Victory Nickel Inc.

Victory Nickel Inc.

November 04, 2014 16:33 ET

Victory Nickel Options Lynn Lake Nickel Project to Corazon Mining

Consideration includes equity interest in Corazon and 1.5% NSR

TORONTO, ONTARIO--(Marketwired - Nov. 4, 2014) - Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:Ni) today announced that it has executed a binding term sheet to option its past-producing Lynn Lake nickel project in Manitoba to Corazon Mining Ltd. ("Corazon") (ASX:CZN).

Under the terms of the agreement, subject to any required regulatory approvals, Corazon can acquire a 100% interest in the Company's Lynn Lake project by issuing to Victory Nickel 40 million Corazon shares upon closing and incurring A$3,500,000 in exploration expenditures or in payments (in cash or Corazon shares at Corazon's option) to Victory Nickel over five years. In addition, Victory Nickel will retain a 1.5% net smelter royalty on production from the Lynn Lake nickel project, and receive a payment of A$1,000,000 (in cash or Corazon shares at Corazon's option) within 30 days of ore processing activities at the Lynn Lake nickel project.

The Lynn Lake nickel project is located in Lynn Lake in northern Manitoba, about 320 kilometres by road northwest of the Thompson mining camp. The property is the former Sherritt Gordon Mines Limited mine site known as the Lynn Lake A Mine and Farley Mine, comprised of 13 mining claims, 14 mining claim leases and 2 mineral leases covering an area of 2,170.26 hectares. The property was operated by Sherritt Gordon from 1953 to 1976 with reported production of 22.2 million tons at an average grade of 1.023% nickel and 0.535% copper.

Corazon Mining Limited (ASX:CZN) is a diversified base metals company exploring the historic nickel-copper Lynn Lake mining camp in Canada. Corazon's land position is immediately adjacent to Victory Nickel's Lynn Lake nickel project. In 2010, Corazon discovered a high-grade sulphide breccia at depth below the EL Mine, a discovery that confirmed the prospectivity of that company's Lynn Lake project area. According to Corazon, its intent in consolidating the Lynn Lake nickel-copper camp is to "improve the economics of any potential mining operation and provide benefits in scale and possible mine life." Corazon claims that its initial work will include generating a JORC 2012-compliant resource, advancing mining studies and resource modelling in the Lynn Lake camp.

"Victory Nickel's principal focus is on growing its frac sand sales business and subsidiary Victory Silica Ltd. while keeping in mind the development of the large sulphide nickel and frac sand resources at its permitted Minago project in Manitoba," said René Galipeau, Vice-Chairman and CEO. "Corazon's participation will bring new life to the Lynn Lake area and provide upside participation for Victory Nickel shareholders. We look forward to positive developments by Corazon at Lynn Lake."

About Victory Nickel

Victory Nickel Inc. is a Canadian company with four sulphide nickel deposits containing significant NI 43-101-compliant nickel resources and a significant frac sand resource at its Minago project. Victory Nickel is focused on becoming a mid-tier nickel producer by developing its existing properties, Minago, Mel and Lynn Lake 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 has established a presence in the frac sand market prior to commencing frac sand production and sales from Minago.

About Victory Silica Ltd.

Victory Silica Ltd. is a wholly-owned subsidiary of Victory Nickel and is charged with a phased plan to establish the Company in the frac sand market. In Phase 1, the Company constructed a 500,000 ton-per-year dry processing plant and has begun processing and selling sand imported from Wisconsin. The Seven Persons frac sand plant is well located in an area populated with fracking companies, its potential customers, and is within only a few hours' trucking distance of major oil or gas play well sites. Phase 2, which includes the construction of a concentrator in Wisconsin, is expected to reduce costs and assure security of sand supply through the control of a frac sand mine in Wisconsin. In Phase 3, the Company intends to construct a larger frac sand plant to process and distribute both imported and domestic sand, which may potentially, but not necessarily, include sand mined as a co-product of development at the Company's Minago project. The Company has already identified a site in Manitoba for this purpose.

Please visit the Company's website at Should you wish to receive Company news via email, please email and specify "Victory Nickel" in the subject line.

Forward-Looking Information: This news release contains certain forward-looking information. All information, other than information regarding historic fact that addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future is forward-looking information. Forward-looking information contained in this news release includes, but may not be limited to the progress and success of the Company's projects, including the Company's goals and business plan with respect to the frac sand business and the future demand for frac sand. The forward-looking information contained in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. With respect to the forward-looking information contained in this news release, the Company has made assumptions regarding, among other things, the Company's future working capital requirements, the Company's ability to generate sufficient cash flow from operations and access existing credit facilities and capital markets to meet its future obligations, goals and business plan, future prices for frac sand and by-products and future demand for processed frac sand. The forward-looking information contained in this news release is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including the need to obtain required approvals and permits from regulatory authorities, the volatility of frac sand and by-product prices and demand and geological, technical, drilling and processing problems. Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable law, the Company disclaims any obligation to update or modify such forward-looking information, either because of new information, future events or for any other reason. Although the Company believes that the assumptions 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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