Alternative Financing & Political Tailwinds Helping to Advance Crawford Nickel Project

• Canada Nickel has successfully executed multiple bridge financing deals, avoiding dilution while maintaining project momentum during challenging capital markets
• Trump administration and Canadian political landscape creating unprecedented tailwinds for critical minerals projects in North America
• Unlike EV-dependent competitors, Canada Nickel can flex between stainless steel and EV markets, providing revenue stability and optionality
• FEED study completed with permitting on track for year-end, positioning for construction decision and first-mover advantage in the Timmins District
• After a decade-long absence, institutional generalist funds are returning to mining, creating potential for significant capital influx

Introduction to Canada Nickel & the Crawford Project

Canada Nickel Corporation (TSX: CNC) stands at the forefront of what CEO Mark Selby describes as "the world's largest nickel sulfide district" in Timmins, Ontario. The company is rapidly advancing its flagship Crawford Nickel project toward a construction decision, having achieved remarkable development speed that defies the industry's typical 19-year discovery-to-production timeline.

The Crawford project represents more than just another nickel mine. As Selby explains: "We believe [the Timmins Nickel District] will be the world's largest nickel sulfide district," positioning Canada Nickel at the center of a critical mineral supply chain that governments and corporations are desperately trying to secure outside of Chinese control.

What sets Canada Nickel apart is not just the scale of its resource but the company's strategic approach to development. The project has been designed with flexibility in mind, capable of producing both nickel concentrates for the EV market and processing them into products for the stainless steel and alloy markets. This dual-market strategy provides crucial revenue stability and optionality that many EV-focused competitors lack.

Interview with Chief Executive Officer, Mark Selby

Financing Strategies & Market Dynamics

In an environment where traditional equity financing has become prohibitively expensive and dilutive, Canada Nickel has pioneered an alternative financing approach that has caught the attention of industry observers. Selby notes this is their "fourth" bridge loan arrangement, each strategically timed to avoid equity dilution during weak market conditions.

"Instead of trying to raise US$20 million in today's equity markets, we'll get that money in the bank and pay it back, and a lot of that money that we expect to raise in nine months is going to be non-dilutive."

This approach recognizes a fundamental shift in the mining finance landscape.

The reality, as Selby puts it, is stark:

"The actively managed money that you would go 'raise equity' from has shrunk very dramatically over last 15 years. It's become very focused on copper, gold and silver and then whatever the flavor of the day is."

For companies outside these core metals, alternative financing has become not just an option but a necessity for survival.

Canada Nickel's latest financing package totals approximately $39-40 million, with a significant portion coming from a groundbreaking partnership with the TTN First Nation. This innovative structure demonstrates how mining companies can work with Indigenous communities as true partners rather than mere stakeholders, creating mutually beneficial arrangements that strengthen project fundamentals.

Investor Relationships & Project Assessment

One of Canada Nickel's key advantages lies in its management team's proven track record and the relationships built over decades in the industry. Selby emphasizes that success in attracting strategic investors requires three critical elements:

"A team that has a track record of doing stuff is helpful. There is the personal relationships that need to be developed because in places like Asia and places like the Middle East, it's very much not transactional. It starts with a relationship and then goes from there."

The company has successfully attracted strategic investors from diverse geographies, including Samsung SDI for potential offtake, TTN First Nations and various Middle Eastern groups that are increasingly interested in critical mineral investments. These relationships took years to develop, with Selby noting, "I wish they took three months or six months and you could do one trip and get it done, but you're talking about dozens of trips over multiple years to be able to get that done."

The completion of the Front-End Engineering and Design (FEED) study has been crucial in attracting these investors. As Selby explains, "To be able to track those types of investors, you need to be at least at a PEA stage, hopefully a pre-feasibility or feasibility study stage." The FEED study has positioned Canada Nickel to order long-lead items like transformers and ball mills, demonstrating real project momentum to potential investors.

Generalist Investors & Market Trends

Perhaps the most significant development for the mining sector broadly, and Canada Nickel specifically, is the return of generalist institutional investors. Selby recounts a telling conversation with a friend who covers major New York and Connecticut hedge funds: "That guy called me out of the blue at the start of last week and said, 'In terms of all of the different macro factors, you have to go back to that early 2000s, 2002, 2003, 2004 to see a similar alignment of opportunity.'"

