded the minimum requirement with a total cumulative surplus credits of DKK 30,424,551 (approximately $6,297,882). The credits available from each year may be carried forward for 3 years plus 1 year extension and expire between December 31, 2022 to December 2024. The Company has no exploration commitment for 2021 year.
During the three months period ended March 31, 2021, the Company spent a total of $10,566 in exploration and license related expenditures (March 31, 2020 - $2,089).
Carbonatite License (2018/21)
Effective May 4, 2018, the Company was granted an exploration license (the “Carbonatite License”) by the BMP of Greenland for exclusive exploration rights of an area located near Maniitsoq in West Greenland. The Company paid a license fee of $6,523 (DKK 31,000) upon granting of the Carbonatite License. The Carbonatite License is valid for 5 years until December 31, 2022, with December 31, 2020 being the third year. During the year ended December 31, 2020, the Company received one year period license extension, which provides for renewal period until 2023.
12 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
The Company has no minimum required exploration obligation for the year ended December 31, 2020. As of December 31, 2020, the Company has spent $1,504,317 on exploration costs for the Carbonatite License. To December 31, 2020, the Company’s expenditures exceeded the minimum requirement and the Company has a total surplus credit of DKK 10,544,473 (approximately $2,182,706). The credit available from each year may be carried forward 3 years plus 1 year extension and expire between December 31, 2023 to December 2024. The Company has no exploration commitment for 2021 year.
During the three months period ended March 31, 2021, the Company spent a total of $1,073 in exploration and license related expenditures (March 31, 2020 - $1,044).
Ikertoq License
During the year ended December 31, 2018, the Company was granted an exploration license, (the “Ikertoq License”) by the BMP of Greenland and spent total of $132,679 in exploration and license related expenditures. The license was later relinquished and the costs were expensed as at December 31, 2018.
West Greenland Prospecting License (2020/05)
On February 18, 2020, the Company was granted new prospective license No. 2020/05, by the BMP of Greenland for a period of 5 years ending December 31, 2024. The Company paid a granting fee of $4,301 (DKK 21,900). There were no exploration related costs incurred during the three months period ended March 31, 2021.
| 6. | TRADE PAYABLES AND ACCRUED LIABILITIES |
(All amounts in table are expressed in thousands of Canadian dollars) | March 31, 2021 | December 31, 2020 | ||||||
| Trade payables | 400 | 290 | ||||||
| Amounts due to related parties (Note 9) | 104 | 28 | ||||||
| Accrued liabilities | 23 | 44 | ||||||
| 527 | 362 | |||||||
| 7. | SHARE CAPITAL, WARRANTS AND OPTIONS |
The authorized capital of the Company comprises an unlimited number of common shares without par value and 100,000,000 Series 1 convertible preferred shares without par value.
| a) | Common shares issued and outstanding |
2021
During the three months period ended March 31, 2021, the Company issued 6,278,219 common shares and received $665,135 in proceeds from the exercise of 6,278,219 warrants. There were no warrants exercised during the three months period ended March 31, 2020. As at March 31, 2021, the Company has 116,111,867 common shares issued and outstanding, (March 31, 2020 - 88,690,791).
2020
On August 13, 2020, the Company closed the first tranche of its non-brokered private placement equity financing consisting of 15,481,077 units of the Company at a price of $0.07 per unit, for aggregate gross proceeds of $1,083,675. On August 31, 2020, the Company closed the second and final tranche of its non-brokered private placement equity financing consisting of 5,661,780 units of the Company at a price of $0.07 per unit, for aggregate gross proceeds of $396,325. Each unit consists of one common share in the capital of the Company and one transferable common share purchase warrant of the Company. Each warrant will entitle the holder to acquire one common share of the Company at an exercise price of $0.09 for a period of 24 months from its date of issuance. The warrants are subject to an acceleration clause such that if the closing market price of the common shares on the TSX-V is greater than $0.12 per common share for a period of 10 consecutive trading days at any time after the four-month anniversary of the closing of the placement, the Company may, at its option, accelerate the warrant expiry date to within 30 days.
13 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
In connection with the non-brokered private financing, the Company incurred total share issuance costs of $124,222. The Company issued and aggregate of 588,154 common share purchase warrants. Each warrant will entitle the holder to acquire one common share of the Company at an exercise price of $0.09 for a period of 24 months from its date of issuance.
The Company allocated a $716,055 fair value to the warrants issued in conjunction with the private placement and $18,547 to agent’s warrants. The fair value of warrants was determined using the Black-Scholes Option Pricing Model with the following assumptions; expected life of 2 years, expected dividend yield of 0%, a risk-free interest rate of 0.28% to 0.31% range and an expected volatility of 158% to 158.53% range.
As at December 31, 2020 the Company had 109,833,648 common shares issued and outstanding.
| b) | Preferred shares issued and outstanding |
As at March 31, 2021 and March 31, 2020, there are 590,931 series 1 preferred shares outstanding.
The rights and restrictions of the preferred shares are as follows:
| i) | dividends shall be paid at the discretion of the directors; | |
| ii) | the holders of the preferred shares are not entitled to vote except at meetings of the holders of the preferred shares, where they are entitled to one vote for each preferred share held; | |
| iii) | the shares are convertible at any time after 6 months from the date of issuance, upon the holder serving the Company with 10 days written notice; and | |
| iv) | the number of the common shares to be received on conversion of the preferred shares is to be determined by dividing the conversion value of the share, $1 per share, by $9.00. |
| c) | Warrants |
A summary of common share purchase warrants activity during the three months period ended March 31, 2021 is as follows:
| March 31, 2021 | December 31, 2020 | |||||||||||||||
| Number Outstanding | Weighted Average Exercise Price ($) | Number Outstanding | Weighted Average Exercise Price ($) | |||||||||||||
| Outstanding, beginning of the period | 25,715,742 | 0.11 | 15,651,397 | 0.96 | ||||||||||||
| Issued | - | - | 21,731,011 | 0.09 | ||||||||||||
| Exercised | (6,278,219 | ) | 0.11 | - | - | |||||||||||
| Cancelled / expired | - | - | (11,666,666 | ) | 1.20 | |||||||||||
| Outstanding, end of the period | 19,437,523 | 0.12 | 25,715,742 | 0.11 | ||||||||||||
14 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
At March 31, 2021, the Company had outstanding common share purchase warrants exercisable to acquire common shares of the Company as follows:
| Warrants Outstanding | Expiry Date | Exercise Price ($) | Weighted Average remaining contractual life (years) | |||||||||
| 3,359,133 | December 18, 2021 | 0.25 | 0.12 | |||||||||
| 12,535,581 | 1 | August 13, 2022 | 0.09 | 0.88 | ||||||||
| 3,542,809 | 1 | August 31, 2022 | 0.09 | 0.26 | ||||||||
| 19,437,523 | 1.26 | |||||||||||
1 The warrants are subject to an acceleration clause such that if the volume-weighted average trading price of the Company’s common shares on the TSX-V exceeds $0.12 per common share for a period of 10 consecutive trading days at any date before the expiration date of such warrants, the Company may, at its option, accelerate the warrant expiry date to within 30 days. To March 31, 2021, the Company’s common shares have met the criterion for acceleration. The Company, however, has not accelerated the warrant expiry date.
| d) | Stock options |
The Company adopted a Stock Option Plan (the “Plan”), providing the authority to grant options to directors, officers, employees and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. Under the Plan, the exercise price of each option equals the market price or a discounted price of the Company’s stock as calculated on the date of grant. The options can be granted for a maximum term of 10 years.
A summary of option activity under the Plan during the three months period ended March 31, 2021, is as follows:
| March 31, 2021 | December 31, 2020 | |||||||||||||||
| Number Outstanding | Weighted Average Exercise Price ($) | Number Outstanding | Weighted Average Exercise Price ($) | |||||||||||||
| Outstanding, beginning of the period | 7,978,725 | 0.17 | 2,130,550 | 1.51 | ||||||||||||
| Issued | 3,185,000 | 0.32 | 7,850,000 | 0.15 | ||||||||||||
| Cancelled / expired | (603,100 | ) | 0.33 | (2,001,825 | ) | 1.51 | ||||||||||
| Outstanding, end of the period | 10,560,625 | 0.21 | 7,978,725 | 0.17 | ||||||||||||
During the three months period ended March 31, 2021, the Company granted an aggregate total of 3,185,000 stock options to employees, directors and consultants with a maximum term of 5 years. All options vest immediately and are exercisable at $0.32 per share. The Company calculates the fair value of all stock options using the Black-Scholes Option Pricing Model. The fair value of options granted during the period ended March 31, 2021 amounted to $837,444 and was recorded as a share-based payment expense.
During the three months period ended March 31, 2020, the Company granted 6,650,000 stock options to purchase common shares in the capital of the Company pursuant to the Company’s stock option plan. All of the options are exercisable for a period of five years at an exercise price of $0.16 per share. The fair value of options granted during the period ended March 31, 2020 amounted to $884,247 and was recorded as a share-based payment expense.
15 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
The fair value of stock options granted and vested during the years ended March 31, 2021 was calculated using the following assumptions:
| March 31, 2021 | March 31, 2020 | |||||||
| Expected dividend yield | 0 | % | 0 | % | ||||
| Expected share price volatility | 127.83 | % | 121.55 | % | ||||
| Risk free interest rate | 0.93 | % | 1.21 | % | ||||
| Expected life of options | 5 years | 5 years | ||||||
Details of options outstanding as at March 31, 2021 are as follows:
Options Outstanding | Options Exercisable | Expiry Date | Exercise Price ($) | Weighted average remaining contractual life (years) | ||||||||||||
| 40,625 | 40,625 | February 21, 2022 | 1.20 | 0.00 | ||||||||||||
| 35,000 | 35,000 | February 28, 2023 | 1.20 | 0.01 | ||||||||||||
| 6,100,000 | 6,100,000 | February 24, 2025 | 0.16 | 2.27 | ||||||||||||
| 1,200,000 | 1,200,000 | August 19, 2025 | 0.09 | 0.50 | ||||||||||||
| 3,185,000 | 3,185,000 | February 25, 2026 | 0.32 | 1.49 | ||||||||||||
| 10,560,625 | 10,560,625 | 4.27 | ||||||||||||||
| e) | Reserve |
The reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock options or warrants are exercised, at which time the corresponding amount will be transferred to share capital. Amounts recorded for forfeited or expired unexercised options and warrants are transferred to deficit. During the three months period ended March 31, 2021, the Company transferred $97,953 (March 31, 2020 - $199,971) to deficit for expired options and transferred $242,901 (March 31, 2020 - $Nil) to common share capital for exercised warrants.
During the three months period year ended March 31, 2021, the Company recorded $837,444 of share-based payments to reserves (March 31, 2020 - $884,247).
| 8. | INVESTMENT IN PREMIUM NICKEL RESOURCES INC. |
On September 30, 2019, the Company entered into a Memorandum of Understanding (“MOU”) with Premium Nickel Resources Inc. (“Premium Nickel”). Pursuant to the MOU, the Company and Premium Nickel set forth their interests in negotiating and acquiring the business and assets of BCL Limited, a private company with operations in Botswana that is currently in liquidation.
