South Korea-based Samsung SDI is set to invest $18.5m in Canada Nickel, by acquiring shares representing 8.7% of Canada Nickel, at C$1.57 per share, in a private placement.

Samsung SDI is a manufacturer of rechargeable batteries for the IT industry, automobiles, and energy storage systems (ESS), along with materials used in semiconductors and displays.

It has signed a subscription agreement and an investor rights agreement with Canada Nickel.

Under the terms of the agreements, Samsung SDI will have a pro-rata right to maintain its shareholding of 7.5% or more, in any future issuance of common shares.

The private placement is expected to be closed around 31 January 2024, subject to customary closing conditions including the approval of the TSX Venture Exchange.

Upon closing of the private placement, Samsung SDI will own around 15.6 million common shares of Canada Nickel, which represents around 8.7% of the company.

Canada Nickel CEO Mark Selby said: “We are very pleased to welcome Samsung SDI as an investor and project partner with Canada Nickel.

“As we advance the Crawford Nickel Sulphide Project, it is critical to form long-term partnerships with companies that truly understand how crucial this production is for electric vehicle supply chains across North America and Europe.

“As one of the world’s leading electric vehicle battery manufacturers, Samsung SDI not only understands our vital role in these supply chains but also believes in Canada Nickel’s vision for responsible, large-scale, net-zero carbon nickel production.”

In addition, Samsung SDI has the right to buy a 10% interest in the Crawford project for $100.5m, at the closing of the private placement, exercisable upon a final construction decision.

The company also holds the right to 10% of the nickel-cobalt production from the Crawford project, which can be extended to 20% of Crawford’s nickel-cobalt production for 15 years.

Cutfield Freeman, Deutsche Bank, Harp Capital, and Scotiabank served as financial advisors to Canada Nickel on this transaction.

Samsung SDI executive vice president Ikhyeon Kim said: “We are pleased to partner with Canada Nickel through this opportunity. We look forward to working with Canada Nickel to contribute to the growing battery manufacturing industry through this partnership.”