Noble Mineral Exploration Inc. (TSXV: NOB) or (OTCQB: NLPXF) owns 5,913,000 shares of Canada Nickel Company Inc. (TSXV: CNC) and on April 25, 2022, NOB will distribute 3,500,000 of its CNC shares to NOB shareholders on a pro-rata basis. Based on NOB's closing price yesterday of $0.145 per share and CNC's closing price yesterday of $2.96 per share, NOB's Special Dividend of 3,500,000 CNC shares has a value equal to 34.76% of NOB's market cap of $29.807 million.
NOB created CNC back on October 1, 2019, when it agreed to spin-off its Crawford Nickel-Cobalt Sulphide Project into the company. NOB's spin-off of CNC was completed on December 3, 2019, with CNC raising $6.5 million in an initial private placement, which priced CNC's common shares at $0.25 per share. NOB received 12,000,000 CNC shares worth $3 million plus $2 million in cash. At the time, NOB owned a 22% stake in CNC post-financing. On February 25, 2020, NOB distributed 10,000,000 CNC shares to NOB shareholders on a pro-rata basis. CNC commenced trading on February 27, 2020.
On February 17, 2021, less than one year after CNC's initial listing on the TSX Venture Exchange, CNC hit a new all-time high of $4.54 per share for a gain of 1,716% from its initial offering price of $0.25 per share. The 10 million CNC shares that NOB previously distributed to its shareholders on a pro-rata basis back on February 25, 2020, saw their value increase from $2.5 million up to a peak of $45.4 million.
The 3.5 million CNC shares that NOB will be distributing to its shareholders next month were obtained by NOB on December 20, 2021, as payment for additional nickel properties that NOB sold to CNC from its Project 81 land package.
NOB also retained a 2% net smelter royalty on the claims in Bradburn, Mahaffy and MacDiarmid Townships, subject to the right of CNC to repurchase 1% (half) of the 2% royalty held by NOB for a repurchase price of $1.5 million per property if repurchased during the one-year period after closing, increasing to $2.5 million per property if repurchased during the second year after closing, and increasing to $5 million per property if repurchased more than 2 years after closing.
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. NIA has received compensation from NOB of USD$100,000 cash for a twelve-month marketing contract. This message is meant for informational and educational purposes only and does not provide investment advice