Concurrent with the MOU, the Company initially subscribed for 2,400,000 common shares of Premium Nickel at $0.01, for a total investment of $24,000. The Company’s initial investment included a provision that gives the Company the right to nominate two directors to the board of directors of Premium Nickel. The Company’s initial investment also included Premium Nickel issuing the Company a non-transferable share purchase warrant (the “Warrant”), which entitles the Company to purchase common shares of Premium Nickel, for up to 15% of the capital of Premium Nickel upon payment of US $10 million prior to the fifth anniversary of the date of issue. At December 31, 2019, the Company’s investment was recorded as an advance, as the Company had not yet been issued the common share certificate nor the Warrant. The initial investment common share certificate and Warrant were issued during the year ended December 31, 2020.
To December 31, 2020, the Company subscribed for a further 4,657,711 common shares of Premium Nickel, for a further investment of $154,164. The common shares underlying the investment are restricted (“Restricted”) from being traded before such date that is 4 months after the later of (a) the date of issuance and (b) the date at which Premium Nickel becomes a reporting issuer in any province or territory. To December 31, 2020 and subsequently, the underlying common shares are Restricted. To March 31, 2021, the Company’s total investment constitutes a 9.94% holding (March 31, 2020 – 11.37%) in Premium Nickel.
On January 14, 2021, the Company invested a further $50,400 towards the acquisition of common shares of Premium Nickel. A share certificate for 251,000 common shares was issued to the Company on March 23, 2021, representing the Company’s $100,400 investment, of which $50,000 was recorded in advances at December 31, 2020.
16 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
As at March 31, 2021, the Company had representation on the board, participate in the policy-making process, material transactions between the Company and Premium Nickel, interchange of managerial personnel, provision of essential technical information and operating involvement. Accordingly, the Company determined that it has significant influence in Premium Nickel and has used equity accounting of the investment. Premium Nickel’s financial information at March 31, 2021 was net assets of $1,722,791 which was comprised primarily of cash, and a total comprehensive loss of $169,894 was recorded for the three months period ended March 31, 2021.
Details of the Company’s investment at March 31, 2021 is as follows:
| Investment | ||||
| Balance, December 31, 2020 | 48 | |||
| Reallocation of advance | 50 | |||
| Investment | 51 | |||
| Share of loss of Premium Nickel | (17 | ) | ||
| Balance, March 31, 2021 | 132 | |||
On January 1, 2020, the Company entered into a Management and Technical Services Agreement (“the Services Agreement”) with Premium Nickel whereby the Company will provide certain technical, corporate, administrative and clerical, office and other services to Premium Nickel during the due diligence stage of the contemplated arrangement. The Company will charge Premium Nickel for expenses incurred and has the right to charge a 2% administrative fee on third party expenses. The Company will invoice Premium Nickel on a monthly basis and payment shall be made by Premium Nickel no later than 15 days after receipt of such invoice. The term of the Service Agreement is for an initial period of 3 years and can be renewed for an additional 1 year period. The Service Agreement can be terminated within 30 days notice, for non-performance, by the Company giving 6 months notice or Premium Nickel within 90 days provided the Company no longer owns at least 10% of the outstanding common shares of Premium Nickel. If Premium Nickel defaults on making payments, the outstanding balance shall be treated as a loan to Premium Nickel, to be evidenced by a promissory note. The promissory note will be payable upon demand and bear interest at a rate equal to the then current lending rate plus 1%, calculated from the date of default. Subsequent payment by Premium Nickel will be first applied to accrued interest and then principle of the invoice. During the three months period ended March 31, 2021, pursuant to the Services Agreement, the Company charged Premium Nickel $161,639 (March 31, 2020 - $309,474) for services and charged $3,233 in administrative fees, received $162,587 (March 31, 2020 – $Nil) and recorded $75,725 in due from Premium Nickel (March 31, 2020 - $371,155). Subsequent to March 31, 2021, the Company received the $75,725 in full from Premium Nickel.
| 9. | RELATED PARTY TRANSACTIONS |
The following amounts due to related parties are included in trade payables and accrued liabilities (Note 6):
(All amounts in table are expressed in thousands of Canadian dollars)
March 31, 2021 | December 31, 2020 | |||||||
| Directors and officers of the Company | 94 | 21 | ||||||
| Related company | 10 | 7 | ||||||
| Total | 104 | 28 | ||||||
These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.
The following amount due from related party and advance represent as well as investment in Premium Nickel a private company incorporated in Ontario, in which certain directors and officers of the Company also hold offices and minority investments.
17 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
(All amounts in table are expressed in thousands of Canadian dollars)
March 31, 2021 | December 31, 2020 | |||||||
| Due from related party | 76 | 55 | ||||||
| Advance | - | 50 | ||||||
| Investment | 132 | 48 | ||||||
| Total | 208 | 153 | ||||||
| (a) | Related party transactions |
2020
Sentient Executive GP IV Limited (“Sentient”) and Contemporary Amperex Technology Limited (“CATL”) have historically subscribed to private placements of the Company.
As of March 31, 2021, Sentient beneficially owns 36,980,982 common shares, constituting approximately 33.66% of the currently issued and outstanding common shares of the Company.
As of March 31, 2021, CATL beneficially owns 22,944,444 common shares, constituting approximately 20.89% of the currently issued and outstanding shares of the Company. CATL has pre-emptive rights and the right to nominate one director to the board of directors of the Company.
During the three months period ended March 31, 2021, the Company recorded $11,230 (March 31, 2020 - $35,701) in fees charged by a legal firm in which the Company’s former chairman is a consultant.
| (b) | Key management personnel are defined as members of the Board of Directors and senior officers. |
Key management compensation was:
(All amounts in table are expressed in thousands of Canadian dollars)
| March 31, 2021 | March 31, 2020 | |||||||
| Geological consulting fees – expensed | - | 5 | ||||||
| Management fees – expensed | 183 | 116 | ||||||
| Salaries - expensed | - | 33 | ||||||
| Share-based payments | 621 | 671 | ||||||
| Total | 804 | 825 | ||||||
| 10. | SUPPLEMENTAL CASH FLOW INFORMATION |
Changes in working capital for the three month ended March 31, 2021 and 2020 are as follows:
(All amounts in table are expressed in thousands of Canadian dollars)
| March 31, 2021 | March 31, 2020 | |||||||
| (Increase) in accounts receivables | (27 | ) | (264 | ) | ||||
| (Increase) in prepaid expenses | (15 | ) | (12 | ) | ||||
| Increase (decrease) in trade payables and accrued liabilities | 159 | (17 | ) | |||||
| Total changes in working capital | 117 | (293 | ) | |||||
During the three months period ended March 31, 2021, the Company:
| i) | transferred $97,953 from reserve to deficit; | |
| ii) | Transferred $242,901 from reserve to common share capital; | |
| iii) | recorded $5,568 as the net change for accrued exploration and evaluation expenditures; | |
| iv) | Reclassed $50,000 from advance to investment in PNR. |
18 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
During the year ended March 31, 2020, the Company:
| i) | transferred $199,971 from reserve to deficit; | |
| ii) | recorded $44,566 as the net change for accrued exploration and evaluation expenditures; | |
| iii) | Recorded $33,735 as a further investment in PNR through reduction of amount receivable from PNR. |
| 11. | COMMITMENTS AND CONTINGENCIES |
The Company has certain commitments to meet the minimum expenditures requirements on its exploration and evaluation assets. Further, the Company has a site restoration obligation with respect to its Greenland exploration and evaluation asset.
Effective July 1, 2014, the Company had changes to management and entered into the following agreements for services with directors of the Company and a company in which a director has an interest:
| i) | Directors’ fees: $2,000 stipend per month for independent directors and $3,000 stipend per month for the chairman of the board, and $2,500 for committee chairmen. | |
| ii) | Management fees: $30,951 per month effective June 2018 up to December 31, 2019 and $19,106 per month effective January 1, 2020. |
Effectively on June 1, 2018, the Company changed the terms with Keith Morrison, the CEO, from direct employment to contracted consultant and entered into a service agreement with his company.
Each of the agreements shall be continuous and may only be terminated by mutual agreement of the parties, subject to the provisions that in the event there is a change of effective control of the Company, the party shall have the right to terminate the agreement, within sixty days from the date of such change of effective control, upon written notice to the Company. Within thirty days from the date of delivery of such notice, the Company shall forward to the party the amount of money due and owing to the party hereunder to the extent accrued to the effective date of termination.
| 12. | SEGMENTED INFORMATION |
The Company operates in one reportable operating segment being that of the acquisition, exploration and development of mineral properties in two geographic segments being Canada and Greenland (note 7). The Company’s geographic segments are as follows:
(All amounts in table are expressed in thousands of Canadian dollars)
March 31, 2021 | December 31, 2020 | |||||||
| Equipment | ||||||||
| Canada | 5 | 6 | ||||||
| Greenland | 7 | 15 | ||||||
| Total | 13 | 21 | ||||||
March 31, 2021 | December 31, 2020 | |||||||
| Exploration and evaluation assets | ||||||||
| Canada | 2,564 | 2,538 | ||||||
| Greenland | 36,604 | 36,565 | ||||||
| Total | 39,168 | 39,103 | ||||||
19 | North American Nickel / Q1 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2021
(Expressed in Canadian dollars)
| 13. | GENERAL AND ADMINISTRATIVE EXPENSES |
Details of the general and administrative expenses by nature are presented in the following table:
(All amounts in table are expressed in thousands of Canadian dollars)
| March 31, 2021 | March 31, 2020 | |||||||
| Consulting fees | 76 | 48 | ||||||
| Filing fees | 14 | 9 | ||||||
| General office expenses | 17 | 19 | ||||||
| Investor relations | 16 | 3 | ||||||
| Management fees | 126 | 116 | ||||||
| Professional fees | 13 | 35 | ||||||
| Salaries and benefits | - | 75 | ||||||
| Total | 262 | 305 | ||||||
| 14. | SUBSEQUENT EVENTS |
On April 20, the Company closed a non-brokered private placement consisting of an aggregate of 8,290,665 units of the Company (the “Units”) at a price of $0.24 per unit, for aggregate gross proceeds of $1,989,759.60. Each unit consists of one common share in the capital of the Company and one half transferable common share purchase warrant (“Warrant”) of the Company. Each full Warrant entitles the holder to acquire one common share of the Company within twenty-four (24) months following its issuance date, at a price of $0.35. The warrants are subject to an acceleration clause such that if the closing market price of the common shares on the TSX-V is greater than $0.60 per common share for a period of 10 consecutive trading days at any time after the four-month anniversary of the closing of the placement, the Company may, at its option, accelerate the warrant expiry date to within 30 days.
In connection with the private placement, the Company has paid eligible finders (the “Finders”): (i) cash commission equal to 6% of the gross proceeds raised from subscribers introduced to the Company by such Finders, being an aggregate of $57,189.62, and (ii) a number of common share purchase warrants (the “Finder Warrants”) equal to 6% of the units attributable to the Finders under the private placement, being an aggregate of 238,289 Finder Warrants. Each Finder Warrant entitles the Finder to acquire one common share of the Company for a period of twenty-four (24) months following its issuance date, at an exercise price of $0.35.
20 | North American Nickel / Q1 2021 |
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS For the Three Months Ended March 31, 2021 |
 |
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) of North American Nickel Inc. (“North American Nickel” or the “Company”) is designed to enable the reader to assess material changes in the financial condition of the Company between March 31, 2021 and December 31, 2020, and the results of operations for the three months ended March 31, 2021 (“Q1 2021”) and for the three months ended March 31, 2020 (“Q1 2020”). The MD&A should be read in conjunction with the unaudited condensed interim consolidated financial statements for the three months ended March 31, 2021 and with the audited consolidated financial statements and notes thereto of the Company for the fiscal year ended December 31, 2020 (“FY 2020”). In this MD&A, references to the Company are also references to North American Nickel and its wholly-owned subsidiary.
