Nuinsco Resources Ltd. (TSX: NWI) has sold its 14.7 per cent interest in Victory Nickel Inc. (TSX: NI) to Jilin Jien Nickel Industry Co. Ltd. for US$2.7 million and has also secured a $2.8-million loan from the Chinese company.
Toronto-based Nuinsco said Tuesday the sale raises Jilin Jien's holdings in Victory Nickel – a junior miner with four sulphide nickel deposits in Manitoba and Quebec – to 49.7 million shares, about 18.9 per cent of the company's stock.
"This is a very unique and creative agreement which effectively restructures the Nuinsco's debt, improves its liquidity and allows it to focus on the business of exploring and developing its properties," Nuinsco vice-chairman and CEO Rene Galipeau said in a statement.
"This transaction is indicative of Nuinsco's commitment to improving shareholder value and represents a vote of confidence by a strategic investor in Victory Nickel's assets."
By excising additional stock-purchase rights also included in the sale, Jilin Jien can raise its stake in Victory to 19.9 per cent.
"We have been following the developments of Victory Nickel for quite some time now, and are pleased to have acquired this equity investment," said Jilin Jien vice-president Wang Xingrui.
"Large-scale sulphide nickel deposits in premier mining regions are becoming increasingly difficult to find, but there is significant exploration upside present at Minago, as well as three other Canadian sulphide nickel deposits, Lynn Lake, Mel and Lac Rocher. We see Victory Nickel as an important part of our long-term growth plan in nickel."
Jilin Jien, an integrated mining, smelting, refining and chemical production firm, has agreed to loan Nuinsco the $2.8 million with the company's Cameron Lake gold deposit and its nine per cent stake in Gold Hawk Resources Inc. (TSXV:CGK) as security.
Nuinsco is focused on uranium, copper, zinc and gold exploration and development in mineralized belts in Canada and Turkey. Its shares were ahead half a cent to 5.5 cents in morning trading on the Toronto Stock Exchange.
Victory Nickel shares rose a penny to 10 cents.
