Victory Nickel Inc.

Victory Nickel Inc.

June 14, 2013 16:53 ET

Victory Nickel Announces Rights Offering to Shareholders

TORONTO, ONTARIO--(Marketwired - June 14, 2013) - Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:NI) today announced the terms of a rights offering to existing shareholders to raise gross proceeds of up to approximately $2.7 million (the "Offering").

"We believe it is important to give our existing shareholders the opportunity to participate in the future success of Victory Nickel on a non-dilutive basis," said Vice-Chairman and CEO Rene Galipeau. "This rights offering does just that, and will ensure that Victory Nickel remains financially strong and able to actively advance its projects during the current period of market uncertainty. With the pending entry into the frac sand business, Victory Nickel can expect to begin generating cash flow in the very near future."

The Company will be offering to eligible holders of its outstanding common shares (each, a "Common Share") of record as at the close of business on June 28, 2013 (the "Record Date") approximately 452 million rights (each, a "Right") to subscribe for up to approximately 113 million units of the Company (each, a "Unit") on the terms set forth in a rights offering circular (the "Circular") to be mailed by the Company to shareholders (and which will also be available on SEDAR). Each such holder will receive one Right for each Common Share held on the Record Date. Four Rights will entitle the holder to purchase one Unit at a price of $0.024. Each Unit is comprised of one Common Share and one Common Share purchase warrant (each, a "Warrant"). Each Warrant will entitle the holder to purchase one Common Share at a price of $0.035 during the 12 month period beginning at 9:00 a.m. (Toronto time) on July 31, 2014 and ending at 4:00 p.m. (Toronto time) on July 31, 2015. The Rights will expire at 4:00 p.m. (Toronto time) on July 30, 2013, 2013. Shareholders who exercise all of their Rights will also be entitled to acquire additional shares pursuant to an additional subscription privilege to be provided for under the Offering, the terms of which are described in the Circular.

Pursuant to a previously announced (March 26, 2013) amended and restated loan agreement (the "Loan Agreement") between the Company and Nuinsco Resources Limited ("Nuinsco"), Nuinsco has provided the Company with a secured credit facility (the "Facility"). The terms of the Facility provide that in the event that the Offering is not fully subscribed, Nuinsco will, at the request of the Company, subscribe under the Offering for Units having a total subscription price of up to $1,000,000, subject to an increase to up to $1,500,000 as described in the Loan Agreement (which has been filed on the Corporation's profile on SEDAR at and as will be further described in the Circular (the "Standby Commitment").

The Rights will be listed on the Toronto Stock Exchange (the "TSX") under the trading symbol "NI.RT" on June 26, 2013, and the Common Shares underlying the Units will begin trading on an ex-rights basis on that date. The TSX has also approved the listing of the Common Shares issuable upon exercise of the Warrants.

The offer of securities is made in each of the provinces and territories of Canada and those jurisdictions where it is lawful to do so, including the Bahamas, the Cayman Islands and the United Kingdom (for further information please refer to the section in the Circular entitled "Ineligible Shareholders").

Net proceeds of the Offering will be approximately $2.4 million (excluding any potential proceeds from the exercise of the Warrants), assuming that all of the Rights are exercised. The Company intends to use the proceeds of the Offering for general working capital purposes, including the advancement of the frac sand business being developed by the Company's subsidiary Victory Silica Ltd.

About Victory Nickel

Victory Nickel Inc. is a Canadian company with four sulphide nickel deposits containing significant NI 43-101-compliant nickel resources. Victory Nickel is focused on becoming a mid-tier nickel producer by developing its existing properties, Minago, Mel and Lynn Lake (under option to Prophecy Platinum) in Manitoba, and Lac Rocher in northwestern Québec, and by evaluating opportunities to expand its nickel asset base. Through a wholly-owned subsidiary, Victory Silica Ltd., Victory Nickel is establishing a presence in the frac sand market prior to commencing frac sand production and sales from Minago.

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Forward-Looking Information: This news release contains forward-looking information. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding the mailing of the Circular to shareholders, the listing of the Rights and the Common Shares underlying the Units and the Warrants, the Standby Commitment, the amount and use of the proceeds raised from the Offering, the Company's development plans and objectives (including for the Minago, Mel and Lynn Lake properties) and estimates and/or assumptions in respect of production, revenue, sales, cash flow, costs, economic return, and net present value (including for the Minago, Mel and Lynn Lake properties)) constitute forward-looking information. This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: failure to successfully complete the Offering; uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; the failure of shareholders to exercise the maximum number of Rights; the failure of Nuinsco to provide the Standby Commitment; the possibility that actual circumstances will differ from estimates and assumptions; changes in equity markets; the inability of the Company to generate cash flow in the future; the inability of the Company to meet its development plans and objectives; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual information form dated March 28, 2013 filed on SEDAR at Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions (including that all of the Rights will be exercised under the Offering) inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

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