The financial statements, and the financial information contained in this MD&A were prepared in accordance with International Financial Reporting Standards (“IFRS”), including International Accounting Standard, Interim Financial Reporting (“IAS 34”).
All amounts in the discussion are expressed in Canadian dollars and in Danish Kroners (“DKK”). All amounts in tables are expressed in thousands of Canadian dollars and in thousands of Danish Kroners where applicable, except per share data and unless otherwise indicated.
This MD&A contains forward-looking information within the meaning of Canadian securities legislation (see “Forward-looking Information” below for full discussion on the nature of forward-looking information). Information regarding the adequacy of cash resources to carry out the Company’s exploration and development programs or the need for future financing is forward-looking information. All forward-looking information, including information not specifically identified herein, is made subject to cautionary language at the end of this document. Readers are advised to refer to the cautionary language included at the end of this MD&A under the heading “Forward-looking Information” when reading any forward-looking information. This MD&A is prepared in accordance with F1-102F1 and has been approved by the Company’s board of directors (the “Board”) prior to release.
This report is dated May 26, 2021. Readers are encouraged to read the Company’s other public filings, which can be viewed on the SEDAR website under the Company’s profile at www.sedar.com. Other pertinent information about the Company can be found on the Company’s website at www.northamericannickel.com.
Effective October 4, 2019, the Company completed a share consolidation of the Company’s issued and outstanding common shares whereby for every ten (10) pre-consolidation common shares issued and outstanding, one (1) post-consolidation common share exists without par value.
All references to share capital, warrants, options and weighted average number of shares outstanding have been adjusted in this discussion, in the consolidated financial statements and retrospectively to reflect the Company’s 10-for-1 share consolidation as if it occurred at the beginning of the earliest period presented.
Company Overview and Highlights
North American Nickel is an international mineral exploration and resource development company listed on the TSX Venture Exchange (“TSXV”) as at May 3, 2011 trading under the symbol NAN. The Company is focused on the exploration and development of a diversified portfolio of nickel-copper-cobalt-precious metals sulphide projects that should be economically feasible assuming conservative long-term commodity prices. The Company’s principal asset is its Maniitsoq Property, in Southwest Greenland, a district scale land position.
North American Nickel was incorporated under the laws of the Province of British Columbia, Canada, by filing of Memorandum and Articles of Association on September 20, 1983, under the name Rainbow Resources Ltd.
Exploration & Development Activities
Since 2011 the Company has continued the advancement of its camp scale Maniitsoq Project in Southwest Greenland and the Post Creek Property in Sudbury, Ontario.
In early 2018, NAN initiated a strategy to assemble a diversified portfolio of highly prospective nickel-copper-cobalt projects that were located in countries with the Rule-of-Law and that should demonstrate sustainable economics assuming conservative long-term commodity prices. As a result of this work, NAN has acquired three new projects in Ontario which include: the Lingman Nickel Project, covering a portion of the Archean aged Lingman Lake Greenstone Belt and the Quetico Nickel Project which is known to host intrusions with Ni-Cu-Co-PGM mineralization related to a late 2690 Ma Archean magmatic event and the 1110-1090 Ma Proterozoic Mid-continent Rift. On September 25, 2019, the Company entered into an agreement to earn a 100% interest in the Loveland Nickel property in the Timmins area of Ontario and subsequently completed a 4-hole program for 1,086 metres of diamond drilling, with borehole electromagnetic (BHEM) surveys on the project. Based on the result of the exploration program, the management elected not to proceed with further exploration on the property and terminated the agreement.
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On July 9, 2020, the Company announced its ownership position in a private company, Premium Nickel Resources (“PNR”) to have direct exposure to Ni-Cu-Co opportunities in the South African region. PNR has submitted an Indicative Offer to acquire the assets, currently in liquidation, formerly operated by BCL in Botswana on June 30, 2020 and was selected as the preferred bidder on February 16, 2021. Subsequently on March 24, PNR signed an Exclusivity Memorandum of Understanding (“MOU”) with the Liquidator which will govern a six-month exclusivity period to complete additional engineering work and related purchase agreements on the assets. NAN provides technical and management support to PNR through a Services Agreement and a Consulting Agreement. The CEO, CFO and the chair of NAN’s Board were appointed to be the CEO, CFO and the Chair of PNR. NAN currently owns 9.94% of PNR upon a further investment of $100,400 on March 23, 2021 and has a 5-year Warrant to purchase an additional 15% of PNR for USD $10 million.
Financing Activities
During the three months period ended March 31, 2021, the Company issued 6,278,219 common shares and received $665,135 in proceeds from the exercise of 6,278,219 warrants.
On April 20, 2021, the Company closed the previously announced and oversubscribed non brokered private placement consisting of an aggregate of 8,290,665 units of the Company (the “Units”) at a price of $0.24 per Unit, for aggregate gross proceeds of $1,989,759.60 Each Unit consists of one common share in the capital of the Company and one half transferable common share purchase warrant (“Warrant”) of the Company. Each full Warrant entitles the holder to acquire one common share of the Company at any time prior to 5:00 p.m. (Toronto time) on the date that is twenty-four (24) months following its issuance date, at a price of $0.35.
In connection with the private placement, the Company paid eligible finders (the “Finders”): (i) cash commission equal to 6% of the gross proceeds raised from subscribers introduced to the Company by such Finders, being an aggregate of $57,189.62, and (ii) a number of common share purchase warrants (the “Finder Warrants”) equal to 6% of the units attributable to the Finders under the private placement, being an aggregate of 238,289 Finder Warrants. Each Finder Warrant entitles the Finder to acquire one common share of the Company for a period of twenty-four (24) months following its issuance date, at an exercise price of $0.35.
Corporate Activities
On February 26, 2021, the Company announced that it has appointed Mr. John Hick as an independent Director of the Board of the Company. Furthermore, the Company granted incentive stock options to certain directors, officers, employees and consultants of the Company to purchase up to 3,185,000 common shares in the capital of the Company pursuant to the Company’s stock option plan. All of the options are exercisable for a period of five years at an exercise price of $0.32 per share.
Maniitsoq Nickel-Copper-PGM Project, Southwest Greenland
The Greenland properties currently being explored for nickel-copper-cobalt-PGM sulphide by the Company have no mineral resources or reserves. The Maniitsoq project is centered 100 kilometres north of Nuuk, the capital of Greenland which is a safe, stable, mining-friendly jurisdiction. The centre of the project is located at 65 degrees 18 minutes north and 51 degrees 43 minutes west and has an arctic climate. It is accessible year-round either by helicopter or by boat from Nuuk or Maniitsoq, the latter located on the coast approximately 15 kilometres to the west. The deep-water coastline adjacent to Maniitsoq is typical of Greenland’s southwest coast which is free of pack ice with a year-round shipping season. The optimum shipping conditions are due to the warming Gulf Stream flowing continuously past the south west coastline of Greenland. There is no infrastructure on the property; however, the Seqi deep water port and a quantified watershed for hydropower are located peripheral to the project.
The Maniitsoq property is centred on the 75 kilometre by 15 kilometre Greenland Norite Belt which hosts numerous high-grade nickel-copper sulphide occurrences associated with mafic and ultramafic intrusions. Between 1959 and 2011, various companies carried out exploration over portions of the project area. The most extensive work was carried out by Kryolitselskabet Øresund A/S Company (“KØ”) who explored the project area from 1959 to 1973. KØ discovered numerous surface and near surface nickel-copper sulphide occurrences and this work was instrumental in demonstrating the nickel prospectivity of the Greenland Norite Belt.
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The Company acquired the Maniitsoq project because it has potential for the discovery of significant magmatic sulfide deposits in a camp-scale belt. The Company believed that modern, time-domain, helicopter-borne electromagnetic (EM) systems would be more effective at detecting nickel sulphide deposits in the rugged terrain of Maniitsoq than previous, older airborne fixed wing geophysical surveys available to previous explorers. In addition, modern, time domain surface and borehole EM systems could be used to target mineralization in the sub-surface.
The Maniitsoq property consists of three exploration licences, Sulussagut No. 2011/54 and Ininngui No. 2012/28 comprising 2,689 and 296 square kilometres, respectively and the Carbonatite property No. 2018/21 (63 km2).
During the FY 2020, the Greenland Mineral Licence & Safety Authority (MLSA) granted the Company two distinct one year period license extensions for all three exploration licences, and reduced exploration obligations to zero for both 2020 and 2021.
Sulussugut Licence (No. 2011/54) was granted by the Bureau of Minerals and Petroleum (“BMP”) of Greenland on August 15, 2011 and valid for 5 years until December 31, 2015 providing the Company meets the terms of the licence, which includes that specified eligible exploration expenditures must be made. The application for the second 5-year term on the Sulussugut Licence was submitted to the MLSA which was effective on April 11, 2016. The granting of two one-year period extensions provides for the renewal period ending December 31, 2022.
Ininngui Licence (No. 2012/28) is contiguous with the Sulussugut Licence and was granted by the BMP of Greenland on March 4, 2012. The Ininngui Licence was valid for 5 years until June 30, 2017. The application for the second 5-year term on the Ininngui Licence was submitted to the MLSA which was effective March 14, 2017. The granting of two one-year period extensions provides for the renewal period ending December 31, 2023.
Carbonatite Licence (No.2018/21) was granted by the BMP of Greenland on March 4, 2018 for exclusive exploration rights of an area located near Maniitsoq in West Greenland. The Company paid a licence fee of $6,523 (DKK 31,000) upon granting of the Carbonatite Licence. The Carbonatite Licence is valid for 5 years. The granting of two one-year period extensions provides for the renewal period ending December 31, 2024.
Details of required work expenditures and accrued work credits for the above three licences are tabulated and given below in Table 1.
The Greenland MLSA, in two distinct iniatives, has adjusted the minimum required exploration commitment for the above three licences to DKK 0 for the years 2020 and 2021 and adjusted the licence expiry dates and the banked credits carry forward period by two years.
For all licences, future required minimum eligible exploration expenses will be adjusted each year on the basis of the change to the Danish Consumer Price Index.
For all licences, at the expiration of the second licence period (years 6-10), the Company may apply for a new 3-year licence for years 11 to 13. Thereafter, the Company may apply 3 times for additional 3-year licences for a total of 9 additional years. The Company will be required to pay additional licence fees and will be obligated to incur minimum eligible exploration expenses for such years.
The three licences, 2011/54, 2012/28 and 2018/31 have sufficient accrued work credits to keep the property in good standing until December 2023.