This shift is driven by relative value considerations. When generalist investors "look at having to buy stock A at 30 times earnings or 1.5 times underlying net asset value versus this sector that's trading for pennies, 5 and 10% of NPV," combined with geopolitical supply chain concerns, the mining sector becomes increasingly attractive.

The implications for capital flows are significant. As Selby notes:

"If all of a sudden some of these generalists start to get interested, then all of a sudden you go from being 0.05% of assets to 0.1% to 0.25% to 0.5% to 1%. That feels like a tidal wave of capital that becomes available."

At recent conferences, Selby reports meeting with multiple generalist funds: "Last two days, we had 21 meetings. I would say five or six of those are more generalist funds." This represents a fundamental shift from the mining-only investor base that has sustained the sector through recent difficult years.

Permitting & Engineering Developments

Canada Nickel has made remarkable progress on the permitting front, filing its Environmental Impact Statement last fall and completing public consultations with over 200 submissions received. The company anticipates receiving a deficiency report from regulatory agencies but remains confident in its timeline to complete permitting by year-end. Selby states:

"We've got the data ready to fill that in, and we're still on track to be able to get that done by the end of the year."

The company has strategically assembled an experienced permitting team, including Pierre-Philippe Dupont, who previously permitted the Dumont project, bringing crucial expertise to the process.

The $39-40 million in recent financing will fund several critical activities: continued permitting work, detailed engineering following the FEED study completion, and resource development work on the company's regional assets including Three Giants, Midlothia, Mann West, and Reed deposits. This comprehensive approach ensures Canada Nickel maintains momentum across all aspects of project development.

Engineering work will focus on advancing toward construction readiness, with the ability to order long-lead equipment items already established through the FEED study. This positions Canada Nickel to move quickly once final investment decisions are made and funding packages are completed.

Political Landscape & Critical Minerals

The political environment has never been more favorable for critical mineral projects in North America. The Trump administration's focus on supply chain security and the newly elected Canadian government under Carney both present significant opportunities for companies like Canada Nickel.

Selby sees particular opportunity in the current political dynamics:

"There's a real political incentive and a political driver to really make bold steps forward. I'm as excited as I have been in terms of what that potential could look like."

The Canadian government has announced numerous funding programs, though deployment has been slow. As Selby notes, "The issue with the Canadian government is not that they haven't announced enough programs. They're running out of acronyms. They just haven't deployed very much of it." The new administration's focus on pace suggests this could change dramatically.

Canada's position in USMCA renegotiations provides additional leverage:

"The reality for Canada is the only cards that we show up with are oil and gas and minerals," Selby explains. "We will end up with a lot more leverage if we say, look, we've got uranium, nickel, cobalt, lithium, graphite, all of these projects are now moving at rocket ship pace."

Even SMR (Small Modular Reactor) technology is being fast-tracked, with permitting timelines potentially reduced from 7-10 years to 1-2 years according to recent government conversations. This demonstrates the administration's serious commitment to accelerating critical infrastructure projects.

Nickel Market Insights & EV Dependency

While headlines about companies like Honda scaling back EV investments in Canada might concern some investors, Canada Nickel's diversified market approach provides insulation from EV market volatility. The company designed its nickel plant to serve 100% of production to stainless steel and alloy markets if needed, while maintaining optionality for EV markets through its Samsung SDI offtake agreement.

"We're not dependent on the EV market," Selby emphasizes. "We can produce for the EVs if they want to pay, but we don't have to give it away and we don't have to panic if one or two plants don't show up."

Stainless steel demand remains robust, with 300 series stainless production in China up 12% year-over-year in the first four months. This demonstrates the underlying strength in traditional nickel markets that provides Canada Nickel with revenue stability regardless of EV market fluctuations.

The company's flexibility extends to geographic markets as well. Selby notes:

"As long as you're doing it flexibly, and you're not committing 100% into the EV market - we've got capability to move our nickel units wherever we need them."

This echoes INCO's historical success in moving nickel between applications based on market conditions.

