FPX Nickel Announces $16 Million Strategic Equity Investment from Major Global Stainless Steel Producer Outokumpu

30 May 2023

FPX Nickel Corp. is pleased to announce that it has closed a private placement financing with a new cornerstone strategic investor, the major global stainless steel producer Outokumpu Oyj.

Under the terms of the Private Placement, FPX has issued 26,800,000 common shares (“Private Placement Common Shares”) in the capital of the Company to Outokumpu at a price of C$0.60 per common share, for gross proceeds of C$16,080,000.  Upon completion of the Private Placement, Outokumpu now owns approximately 9.9% of FPX’s issued and outstanding common shares on a non-diluted basis.

“This strategic investment by Outokumpu represents a significant technical validation of FPX’s Baptiste Nickel Project (“Baptiste” or the “Project”), and underscores Canada’s critical role as a supplier of choice to allied industrial partners in Europe and the United States,” commented Martin Turenne, FPX’s President and CEO. “Outokumpu is a large and highly-regarded global operator, with a robust track record of producing the world’s most sustainable stainless steel, and is a significant nickel consumer.

“Our partnership with Outokumpu testifies to Baptiste’s potential to produce a premium nickel product that can bypass the intermediate smelting stage, thus becoming a highly sought-after feedstock for the responsible production of low-carbon finished products in multiple consumer and industrial markets, including stainless steel.  FPX is pleased to be Outokumpu’s preferred partner as they look to secure the sustainable, long-life nickel units which are best aligned with their strategic objectives.”

“The carbon footprint of Outokumpu’s stainless steel is already the smallest in the world, but we want to further decarbonize our production,” commented Marc-Simon Schaar, Head of Raw Material Sourcing at Outokumpu.  “This would also mean the reduction of the emissions of our supply chain, and to achieve this, we work together with our suppliers to strengthen the sustainability of the entire supply chain – including environmental, social and governance aspects.  The nickel to be produced from FPX’s Baptiste deposit in Canada has the potential to have a very low carbon footprint.  Therefore, we are excited to be part of this development project as a shareholder, which, once realized, would provide an excellent low-emission source of nickel, and in a composition which suits our own production.”

The Company intends to use the net proceeds of the Private Placement primarily for development ‎‎activities at the ‎Project, including the completion of a preliminary feasibility study for Baptiste, continuance of ‎‎ongoing environmental baseline activities, and feasibility study readiness activities, as well as ‎‎general corporate and administrative purposes.  The TSX Venture Exchange has provided final acceptance of the Private Placement and the Common Shares issued pursuant to the Private ‎‎Placement are subject to a hold period of four (4) months and one (1) day from the date of ‎‎issuance in accordance with applicable securities laws.  No finders’ fees or commissions were paid on the Private Placement.‎

Transaction Details

Concurrent with the closing of the Private Placement:

  • FPX granted a right of first offer (“ROFO”) which will ‎provide Outokumpu the right, so long as it continues to hold the Private Placement ‎Common Shares, to negotiate, at market terms, one or more offtake agreements with FPX for up to an aggregate of 60,000 tonnes of nickel (7,500 ‎tonnes of nickel per year over a period of eight years) from FPX’s Baptiste Nickel Project.
  • FPX and Outokumpu entered into an investor rights agreement (the “Investor Rights Agreement”) that provides, among other things, Outokumpu with certain rights in the event it maintains minimum ownership thresholds in the Company, including the right to participate in equity financings. In addition, pursuant to the Private Placement, Outokumpu has agreed to a two-year standstill with respect to the acquisition of additional securities in FPX, other than acquisitions pursuant to Outokumpu’s rights under the Investor Rights Agreement.

Based on the Company’s 2020 preliminary economic assessment (“PEA”), the Baptiste project has the potential to produce up to 44,900 tonnes of nickel per annum over a projected mine life of 35 years.  The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves.  Mineral resources are not mineral reserves and do not have demonstrated economic viability.  There is no certainty that the conclusions or results as reported in the PEA will be realized. See the Company’s September 9, 2020 news release.

Andrew Osterloh, P.Eng., FPX Nickel’s Qualified Person under NI 43-101, has reviewed and approved the technical content of this news release.