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Table 1: Exploration commitment and credits at the end of 2020 (All amounts in table are expressed in thousands of DKK)
| Sulussugut Licence 2011/54 | Ininngui Licence 2012/28 | Carbonatite Licence 2018/21 | ||||||||||
| Area | 2689 km2 | 296 km2 | 63 km2 | |||||||||
| Valid until | December 31, 2021 | December 31, 2022 | December 31, 2023 | |||||||||
| Annual licence fee DKK | 41 | 41 | 31 | |||||||||
| Total credit available | ||||||||||||
| Credit from previous years | 283,080 | 30,282 | 10,497 | |||||||||
| Approved exploration expenditures (2020) | 865 | 143 | 48 | |||||||||
| Exploration obligation (2020) | - | - | - | |||||||||
| Total Credit DKK | 283,945 | 30,425 | 10,545 | |||||||||
| Carry Forward Period: | ||||||||||||
| From 2017 until December 31, 2021 | 201752 | 19,534 | - | |||||||||
| From 2018 until December 31, 2022 | 79,604 | 10,465 | 9,563 | |||||||||
| From 2019 until December 31, 2023 | 1,724 | 283 | 934 | |||||||||
| From 2020 until December 31, 2024 | 865 | 143 | 48 | |||||||||
| Total DKK | 283,945 | 30,425 | 10,545 | |||||||||
| Average Annual Rate DKK to CAD | 0.2070 | 0.2070 | 0.2070 | |||||||||
| Accumulated exploration credits in CAD (,000) | $ | 58,777 | $ | 6,298 | $ | 2,183 | ||||||
West Greenland Prospecting Licence – 2020/05
A new prospecting licence, No. 2020/05, for West Greenland was awarded by the Greenland government on March 18, 2020. The Prospecting Licence is in effect until December 31, 2024.
Exploration and Development Activities
In 2019, the Company had planned to return to Maniitsoq and other regional target areas to continue our systematic exploration program. Unfortunately, the Company was not successful in completing a treasury financing within the lead-time required for the logistical planning in Greenland. The initial 2019 work program for Maniitsoq project had been postponed to the 2020 summer season subsequent to a successful financing capable of supporting an integrated exploration program. However, the 2020 and 2021 summer program was further delayed due to the COVID-19 travel restrictions.
Hydropower assessment of watershed 06.H was continued with the emplacement of devices to measure the seasonal variability of water levels in Lake Taserssuatsiaq and to provide a framework for further surveys over the next 3-5 years.
Outlook - Exploration and Development for 2021-2023
Management is recommending a three-year exploration plan for Maniitsoq with the objective of maximizing the potential value of the asset while extending the period that the Company maintains control of the project. The impact of Covid-19 will prevent the planning and execution of field work in Greenland. The Greenland Government eliminated the expenditure requirements for both 2020 and 2021. Management will assess the situation with the expectation of implementing the three-year plan starting in 2021.
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| 2021 | – Apply the Company’s cumulative knowledge to Maniitsoq and other areas of Western Greenland and identify the geoscience data gaps to effective targeting. |
| – Continue the assessment of hydropower development within watershed 06.H. | |
| 2022 | – Acquire the additional required geoscience data and additional properties of merit; conduct test drilling if any priority targets are identified and drill ready. |
| 2023 | – Execute a major drill campaign of prioritized targets. |
This three-year plan will allow for the generation of priority drill targets while drawing down on the three years of exploration credits (Table 1). The drilling expenditure in 2022 would extend the Company’s 100% ownership of the Maniitsoq project until 2025.
Exploration History
The Company undertook numerous exploration activities and completed various mineralogical studies during the period from 2012 to 2019, including 52,895.16 metres of drilling in 189 holes and 13,497 line-km of SkyTEM and VTEM surveys. A National Instrument 43-101 was completed on the Maniitsoq property in March 2016 and updated in March 2017. QEMSCAN mineralogical analyses on drill core samples documenting favourable liberation and recovery characteristics for Maniitsoq mineralization was reported in April 2016.
NAN has progressively implemented new exploration methodologies and tools in an effort to refine targeting at the property and borehole scales. These include the introduction of helicopter-borne electromagnetic and magnetic surveys, modern surface-based electromagnetic, induced polarization, and gravity surveys, application of Worldview-3 satellite imagery, implementation and consistent use of borehole electromagnetic methods, collection of oriented drill core, optical televiewer data and downhole physical properties; structural studies, geochemical studies and 3D modelling. The compilation and integration of data has resulted in a vast improvement in the understanding of the geology of the GNB and it resulted in the discovery of surface and sub-surface nickel-copper sulphide occurrences and the expansion of mineral zones comprising the Mikissoq, Spotty Hill, Imiak Hill, Fossilik, P-008, P-013, and P-053, four of which remain open in one or more directions. In addition, nickel sulphide mineralization has been intersected at a number of other locations throughout the Greenland Norite Belt, including at the P-004, P-013, P-030, P-032, P-053, and Pingo targets (figure 1). Exploration continues to extend known zones of mineralization and provides a framework for future discoveries.
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Figure 1. Location of Mineralized targets.
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Carbonatite
On May 4, 2018 the Company was awarded an exploration licence (2018/21; “Carbonatite”) over a highly prospective block of ground to the west of the Fossilik Intrusion in an area which has very limited nickel exploration and contains the Qeqertassaq carbonatite complex.
The work program in 2018 consisted of compilation, surface sampling for geochemistry, surface EM work in areas with possible norite-associated mineralization and drilling to evaluate the potential for strategic metals (niobium, tantalum, and rare earth elements) in areas outside of the focus areas of historic drilling.
A report on the strategic metal potential of the Qeqertassaq carbonatite was commissioned, and emphasis was placed on understanding the upside potential of the light rare earth element vein system, the niobium mineralization, and the potential for tantalum mineralization is association with soeviite series rocks.
Exploration Results
Exploration programs on the Maniitsoq Property completed between 2011 and 2018 expanded the footprint of the historic mineral occurrences at the Imiak Hill Complex and Fossilik and resulted in the discovery of several new occurrences of mineralized norite in the belt. The Company is currently working to determine the significance of these zones.
Imiak Hill Complex
The Imiak Hill Complex comprises three separate mineralized norite intrusions termed Imiak Hill, Spotty Hill and Mikissoq within an ~3 km2 area of the Maniitsoq property (figure 2).
Imiak Hill
The up-dip extent of the Imiak Hill mineralization, originally discovered by KØ, is marked by a surface gossan approximately 80 by 100 metres in size. Mineralization consists of two parallel zones, defined over a maximum strike length of 25 to 30 metres and dip extent of 270 meters. The mineral zone at Imiak is closed-off by exploration, but it remains possible that structurally detached segments of the norite may exist at depth. Mineralization is hosted in norite and leuconorite and consists of a network of remobilized semi-massive to massive sulphide veins and breccia veins collectively ranging from approximately 0.3 to 13.6 metres in width. Mineralization increases in grade with depth and sulphides consist of medium to coarse grained pyrrhotite, pentlandite, pyrite, and chalcopyrite. Semi-massive to massive sulphide samples typically grade 3 to 7 % Ni, 0.1 to 0.2 % Co and less than 0.1 g/t Pt+Pd+Au. Copper values are highly variable ranging from less than 0.1 to 6.3 percent; this broad range suggests that secondary re-distribution of mineralization into noritic rocks has occurred.
Assays highlights at Imiak Hill include:
| MQ-13-026: | 25.51 m @ 3.25% Ni, 0.48% Cu | |
| MQ-13-028: | 24.75 m @ 3.19% Ni, 1.14% Cu | |
| MQ-14-072: | 16.35 m @ 2.51% Ni, 0.77% Cu |
Spotty Hill
The Spotty Hill nickel-copper sulphide mineralization comprises a zone of disseminated to blebby magmatic sulphide containing intersections of semi-massive to massive stringer and vein sulphides hosted in melanorite. The up-plunge extent of the zone is represented by irregularly distributed surface gossans. The zone typically varies between two and 20 metres in width and has been intersected by drilling over a plunge distance of 400 metres. The down-dip extent of the zone is interpreted to be 150 metres in the highest-grade part of the zone where most of the drilling is concentrated. The Spotty Hill mineralization is characterized by elevated platinum and palladium; typical assays returned values between 0.1 and 1.0 g/t Pt+Pd+Au. Grades of the precious metals typically increase with increase in nickel grade. Copper concentrations are commonly between 0.1 and 0.5 percent but can be erratically distributed with some mineralized samples containing less than 0.1 % Cu and others up to 2 % Cu. Cobalt values are commonly between 0.01 and 0.05 percent.
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Assay highlights at Spotty Hill include:
| MQ-14-062: | 66.00 m @ 0.61% Ni, 0.16% Cu, 0.22 g/t Pt+Pd+Au Incl. | |
| 8.55 m @ 2.98% Ni, 0.59% Cu, 0.86 g/t Pt+Pd+Au | ||
| MQ-14-065: | 61.29 m @ 0.66% Ni, 0.17% Cu, 0.25 g/t Pt+Pd+Au Incl. | |
| 10.60 m @ 1.69% Ni, 0.34% Cu, 0.50 g/t Pt+Pd+Au | ||
| MQ-15-075: | 15.55m @ 1.06% Ni, 0.24% Cu, 0.31 g/t Pt+Pd+Au incl. | |
| 6.00 m @ 1.77% Ni, 0.23% Cu, 0.46 g/t Pt+Pd+Au | ||
| MQ-16-121: | 4.75 m @ 1.59% Ni, 0.30% Cu, 0.66 g/t Pt+Pd+Au | |
| MQ-17-143: | 7.80 m @ 1.35% Ni, 0.26% Cu, 1.85 g/t Pt+Pd+Au incl. | |
| 5.00 m @ 1.69% Ni, 0.33% Cu, 2.71 g/t Pt+Pd+Au |
Mikissoq
Mineralization at Mikissoq is hosted in two norite intrusions separated by orthogneiss. The shallow zone correlates with the historic Mikissoq gossan containing up to 3.73% Ni in surface grab samples and drilling has outlined mineralization over a strike extent of 25 metres and to a maximum depth of 95 metres below surface. Intersections range from 2 to 20 metres in width. Mineralization consists of disseminated to blebby sulphides with intervals of locally remobilized vein, stringer, and breccia vein sulphides, as well as sulphide fracture fillings. Assay values for the shallow mineralization vary widely depending on the amount of remobilized sulphides present in the sample. Semi-massive to massive sulphide samples from borehole MQ-13-029 returned values of approximately 4.5 to 7.5 % Ni, 0.15 to 0.65 % Cu, 0.1 to 0.2 % Co and up to 0.3 g/t Pt+Pd+Au. Disseminated sulphide mineralization with localized sulphide veins and stringers in borehole MQ-13-027 returned an average value of 0.7 % Ni and 0.3 % Cu.
The top of the deeper sulphide zone is located approximately 100 metres below the bottom edge of the shallow mineralization and has been intersected over a dip extent of 105 metres by three boreholes on one section. Intersections range from 21 to 38 meters in true width. The mineralization consists of coarse-grained magmatic sulphide disseminations, blebs, and patches, with local stringers and veins of remobilized sulphide mineralization. The deeper sulphide lens averages between 0.5 and 1.1 % Ni, 0.25 and 0.55 % Cu, and 0.01 and 0.03 % Co. The intervals with the highest sulphide content, including remobilized sulphides, typically grade between 1 and 4 % Ni, 0.25 and 0.65 % Cu, as well as 0.02 and 0.08 % Co. Combined Pt+Pd+Au concentrations are typically less than 0.2 g/t.
The trend of the Mikissoq mineral zone is open and untested at depth.
