Aug 1 2012
Royal Nickel Corporation (TSX: RNX) is pleased to announce that it has signed an investment agreement with Ressources Québec. Under the terms of the agreement, Ressources Québec has acquired an interest in the Dumont Nickel Project and will have the right to receive 0.8% of the net smelter return in the project in exchange for a purchase price of $12 million.
"Ressources Québec's investment in Dumont demonstrates their confidence in the project and is an example of Quebec's commitment to the responsible development of its resource sector. This investment by Ressources Québec supports our continued momentum as we work toward delivery of a full feasibility study for Dumont by mid-2013. In addition to our existing working capital, this financing should provide sufficient capital for RNC to complete the feasibility study and continue our permitting work" said Tyler Mitchelson, President and CEO of RNC.
"Ressources Québec is pleased to make this investment in the Dumont Project. Our detailed review of the project has given us confidence that the development of Dumont will create tremendous value for the Abitibi region and the economic development of Quebec. We look forward to its anticipated start-up in late 2015" said Denis Williams, General Manager of Ressources Québec.
The Dumont Nickel Project is expected to create approximately 1400 jobs during construction and an average of over 500 full-time jobs when in full production.
Pursuant to the agreement between RNC and Ressources Québec, RNC receives $12 million and Ressources Québec is entitled to receive 0.8% of the net smelter return from the sale of minerals produced from Dumont and receives a 2% undivided co-ownership interest in the property. RNC has the right to repurchase, at any time after the fifth anniversary, all or any portion of Ressources Québec's interest for $10 million for each 0.2% of the net smelter return, to a maximum consideration of $40 million for the entire interest (including the 2% interest in the property).
Prior to this transaction, Ressources Québec completed a review of all aspects of RNC and the Dumont project to its own satisfaction.
RNC intends to use the funds raised under the financing to continue to move forward with activities related to the development of Dumont, including ongoing work on a 43-101 compliant feasibility study and permitting as well as working with its advisor, Rothschild, to bring in a partner for a 30-45% interest in Dumont. RNC is currently in discussions with potential partners in Europe, Japan, and China with goal of securing a partner by late 2012 or early 2013.