Future Funding & Market Opportunities

Canada Nickel has outlined a comprehensive funding strategy for its approximately $3 billion project, with multiple potential sources already identified and advancing. The company has secured $500 million from Export Development Canada (EDC) and another $500 million from a Canadian group, with EDC serving as mandated lead arranger to access other export credit agencies.

The equity portion includes $600 million in refundable tax credits, $100 million from Samsung, and potential additional funding from French agencies ($50+ million), German agencies ($50-100 million), the Critical Minerals Infrastructure Fund ($50 million range), and the Canada Growth Fund (potentially hundreds of millions).

Customer commitments are progressing strategically. "Between now and year end, we want to commit to a couple of customers," Selby explains. "The reason is, it helps unlock other buckets of money." European and German government funding requires demonstrated sales to their respective markets, creating additional value from customer relationships beyond traditional offtake agreements.

The urgency from car companies and battery manufacturers is increasing as we move past the midpoint of the decade toward their planned production ramp-ups. "The urgency with which they're looking to get some of these contracts in place is really starting to pick up," according to Selby.

The Investment Thesis for Canada Nickel

• First-Mover Advantage: Crawford project is the most advanced large-scale nickel project in the Timmins District, positioning Canada Nickel to capture the bulk of value from what could become the world's largest nickel sulfide district
• Financing Innovation: Management team has successfully navigated challenging capital markets through alternative financing, avoiding dilution while maintaining project momentum when competitors have stalled
• Government Support Convergence: Unprecedented alignment of Canadian and US government priorities around critical minerals creates multiple funding sources and political support for project success
• Market Diversification: Unlike pure-play EV nickel companies, Canada Nickel can serve both stainless steel and EV markets, providing revenue stability and protection against single-market volatility
• Proven Management Team: Leadership with track record from INCO and other major projects, extensive industry relationships, and demonstrated ability to execute complex international financing
• Strategic Location: Canadian jurisdiction provides stable regulation, access to infrastructure, and strategic proximity to US markets during a period of supply chain reshoring
• Technical Readiness: FEED study completion enables immediate ordering of long-lead equipment, positioning for rapid construction start once final investment decision is made
• Institutional Interest: Return of generalist investors to mining sector creates potential for significant re-rating as institutional capital flows increase beyond current resource-focused investor base

Canada Nickel represents a compelling investment opportunity at the intersection of critical mineral supply security, innovative financing, and favorable political tailwinds. The company has positioned itself to benefit from multiple macro trends while maintaining operational flexibility and financial discipline. With permitting on track, financing structures advancing, and generalist investor interest returning to the sector, Canada Nickel appears well-positioned to deliver significant value to shareholders as it transitions from developer to producer in one of the world's most promising nickel districts.

Macro Thematic Analysis: The Critical Minerals Paradigm Shift

The investment case for Canada Nickel cannot be understood in isolation from the broader macro thematic reshaping global resource markets. We are witnessing a fundamental paradigm shift in how governments and corporations approach critical mineral supply chains, driven by three converging forces: geopolitical tensions, energy transition demands, and supply chain resilience imperatives.

The geopolitical dimension has become paramount as Western governments recognize their dangerous dependence on Chinese-controlled supply chains for critical minerals. Recent supply chain disruptions have demonstrated the fragility of just-in-time global systems, prompting a strategic pivot toward "friend-shoring" and domestic production. This shift represents a complete reversal from the globalization trends of the past three decades, creating unprecedented opportunities for North American miners.

The energy transition, despite recent EV market volatility, remains structurally intact with supportive policy frameworks across major economies. However, the focus has evolved from pure-play EV exposure to broader industrial applications, exactly where Canada Nickel's flexible approach provides maximum advantage. Stainless steel and aerospace applications continue to grow independently of EV adoption rates, providing multiple demand vectors for nickel production.

Perhaps most importantly, we're seeing the emergence of what could be termed "strategic capital" – government and institutional funding specifically directed toward securing critical mineral supply chains. This capital operates under different investment criteria than traditional mining finance, prioritizing strategic value and supply security over purely financial returns. Canada Nickel's position in this ecosystem, with government backing, strategic partnerships, and technical readiness, positions it to capture a disproportionate share of this strategic capital deployment. The convergence of these themes suggests we may be entering a super-cycle for critical minerals, with companies like Canada Nickel serving as key beneficiaries of this macro transformation.