Assay highlights at Mikissoq include:
Upper Zone
| MQ-13-029: | 9.99 m @ 4.65% Ni, 0.33% Cu | |
| MQ-14-073: | 61.35 m @ 0.63% Ni, 0.18% Cu incl. | |
| 2.6 m @ 1.79% Ni and 0.54% Cu and | ||
| 4.6 m @ 1.27% Ni and 0.27% Cu and | ||
| 6.56 m @ 1.59% Ni, 0.22% Cu | ||
| Lower Zone | ||
| MQ-16-113: | 53.25m @ 0.81% Ni, 0.36% Cu incl. | |
| 5.15m @ 2.56% Ni, 0.37% Cu | ||
| MQ-16-117: | 74.05m @ 1.08% Ni, 0.54% Cu incl. | |
| 13.65m @ 1.84% Ni, 0.64% Cu | ||
| MQ-16-118: | 47.00m @ 0.51% Ni, 0.25% Cu incl. | |
| 15.00m @ 1.03% Ni, 0.32% Cu |
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Figure 2. Plan Map Imiak Hill Complex (IHC) showing the locations of Imiak Hill, Spotty Hill, and Mikissoq.
Fossilik Intrusion
The Fossilik Intrusion is one of the largest and most continuous GNB Intrusions. It is located eight kilometres to the southwest of the Imiak Hill Complex; it is approximately five square kilometres in size and contains or is associated with several zones of mineralization, including a large area of surface mineralization at the southwestern end of the intrusion (figure 3). The main zone of mineralization is P-058, and this corresponds to the historic Fossilik II showing.
The P-058 mineralization to the southwest of the Fossilik Intrusion consists of a tabular zone of mineralization that has been intersected over a strike extent of 100 metres. A secondary narrow parallel zone of remobilized and magmatic sulphides occurs in the footwall and both the main and footwall zones are interpreted to be open down-dip and down-plunge. The overall footprint of the mineralization is interpreted to extend from surface to a vertical depth of 695 metres based on borehole EM (BHEM) results. The mineralization, which is variably hosted in norite or adjacent gneisses, consists of both disseminated to blebby magmatic sulphides and high grade remobilized massive to breccia sulphide veins and stringers. Individual remobilized massive and breccia sulphide veins range from a few centimetres to about one metre in width. Remobilized sulphide samples return high nickel and/or copper grades of up to 6.8 % Ni and 7.7 % Cu and commonly contain between 0.1 and 0.2 % Co. Norite-hosted disseminated to blebby mineralization observed in boreholes MQ-15-077 and MQ-16-105 grades between 0.55 and 0.75 % Ni and 0.19 and 0.27 % Cu, respectively.
The P-058 mineral zone remains open at depth and may represent a structurally detached portion of the keel of the Fossilik Intrusion.
Assay highlights at Fossilik include:
| MQ-14-054: | 5.58 m @ 1.72% Ni, 0.26% Cu | |
| MQ-16-105: | 10.20 m @ 3.41% Ni, 0.28% Cu incl. | |
| 4.10 m @ 4.85% Ni, 0.29% Cu | ||
| MQ-16-111: | 3.06 m @ 3.93% Ni, 0.25% Cu | |
| MQ-17-146: | 10.70 m @ 2.53% Ni, 1.26% Cu incl. | |
| 3.50 m @ 4.97% Ni, 2.30% Cu and | ||
| 2.20 m @ 3.35% Ni, 1.31% Cu |
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Figure 3. Plan Map showing the geology of the Fossilik Intrusion and the distribution of mineral occurrences and disseminated sulphide mineralization.
CSR, Environment and Infrastructure
Hydropower Development – A watershed prospecting licence for the assessment and development of hydropower resources at Maniitsoq was awarded by the Ministry of Industry, Labour, Trade and Energy of the Greenland Government in March 2017. The two-year licence provides for the exclusive right to assess and develop potential hydropower resources. The licence was renewed for a three-year period expiring in July of 2021. An application for a new watershed prospecting permit is in preparation. EFLA Consulting Engineers completed a feasibility analysis of hydropower development within watershed 0.6H in January 2018. The analysis of hydropower within watershed 0.6H identifies two subordinate watersheds 7038-001 F03 and 7038-001 F04 with the capacity to supply a 12 MW base load and an 18 MW maximum load and generate 96 GWh per annum for the Maniitsoq Project. The two watersheds included in this assessment have the capacity to supply the required hydroelectricity at an installed cost of $5.621 USD/kW and $5.049 USD/kW respectively at a CAPEX of between $101.2 and $90.9 million USD respectively. Operating expenses are 1-2% of CAPEX. Both watersheds encapsulate or are close to priority nickel sulphide mineralized zones and the Seqi Port.
Corporate Social Responsibility - The 2018 program for Corporate Social Responsibility was completed on August 24 with community presentations in Sisimiut, Maniitsoq, Atammik and Napasoq and presentations to the Mineral Licencing and Safety Authority and the Ministry of Industry and Energy of the Greenland government in Nuuk. The National Association for Hunters and Fishers (KNAPF) also located in Nuuk was updated on 2018 exploration activities. The Company renewed its support for the annual Greenland mineral hunt.
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Environmental Surveys – Sampling to establish baseline geochemical values for low total dissolved solids freshwaters, fauna and flora was continued in areas of active exploration and in the area of watershed 0.6H. Watershed survey area surveys were undertaken in support of ongoing hydropower assessments that are ongoing. All surveys have been undertaken by qualified personnel of Golder Associates (Copenhagen). Final reports have been received for both environmental surveys and weather station databases. Weather stations have been removed from the field as sufficient data has been acquired to prepare a model for wind-related particulate dispersion in the Maniitsoq area.
Tailings Facility - Discussions were held with the MLSA and the Greenland Department of Nature, Environment and Energy regarding the process for selecting and developing a tailings facility to support nickel mining and milling activities. This process is required to be undertaken as part of the submission of an exploitation licence for extraction of nickel ore.
Canada Nickel Projects - Sudbury, Ontario
Post Creek Property
The Company entered into an option agreement in April 2010, subsequently amended in March 2013, to acquire rights to Post Creek Property located within the Sudbury Mining District of Ontario. On August 1, 2015, the Company has completed the required consideration and acquired 100% interest in the property. The Company is obligated to pay advances on the NSR of $10,000 per annum, which will be deducted from any payments to be made under the NSR.
The property is located 35 kilometres east of Sudbury in Norman, Parkin, Alymer and Rathburn townships and consists of 73 unpatented mining claim cells in two separate blocks, covering a total area of 912 hectares held by the Company. The center of the property occurs at UTM coordinates 513000mE, 5184500mN (WGS84, UTM Zone 17N). The Post Creek property lies adjacent to the Whistle Offset Dyke Structure which hosts the past–producing Whistle Offset and Podolsky Cu-Ni-PGM mines. Post Creek lies along an interpreted northeast extension of the corridor containing the Whistle Offset Dyke (figure 4). Offset Dykes and Footwall deposits account for a significant portion of all ore mined in the Sudbury nickel district and, as such, represent favourable exploration targets. Key lithologies are Quartz Diorite and metabreccia related to Offset Dykes and Sudbury Breccia associated with Footwall rocks of the Sudbury Igneous Complex which both represent potential controls on mineralization.
Outlook – Exploration and Development for 2021
The objective of further compilation work on the Post Creek Project was to provide a basis for prospecting and sampling of parts of the property that have received incomplete historic exploration. The targets comprised radial and concentric offset dykes of the Sudbury Igneous Complex which are known to be associated with high grade Cu-Au-PGE sulfide mineralization.
2021 – Prospect and search for mineralization and/or quartz diorite on parts of the Post Creek Properties that remain overlooked by previous exploration. Complete geophysical surveys over prospective target areas, and conduct test drilling if any priority targets are identified and drill ready.
This plan will allow for the generation of priority drill targets while drawing down on the available exploration credits. The work expenditure in 2021 would extend the Company’s 100% ownership of the Post Creek Project into 2025 and beyond.
Exploration History
(All drill intercepts described in this section refer to core lengths not true widths)
Previous operators completed geological, geophysical and Mobile Metal Ion soil geochemical surveys. Highlights of this work included:
| ● | A drill intersection returning 0.48% copper, 0.08% nickel, 0.054 grams/tonne palladium, 0.034 grams/tonne platinum and 0.020 grams/tonne gold over a core length of 0.66 metres; and | |
| ● | A grab sample from angular float which returned 0.83% nickel, 0.74% copper, 0.07% cobalt, 2.24 grams/tonne Pt and 1.05 grams/tonne Pd. |
A NI 43-101 compliant Technical Report was completed by Dr. Walter Peredery, formerly of INCO, in 2011 and subsequently accepted by the Securities Commission.
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During the period of 2011 to 2016, the Company carried out exploration programs comprising ground geophysics (magnetics and electromagnetics), diamond drilling (1,533 metres in 7 drill holes), borehole electromagnetic surveys, georeferencing of selected claim posts, prospecting, trenching, geological mapping, sampling and petrographic studies. This work has identified new occurrences of Quartz Diorite dyke and Sudbury Breccia, both of which are geologically significant lithologies known to host ore deposits associated with the Sudbury structure. Ground traverses, trenching and mapping carried out in 2016 outlined a Sudbury Breccia belt of at least 300 metres by 300 metres in size which lies along the same trend at the Whistle Offset Dyke located on KGHM property to the southwest. These findings support the potential for the Post Creek property to host both Footwall and Offset Dyke type deposits.
In 2017, the Company initiated support for a two-year MITAC project whereby an M.Sc. student carried out field and laboratory study aimed at understanding the mineral resource potential of the Post Creek Property. The field mapping gram expanded the area of Sudbury Breccia.
A two-hole drill program was completed in 2018 and reported in 2019 with the objectives of assessing magnetic and electromagnetic anomalies within a corridor of breccias and quartz diorite extending radially away from the Whistle Offset and to provide a platform for downhole geophysics. Both drill holes encountered a thick sequence of mafic volcanic rocks; quartz diorite, partially melted country rocks or footwall-style mineralization were not encountered. DDH PC-18-21 did intersect a thick interval of volcanogenic massive sulphide-type sphalerite mineralization including 7.50 m @ 3.55% zinc and 0.82 ppm silver. Multiple BHEM anomalies were detected both north and south of the zinc mineralization and are potential drill targets for volcanogenic massive sulfide mineralization.
In 2020, prospecting work to the immediate north and west of the drilling completed on the CJ Offset identified quartz diorite boulders and an outcrop of grey gabbro with 0.17% Ni, 0.55% Cu, and 0.26g/t Au+Pt+Pd. Sampling completed on Cu-Au mineralization within the area of Sudbury breccia returned up to 1.975% Cu and 0.873 ppm Au in two different samples, but no significant Ni, Pt, or Pd.
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Figure 4. Location of the Post Creek Project and the Sudbury Breccia Zone.
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Corporate Social Responsibility
The Company has established excellent working relationships with the Wahnapitae First Nation (“WFN”) at Capreol (Ontario) commencing with community presentations and followed up with ongoing contact with the Resource and Environmental officer. North American Nickel financially supported the 2019 Pow-Wow celebration held at Capreol. Exploration work on the property typically includes assistance of casual labour hired from the WFN community.
Halcyon Property
As at the date of this MD&A, the Company holds 100% interest in Halcyon Property and is obligated to pay advances on the NSR of $8,000 per annum, which will be deducted from any payments to be made under the NSR.
The property is located 35 km northeast of Sudbury in the Parkin and Aylmer townships, and consists of 63 unpatented mining cells for a total of 864 hectares. It is readily accessible by paved and all-weather gravel road. Halcyon is adjacent to the Post Creek property and is approximately 2 km north of the producing Podolsky Mine of FNX Mining. Previous operators on the property defined numerous conductive zones based on induced polarization (I.P.) surveys with coincident anomalous Mobile Metal Ions soil geochemistry. Base and precious metal mineralization have been found in multiple locations on the property but follow-up work was never done. The former producing Jon Smith Mine (nickel-copper-cobalt-platinum) is situated 1 km North of the property.
