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Sumitomo Metal Mining, one of the world’s largest nickel producers, is investing about C$14.5 million in FPX Nickel (TSXV: FPX) in a private placement. The investment will see Sumitomo take a 9.9% stake in FPX through the purchase of 30.1 million shares at a price of $0.48 per share.
“This strategic investment by Sumitomo Metal Mining represents another significant technical validation of FPX’s Baptiste nickel project and underscores our view that Baptiste is a class-leading asset,” said Martin Turenne, FPX’s president and CEO.
Under the terms of the investment, Sumitomo will be granted certain investor rights, including the right to participate in future financings. The firm has also agreed to a two-year standstill agreement that will limit its ability to expand its stake in FPX to 14.9%. If ownership in FPX exceeds 15% after the conclusion of the standstill agreement, Sumitomo will have the right to nominate one director to the board.
FPX has gained 11% in the past five days to trade at 30 cents.
FPX is not the only Canadian-focused nickel company announcing backing by the majors. Over the past 30 days Canada Nickel has added Agnico Eagle Mining and Samsung SDI as major investors. Canada Nickel is advancing its Crawford nickel-cobalt project in Ontario.