Outlook – Exploration and Development for 2021
The objective of further compilation work on the Halcyon Project was to provide a basis for prospecting and sampling of parts of the property that have received incomplete historic exploration. The targets comprised radial and concentric offset dykes of the Sudbury Igneous Complex which are known to be associated with high grade Cu-Au-PGE sulfide mineralization.
The Halcyon portion of the property has 2 priority areas flagged for follow-up in 2021, viz: 1. Possible Sudbury type quartz diorite in historic drill core associated with IP chargeability and B horizon soil Cu-Ni anomalies; 2. Two areas with minimal historic work that rest on the corridor projection of the Milnet Fault Offset of the Parkin QD with no EM or IP coverage. In these target areas, NAN will be prospecting for mineralization and/or radial/concentric offsets dykes located along stratigraphic horizons similar to those controlling the inflexion in the Parkin Offset at the historic Milnet Deposit.
2021 – Prospect and search for mineralization and/or quartz diorite on parts of the Halcyon Property that remain overlooked by previous exploration. Complete geophysical surveys over prospective target areas, and conduct test drilling if any priority targets are identified and drill ready.
This plan will allow for the generation of priority drill targets. The work expenditure in 2021 would extend the Company’s 100% ownership of the Halcyon Project through 2025 and beyond.
Exploration History
During the period 2011 to 2016, the Company carried out a small amount of exploration including ground geophysics (magnetics and electromagnetics), diamond drilling (301 metres in 1 drill hole), a borehole electromagnetic survey, georeferencing of selected claim posts, prospecting, geological mapping, sampling and petrographic studies. The single hole located on the southeast corner of the property was drilled with the purpose of providing geological information and to provide a platform for borehole pulse EM (“BHPEM”). No anomalies were detected although quartz diorite breccia and partial melt material with 2-3% disseminated pyrrhotite and chalcopyrite was intersected over short core lengths. The property is strategically located adjacent to the Company’s Post Creek property, located immediately to the south, where occurrences of both quartz diorite and Sudbury Breccia have been identified. This program was carried out concurrently with similar work on the Post Creek Property. Assay, whole rock and thin section samples were collected for analysis and study. Results have been received and compiled.
Work in 2019 and 2020 consisted of compilation and target generation.
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Quetico Property
During the year ended December 31, 2018, the Company acquired 809 claims within the Thunder Bay Mining District of Ontario (Figure 5). Cells were acquired to assess (i) the Quetico Sub-province corridor, which hosts intrusions with Ni-Cu-Co-PGM mineralization related to a late 2690 Ma Archean magmatic event, and (ii). the Neoproterozoic (1100 Ma MCR) magmatic event and related intrusions. Three clusters of claims cells, labeled Quetico South, East and West cover magnetic features interpreted to represent small differentiated intrusions. The review of government geological and geophysical data, and historic assessment file data was completed in 2019 and recommendations for additional exploration work were prepared. An application was lodged with the Mining Lands Administration of the Ontario Government in April 2020 to extend the tenure of the claim blocks due to impact from COVID-19 on implementation of exploration work. A one-year exclusion was granted on September 1, 2020.
Figure 5: Quetico Property Location Map
A short program of prospecting and outcrop sampling was completed in June 2020 to search for mineralization related to early mid-continent rift peridotite intrusions and Archean pyroxenites. Targets comprising, magnetic responses, prospective geology and geochemical anomalies, were examined on all three clusters of claim cells.
Exploration was focussed on the East block where previous work identified mafic rocks with geochemical signatures similar to those that host the Current Lake deposit, located 10 km to the east (Figure 6). The Current Lake and Escape Lake deposits a total indicated resource of 16.285 million tonnes at 3.5 g/t PdEq and an inferred resource of 9.852 million tonnes at 2.1 g/t PdEq (2021 update to NI 43-101 Technical Report, Clean Air Metals Inc.).
Sampling in the East block adjacent to Clean Air Metals’ Current Lake Property identified outcropping peridotite and gabbroic rocks with trace sulphide. The geochemical signature of the peridotite is similar to the differentiated Disraeli, Hele and Seagull intrusions based on a comparison with historic assessment report and government data. There is no known electromagnetic (EM) survey coverage in the area and accordingly the next phase of exploration will include airborne or surface EM survey work. These surveys will be designed to detect conductive responses of potential nickel sulphide mineralization associated with the ultramafic intrusions.
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Figure 6: Quetico East Block Proximity to Current Lake Deposit
On the West block, a total of eight magnetic anomalies were investigated. Six anomalies remain unexplained and weakly mineralized magnetic pyroxenite was identified at two locations (Figure 7). A weakly mineralized pyroxenite sample associated with a strong magnetic anomaly has an elevated Au+Pt+Pd content. The configuration of the magnetic anomaly suggests the potential for a 3 km2 ultramafic intrusion and a related feeder-dyke to the west. These intrusions may be separated from a larger intrusion to the east by a keel structure which is a classic target for magmatic sulphide exploration. Future exploration will focus on this intrusion and others that were not prospected in 2020.
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Figure 7: Quetico West Block Location of 2020 Exploration Targets
On the South block, a strong magnetic target was explained by massive magnetite.
Outlook – Exploration and Development for 2021
2021 – Revisit plans to complete either a ground electromagnetic survey or an airborne VTEM survey designed to identify coincident EM responses in association with the magnetic response expected from differentiated mafic-ultramafic intrusions in the Quetico structural zone. Complete geophysical surveys over prospective target areas, and drilling if any priority targets are identified.
The work commitment to hold all 809 claim cells is $323,600, with claims due in April and May of 2021. An application for a one year exclusion has been submitted to the Ontario Ministry, Northern Development and Mines (ENDM) and is currently pending approval. The application was submitted under COVID-19 guidelines and is expected to be approved.
Lingman Lake Property
The Company digitally staked 188 claim cells known as Lingman Lake on April 15, 2019. The property occurs about 65 km South East of Red Sucker Lake First Nation and about 35 km southwest of Sachigo Lake First Nation, approximately 650 km northwest of Thunder Bay. The Lingman Nickel Project, covers a portion of the Archean age Lingman Lake Greenstone Belt that includes tholeiitic-komatiitic rocks and sulphide facies iron formation. Historic field work has identified ultramafic rocks with elevated nickel and copper in grab samples and untested VTEM anomalies.
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Work commitments of $75,200 are due prior to April 15, 2021. An application for a one year exclusion has been submitted to ENDM and is currently pending approval. The application was submitted under COVID-19 guidelines and is expected to be approved.
Loveland (Enid Creek) Nickel Property
The Loveland Nickel Property is located 30 km northwest of Timmins and has year-round access. The property is underlain by a mineralized differentiated mafic-ultramafic complex that is host to the historic Enid Creek showing. Analyses of a historic drill sample by the Ministry of Northern Development and Mines in Ontario returned 2.13% Ni, 0.19% Cu, 0.32 ppm Pt and 2.06 ppm Pd. A VTEMMAX survey completed in 2017 identified several new and untested conductors. One of the targets extends for 950 m in strike length and is located to the southeast along strike from the known mineralization. The exploration target is high grade nickel mineralization located in a depression or embayment structure at the base of the intrusion.
On September 25, 2019, the Company entered into earn in agreement with International Explorers and Prospectors Inc. whereby the Company may acquire a 100% interest in the Loveland Nickel. Consideration for the acquisition is $1,525,000 in cash, 300,000 common shares and $4,500,000 in work commitments over a 5-year period. The TSX Venture Exchange approved the transaction for filing on October 24, 2019. During the year ended December 31, 2019, 300,000 common shares were issued as a purchase consideration with a value of $60,000.
Exploration and Development in 2020
A 4-hole drill program with downhole BHEM survey work was completed and reported in April 2020. The exploration tested a series of conductors identified from a VTEMMAX survey completed in 2017. No significant lateral or depth extension of mineralization was encountered. The conductive plates associated with the interpreted lateral extent of the contact of the differentiated intrusion was explained by pyrrhotite stringers in the country rocks. DDH LN25-20-002, drilled to test the down-dip extent of historic mineralization, intersected gabbroic rocks of the Enid Creek Gabbro Complex (ECGC), and narrow intervals of mineralization with up to 0.18% Cu, 0.13% Ni, and 0.23g/t Pd over 0.7m. A subsequent borehole EM survey indicated that the center of conductivity is located up-dip towards the known historic mineralization.
On June 1, 2020, the Company announced it has elected not to proceed with further exploration at Loveland and has terminated the agreement. Accordingly, all acquisition and exploration costs incurred for a total of $437,897 were written off as of December 31, 2020.
Project Pipeline
Due to long term nickel market forecasts indicating a supply deficit developing, the Company believes that it is a good time to acquire nickel exploration and development projects that could be developed assuming conservative long-term nickel prices. The Company maintains a nickel project generation activity focusing on high prospectivity projects in countries with the Rule of Law and reasonable development economics.
In the context of rising nickel prices and positive developments in the electric vehicle market, the Company will look to enhance shareholder value by aggressively expanding its nickel sulphide project pipeline. The Company’s staff are proceeding with compilation work on prospective geological environments related to North American Archean craton margins where structural space controls the development of mafic-ultramafic intrusions. The objective of this work is to identify underexplored or unexplored open system intrusions where large zones of high-grade sulphide mineralization are controlled within the footprints of very small intrusions. For the past year, the Company has been evaluating opportunities in Africa, including a direct investment in Premium Nickel Resources (PNR), a private Canadian company who has recently awarded exclusivity to acquire the assets, currently in liquidation, formerly operated by BCL in Botswana. In addition, the development of a Moroccan-based subsidiary company is proceeding and will provide an opportunity to assess nickel sulphide potential throughout the country.
Financial Capability
The Company is an exploration and development stage entity and has not yet achieved profitable operations. The business of the Company entails significant risks. The recoverability of amounts shown for mineral property costs is dependent upon several factors including environmental risk, legal and political risk, the existence of economically recoverable mineral reserves, confirmation of the Company’s interests in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete exploration and development, and to attain sufficient net cash flow from future profitable production or disposition proceeds.
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At the end of Q1 2021, the Company had a working capital of $78,030 (Q1 2020 - $60,117) and reported accumulated deficit of $54,326,128 (Q1 2020 - $55,338,740). The Company will require additional funds to continue its planned operations and meet its obligations.
As at March 31, 2021, the Company had $715,896 in available cash (December 31, 2020— $308,151). There are no sources of operating cash flows. Given the Company’s current financial position and the ongoing exploration and evaluation expenditures, the Company will need to raise additional capital through the issuance of equity or other available financing alternatives to continue funding its operating, exploration and evaluation activities, and eventual development of the mineral properties. Although the Company has been successful in its past fund-raising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.
During Q1 2021 year, the Company received additional cash inflow of $665,135 from exercised warrants. On April 20, 2021. the Company closed a private placement consisting of an aggregate of 8,290,665 units of the Company (“Units”) at a price of $0.24 per Unit, for aggregate gross proceeds of $1,989,760.
Selected Financial Information
The amounts are derived from the condensed interim consolidated financial statements prepared under IFRS.
Three months ended March 31, | ||||||||
| In thousands of CDN dollars, except per share amounts | 2021 | 2020 | ||||||
| Net loss | 1,125 | 1,198 | ||||||
| Basic and diluted loss per share | 0.01 | 0.01 | ||||||
| Share capital | 90,534 | 89,006 | ||||||
| Common shares issued | 116,111,867 | 88,690,791 | ||||||
| Weighted average shares outstanding | 113,245,018 | 88,690,791 | ||||||
| Total assets | 40,185 | 39,753 | ||||||
| Investment
in exploration and evaluation assets | 59 | 296 | ||||||
Results of Operations
Net loss of $1,125,442 in Q1 2021 was lower by $72,913 compared to a loss of $1,198,355 in Q1 2020. The higher loss in Q1 2020 was mainly driven by higher general and administrative expenses and higher share-based payments costs during Q1 2020.
Total Assets
Total assets during Q1 2021 increased by a net of $540,517 from the end of FY 2020. The change is mainly attributed to increase in cash of $407,745, further investment in PNR of $83,513, an increase to exploration and evaluation assets of $65,390, an increase in receivables and other current assets of $42,410, offset by a decrease in advance of $50,000, and decrease in equipment of $8,541.
Investment in Exploration and Evaluation Assets
Investment in exploration and evaluation assets relates to the Greenland property and properties in Ontario. During Q1 2021, the Company incurred a total of $65,390 (Q1 2020 - $340,225) in additions to exploration and evaluation assets, of which $38,304 related to Greenland (Q1 2020 - $27,528) and $27,086 to other properties located in Canada (Q1 2020 - $312,697).
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Quarterly Results of Operations
| All amounts in table are expressed in thousands of CDN dollars, except per share amounts | 2021 1st quarter | 2020 4th quarter | 2020 3rd quarter | 2020 2nd quarter | ||||||||||||
| Statement of Loss | ||||||||||||||||
| Interest income | - | - | - | - | ||||||||||||
| Net loss/(gain) | 1,125 | 326 | 409 | 808 | ||||||||||||
| Net loss per share - basic and diluted | 0.01 | 0.00 | 0.00 | 0.01 | ||||||||||||
| Statement of Financial Position | ||||||||||||||||
| Cash, cash equivalents and short-term investments | 716 | 308 | 837 | 86 | ||||||||||||
| Total assets | 40,185 | 39,644 | 39,893 | 39,150 | ||||||||||||
| Net assets | 39,391 | 39,015 | 38,344 | 38,309 | ||||||||||||
| Share capital | 90,534 | 89,627 | 89,630 | 89,006 | ||||||||||||
| Common shares issued | 116,111,867 | 109,833,648 | 109,833,648 | 88,690,791 | ||||||||||||
| Weighted average shares outstanding | 113,245,018 | 109,833,648 | 98,614,107 | 88,690,791 | ||||||||||||
| All amounts in table are expressed in thousands of CDN dollars, except per share amounts | 2020 1st quarter | 2019 4th quarter | 2019 3rd quarter | 2019 2nd quarter | ||||||||||||
| Statement of Loss | ||||||||||||||||
| Interest income | - | - | 4 | 4 | ||||||||||||
| Net loss | 1,198 | 27,007 | 649 | 643 | ||||||||||||
| Net loss per share - basic and diluted | 0.01 | 0.34 | 0.01 | 0.01 | ||||||||||||
| Statement of Financial Position | ||||||||||||||||
| Cash, cash equivalents and short-term investments | 197 | 1,098 | 325 | 1,036 | ||||||||||||
| Total assets | 39,753 | 40,039 | 65,452 | 66,102 | ||||||||||||
| Net assets | 39,117 | 39,431 | 65,092 | 65,741 | ||||||||||||
| Share capital | 89,006 | 89,006 | 88,538 | 88,538 | ||||||||||||
| Common shares issued | 88,690,791 | 88,690,791 | 78,792,860 | 78,792,860 | ||||||||||||
| Weighted average shares outstanding | 88,690,791 | 80,220,829 | 78,792,860 | 78,792,860 | ||||||||||||
Three Months Ended March 31, 2021, and March 31, 2020
A net loss of $1,125,442 in Q1 2021 compared to a net loss of $1,198,355 in Q1 2020 resulted in a decreased loss of $72,913 quarter-over-quarter and was due to the following events:
| ● | Share-based payments were $837,444 during Q1 2021 were lower by $46,803 compared to $884,247 amount during Q1 2020. | |
| ● | General and administrative costs of $261,103 in Q1 2021 were lower by $44,089 compared to $305,192 expenses in Q1 2020. Higher general and administrative expenses in Q1 2020 mainly related to higher salaries and benefits, professional fees and general office expenses. |
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| ● | Property investigation costs were $1,287 in Q1 2021 and were lower by $4,770 compared to $6,057 costs in Q1 2020. | |
| ● | Foreign exchange loss totaled $221 in Q1 2021 and was lower by $542 compared to a foreign exchange loss of $763 in Q1 2020. |
The lower loss in Q1 2021 was offset by the following higher expenditures in Q1 2021 compared to Q1 2020:
| ● | Amortization expense was $8,541 in Q1 2021 and was higher by $6,404 compared to $2,137 in Q1 2020. | |
| ● | Unrealized loss in the valuation of investment in PNR of $16,887 in Q1 2021 compared to $Nil amount in Q1 2020. |
Liquidity, Capital Resources and Going Concern
Liquidity
The Company has financed its operations to date primarily through the issuance of common shares and exercise of stock options and warrants. The Company continues to seek capital through various means including the issuance of equity and/or debt and the securing of joint venture partners where appropriate.
The Company’s principal requirements for cash over the next twelve months will be to fund the ongoing exploration costs at its mineral properties, general corporate and administrative costs and to service the Company’s current trade and other payables.
On April 20, 2021, the Company completed a non-brokered private placement consisting of an aggregate of 8,290,665 units of the Company (“Units”) at a price of $0.24 per Unit, for aggregate gross proceeds of $1,989,760. This financing improved the liquidity and increased the capital resources of the Company. The net proceeds from the sale of the units will be used for continued investment in PNR, advancing exploration activity in Morocco and Greenland and for general corporate and working capital purposes.
Further, as of the date of this report, the Company has received $665,135 in cash inflow from exercised warrants which will improve the liquidity and increase the capital of the Company.
As at March 31, 2021, the Company had $715,896 in available cash.
Working Capital
As at March 31, 2021, The Company had a working capital of $78,030 (March 31, 2020 – $60,117), calculated as total current assets less total current liabilities. The increase in working capital is mainly due to an increase in cash and receivable.
Going Concern
As at March 31, 2021, the Company had accumulated losses totaling $54,326,128. The continuation of the Company is dependent upon the continued financial support of shareholders, its ability to raise capital through the issuance of its securities, and/or obtaining long-term financing.
When managing capital, the Company’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management adjusts the capital structure as necessary in order to support the acquisition and exploration of mineral properties.
The properties in which the Company currently has an interest are in the exploration stage. As such, the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.
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Contractual Obligations and Contingencies
Post Creek
Commencing August 1, 2015, the Company is obligated to pay advances on the NSR of $10,000 per annum. During Q1 2021, the Company paid $5,000 which will be deducted from any payments to be made under the NSR.
Halcyon
Commencing August 1, 2015, the Company is obligated to pay advances on the NSR of $8,000 per annum. During Q1 2021, the Company paid $4,000 which will be deducted from any payments to be made under the NSR.
Flow-through shares
Flow-through common shares require the Company to spend an amount equivalent to the proceeds of the issued flow-through common shares on Canadian qualifying exploration expenditures. The Company may be required to indemnify the holders of such shares for any tax and other costs payable by them in the event the Company has not made the required exploration expenditures.
During the year ended December 31, 2019, the Company received $400,440 from the issue of flow-through shares and has incurred $1,238 of eligible expenditures during the year ended December 31, 2019. During FY 2020, the Company incurred $439,999 of eligible expenditures.
Under the IFRS framework, the increase to share capital when flow-through shares are issued is measured based on the current market price of common shares. The incremental proceeds, or “premium”, are recorded as deferred income. As at December 31, 2020, the Company has renounced and expended $400,440 of the proceeds from flow-through shares.
The Company had no contingent liabilities as at March 31, 2021.
Related Party Transactions
Related parties and related party transactions impacting the accompanying financial statements are summarized below and include transactions with the following individuals or entities:
Key management personnel
Key management personnel are defined as members of the Board of Directors and senior officers.
| March 31, 2021 | March 31, 2020 | |||||||
| Geological consulting fees – expensed | - | 5 | ||||||
| Management fees – expensed | 183 | 116 | ||||||
| Salaries - expensed | - | 33 | ||||||
| Share-based payments | 621 | 671 | ||||||
| Total | 804 | 825 | ||||||
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During Q1 2021, the Company entered into the following transactions with key management personnel and/or related entities:
| Related party | Nature of transaction | |
| Premium Nickel Resources (“PNR”) | Investment in PNR | |
| PNR | Management and Technical Service Agreement was entered on January 1, 2020 whereby the Company provide certain technical, corporate, administrative and clerical, office and other services to PNR. | |
| Bennett Jones LLP (“BJ”) | A legal firm in which the Company’s former chairman was a consultant | |
Lacnikdon Limited (“Morrison”) (Keith Morrison) |
Consulting fees for the services of CEO. Agreement effective Jun 1, 2018. | |
Sarah-Wenjia Zhu (“Zhu”) Consultation WJZHU Inc. |
CFO, employment contract terminated on September 31, 2020 and replaced by a consulting agreement. | |
Mark Fedikow (“Fedikow”) |
President, employment contract terminated on July 31, 2020 and replaced by a consulting agreement. | |
| Charles Riopel (“Riopel”) | Director | |
| Dock Ford (“Ford”) | Director | |
| Chris Messina (“Messina”) | Director | |
| Janet Huang (“Huang”) | Director | |
| Gilbert Clark (“Clark”) | Director, resigned on January 7, 2021 | |
| John Hick (Hick”) | Director |
| (a) | Initial investment of $24,000 in PNR in 2019 and subsequently further investment of $154,164 during 2020 and $100,400 during Q1 2021. To March 31, 2021, the Company’s total investment constitutes a 9.94% holding (March 31, 2020 – 11.37%) in PNR. |
| (b) | Charged PNR $161,639 (March 31, 2020 - $309,474) for services and charged $3,233 in administrative fees, received $162,587 (March 31, 2020 – $Nil) and recorded $75,725 in due from PNR (March 31, 2020 - $371,155). Subsequent to March 31, 2021, the Company received the $75,725 in full from PNR. |
| (c) | Legal fee of $11,230 (Q1 2020: $35,701) charged by BJ. |
| (d) | Paid $50,723 (Q1 2020: $32,715) to Morrison for management services provided. In addition, granted 600,000 options with a fair value of $157,740 (Q1 2020: 600,000 with a fair value of $79,782) as disclosed in key management personnel compensation within fees and share-based payment. |
| (e) | Paid $54,000 (Q1 2020: $33,250) to Zhu for management services provided. In addition, granted 300,000 options with a fair value of $78,870 (Q1 2020: 600,000 with a fair value of $79,782) as disclosed in key management personnel compensation within fees and share-based payment. |
| (f) | Paid $15,750 (Q1 2020: $62,500) to Fedikow for management services provided. In addition, granted 50,000 options in 2020 with a fair value of $6,648 as disclosed in key management personnel compensation within fees and share-based payment. |
| (g) | Paid $7,500 (Q1 2020: $5,250) to Riopel for management services provided. In addition, granted 300,000 options with a fair value of $78,870 (Q1 2020: 800,000 with a fair value of $106,376) as disclosed in key management personnel compensation within fees and share-based payment. |
| (h) | Paid $22,500 (Q1 2020: $5,250) to Ford for management services provided. In addition, granted 350,000 options with a fair value of $92,015 (Q1 2020: 600,000 with a fair value of $79,782) as disclosed in key management personnel compensation within fees and share-based payment. |
| (i) | Paid $22,500 (Q1 2020: $5,250) to Messina for management services provided. In addition, granted 350,000 options with a fair value of $92,015 (Q1 2020: 600,000 with a fair value of $79,782) as disclosed in key management personnel compensation within fees and share-based payment. |
| (j) | Granted 160,000 options with a fair value of $42,064 (Q1 2020: 600,000 with a fair value of $79,782) to Huang as disclosed in key management personnel compensation within fees and share-based payment. |
| (k) | Paid $10,000 (2020: $Nil) to Hick for management services provided. In addition, granted 300,000 options (2020: nil) with a fair value of $78,870 as disclosed in key management personnel compensation within fees and share-based payment. |
23 | TSXV: NAN / Q1 2021 |
MANAGEMENT’S DISCUSSION AND ANALYSIS For the Three Months Ended March 31, 2021 |
 |
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements as at March 31, 2021.
Financial Instruments
| All amounts in table are expressed in thousands of CDN dollars | Fair
Value at March 31, 2021 | Basis of Measurement | Associated Risks | |||||
| Cash | 716 | FVTPL | Credit | |||||
| Other receivables | 50 | Amortized cost | Credit | |||||
| Trade payables | 494 | Amortized cost | Liquidity | |||||
Future Accounting Standards and Amendments
Certain accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.
IAS 16 - “Property, Plant and Equipment”
The IASB issued an amendment to IAS 16, Property, Plant and Equipment to prohibit the deducting from property, plant and equipment amounts received from selling items produced while preparing an asset for its intended use. Instead, sales proceeds and its related costs must be recognized in profit or loss. The amendment will require companies to distinguish between costs associated with producing and selling items before the item of property, plant and equipment is available for use and costs associated with making the item of property, plant and equipment available for its intended use. The amendment is effective for annual periods beginning on or after January 1, 2022, with earlier application permitted. The amendment is not currently applicable.
IAS 1 – “Presentation of Financial Statements”
The IASB issued an amendment to IAS 1, Presentation of Financial Statements to clarify one of the requirements under the standard for classifying a liability as non-current in nature, specifically the requirement for an entity to have the right to defer settlement of the liability for at least 12 months after the reporting period. The amendment includes: (i) specifying that an entity’s right to defer settlement must exist at the end of the reporting period; (ii) clarifying that classification is unaffected by management’s intentions or expectations about whether the entity will exercise its right to defer settlement; (iii) clarifying how lending conditions affect classification; and (iv) clarifying requirements for classifying liabilities an entity will or may settle by issuing its own equity instruments. An assessment will be performed prior to the effective date of January 1, 2023 to determine the impact to the Company’s financial statements.
Risk and Uncertainties
The business of the Company entails significant risks that may have a material and adverse impact on the future operations and financial performance of the Company and the value of the common shares of the Company. These risks that are widespread risks associated with any form of business and specific risks associated with involvement in the exploration and mining industry. Hence, investment in the securities of the Company should be considered highly speculative. An investment in the securities of the Company should only be undertaken by persons who have sufficient financial resources to enable them to assume such risks.
The following is a general description of all material risks and uncertainties:
| ● | The Company has negative operating cash flows and might not be able to continue as a going concern; | |
| ● | The Company will require additional funding in the future and no assurances can be given that such funding will be available on the terms acceptable to the Company or at all; | |
| ● | The speculative nature of resource exploration and development projects; |
24 | TSXV: NAN / Q1 2021 |
MANAGEMENT’S DISCUSSION AND ANALYSIS For the Three Months Ended March 31, 2021 |
 |
| ● | The uncertainty of mineral resource estimates and the Company’s lack of mineral reserves; | |
| ● | The Company’s ability to successfully establish mining operations and profitable production; | |
| ● | Operations of the Company are carried out in geographical areas that are subject to various other risk factors; | |
| ● | The economic uncertainty of operating in a developing country, such as the availability of local labour, local and outside contractors and equipment when required to carry out the Company’s exploration and development activities; | |
| ● | Other foreign operations risks; potential changes in applicable laws and government or investment policies; | |
| ● | The Company is not insured against all possible risks; | |
| ● | Environmental risks and hazards; | |
| ● | The title of the Company’s mineral properties cannot be guaranteed and may be subject to prior unregistered agreements, transfers and other defects, and the risk of obtaining a mining permit and the successful renewal of currently pending renewal applications; | |
| ● | The commodity prices may affect the Company’s value, changes in and volatility of commodity prices and its hedging policies; | |
| ● | Increased competition in the mineral resource sector; | |
| ● | The Company may have difficulty recruiting and retaining key personnel; | |
| ● | Currency fluctuations risk; | |
| ● | Repatriation of earnings, no assurances that Greenland or any other foreign country that the Company may operate in the future will not impose restrictions on repatriation of earnings to foreign entities; | |
| ● | No production revenues; | |
| ● | Stock exchange prices volatilities; | |
| ● | Potential Conflicts of interest; | |
| ● | Ability to exercise statutory rights and remedies under Canadian securities law; | |
| ● | Enforceability of foreign judgements; | |
| ● | Unforeseen litigation; | |
| ● | The Company’s future sales or issuance of common shares; | |
| ● | Risk of suspension of public listing due to failure to comply with local securities regulations; | |
| ● | The Company’s auditors have indicated that U.S. reporting standards would require them to raise a concern about the company’s ability to continue as a going concern; | |
| ● | Risk of fines and penalties; and | |
| ● | Risk of improper use of funds in local entity. | |
| ● | Potential impact of COVID-19 on exploration program and activities. |
Share Capital Information
As of the date of this MD&A the following number of common shares of the Company and other securities of the Company exercisable for common shares of the Company are outstanding:
| Securities | Common shares | |||
| Common shares | 124,402,532 | |||
| Preferred shares | 65,659 | |||
| Stock options | 10,560,625 | |||
| Warrants | 23,821,145 | |||
| Fully diluted share capital | 158,849,961 | |||
25 | TSXV: NAN / Q1 2021 |
MANAGEMENT’S DISCUSSION AND ANALYSIS For the Three Months Ended March 31, 2021 |
|
Subsequent Event after Quarter Ended March 31, 2021
On April 20, the Company closed a non-brokered private placement consisting of an aggregate of 8,290,665 units of the Company (the “Units”) at a price of $0.24 per unit, for aggregate gross proceeds of $1,989,759.60. Each unit consists of one common share in the capital of the Company and one half transferable common share purchase warrant (“Warrant”) of the Company. Each full Warrant entitles the holder to acquire one common share of the Company within twenty-four (24) months following its issuance date, at a price of $0.35. The warrants are subject to an acceleration clause such that if the closing market price of the common shares on the TSX-V is greater than $0.60 per common share for a period of 10 consecutive trading days at any time after the four-month anniversary of the closing of the placement, the Company may, at its option, accelerate the warrant expiry date to within 30 days.
In connection with the private placement, the Company has paid eligible finders (the “Finders”): (i) cash commission equal to 6% of the gross proceeds raised from subscribers introduced to the Company by such Finders, being an aggregate of $57,189.62, and (ii) a number of common share purchase warrants (the “Finder Warrants”) equal to 6% of the units attributable to the Finders under the private placement, being an aggregate of 238,289 Finder Warrants. Each Finder Warrant entitles the Finder to acquire one common share of the Company for a period of twenty-four (24) months following its issuance date, at an exercise price of $0.35.
Disclosure Controls and Procedures
Management has established processes to provide them sufficient knowledge to support representations that they have exercised reasonable diligence that (i) the consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the consolidated financial statements; and (ii) the consolidated financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented.
In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of:
| i. | controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and | |
| ii. | a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s accounting policies. |
The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost-effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.
26 | TSXV: NAN / Q1 2021 |
MANAGEMENT’S DISCUSSION AND ANALYSIS For the Three Months Ended March 31, 2021 |
 |
Caution Regarding Forward Looking Statements
Statements contained in this MD&A that are not historical facts are forward-looking statements (within the meaning of the Canadian securities legislation and the U.S. Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements with respect to the future price of metals; the estimation of mineral reserves and resources, the realization of mineral reserve estimates; the timing and amount of estimated future production, costs of production, and capital expenditures; costs and timing of the development of new deposits; success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and the timing and possible outcome of pending litigation. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others, risks related to the integration of acquisitions; risks related to operations; risks related to joint venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of metals; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the sections entitled “Risks and Uncertainties” in this MD&A. Although the Company has attempted to identify important factors that could affect the Company and may 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 not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this MD&A speak only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.
Forward-looking statements and other information contained herein concerning the mining industry and general expectations concerning the mining industry are based on estimates prepared by the Company using data from publicly available industry sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which the Company believes to be reasonable. However, this data is inherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While the Company is not aware of any misstatements regarding any industry data presented herein, the industry involves risks and uncertainties and is subject to change based on various factors.
Additional Information
Additional information about the Company and its business activities is available under the Company’s profile on the Canadian SEDAR website at www.sedar.com.
Qualified Person and Technical Information
The scientific and technical information contained in this MD&A was prepared by or under the supervision of and reviewed and approved by Peter C. Lightfoot, PhD, P. Geo, the qualified person for the Company under National Instrument 43-101. Dr. Lightfoot is a “Qualified Person” as defined by NI 43-101. Dr. Lightfoot verified the data underlying the information in this MD&A.
For further information relating to the Maniitsoq Project in southwest Greenland, please see the technical report titled Updated Independent Technical Report for the Maniitsoq Nickel-Copper-Cobalt-PGM Project, Greenland” dated March 17, 2017 prepared by SRK Consulting (US) Inc. which is available under the Company’s issuer profile on SEDAR at www.sedar.com as well as the company website at www.northamericannickel.com
27 | TSXV: NAN / Q1 2021 |
Exhibit 99.3
Form 52-109FV2
Certification of Interim Filings Venture Issuer Basic Certificate
I, Keith Morrison, President and Chief Executive Officer of North American Nickel Inc., certify the following:
| 1. | Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of North American Nickel Inc. (the “issuer”) for the interim period ended March 31, 2021. |
| 2. | No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. |
| 3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. |
Date: May 26, 2021
| /s/ Keith Morrison | |
| Keith Morrison | |
| Chief Executive Officer |
NOTE TO READER
In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of
| i) | controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
| ii) | a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52- 109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.
Exhibit 99.4
Form 52-109FV2
Certification of Interim Filings Venture Issuer Basic Certificate
I, Sarah-Wenjia Zhu, Chief Financial Officer of North American Nickel Inc., certify the following:
| 1. | Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of North American Nickel Inc. (the “issuer”) for the interim period ended March 31, 2021. |
| 2. | No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. |
| 3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. |
Date: May 26, 2021
| /s/ Sarah-Wenjia Zhu | |
| Sarah-Wenjia Zhu | |
| Chief Financial Officer |
NOTE TO READER
In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control oveAr financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of
| i) | controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
| ii) | a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52- 109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.