TORONTO, ON / ACCESSWIRE / August 26, 2021 / Victory Nickel Inc. ("Victory Nickel" or the "Company") (CSE:NI)(www.victorynickel.ca) is pleased to provide a corporate update.
As announced on March 31, 2021, Victory Nickel engaged Grant Thornton as financial advisor to assess alternatives in the next phase of restructuring the Company's unsecured debt. A successful restructuring (defined as eliminating the working capital deficit resulting in a clean balance sheet) of the unsecured debt is the critical next step to moving the Company forward in a more streamlined and viable manner.
In late 2020 Victory Nickel supported the Minago sales process initiated by the then secured lender as it was the sole basis in which the Company could foresee generating residual value for the remaining stakeholders, the unsecured creditors and shareholders. The Company remains committed to this objective. Furthermore, the Company is committed to treating unsecured creditors with legally enforceable claims as a single class of creditors who will be offered the same restructuring opportunity, with no priority given to any one creditor in the class.
On this basis the Company has crafted a proposal to restructure its unsecured debt. This proposal has been circulated to an initial group of creditors representing the majority of the class to solicit feedback. These discussions are ongoing and there can be no assurance a restructuring will be successfully completed. The Company will provide updates on the process as appropriate.
Victory Nickel continues to work diligently to safeguard the liquidity created through the sale of Minago with a minimalist Management team and Board. This is not sustainable and as such the urgency of completing the next phase of debt restructuring is the Company's number one priority.
The Board continues to believe that all stakeholders will be in a better position by having Management direct the crystallization of our liquidity rather than allowing a bankruptcy and insolvency or restructuring ("CCAA") scenario to occur.
On the operations front, the domestic frac sand market appears to be showing signs of recovery, customers are reporting 20-50% increase in volume of sand pumped during the second quarter of 2021 compared to the second quarter of 2020. The Company continues to review the business plan for the development of its Short Grass property.
There is value in the Company's nickel assets as well as with the nickel price showing an overall improving trend in 2021.
As always, we appreciate the continued support of our shareholders, lenders and suppliers, progress is being made.
There are no assurances that the Company will be able to restructure its remaining unsecured debt and there is no certainty as to what further steps, if any, the debtors, or the Company, will take.
About Victory Nickel
Victory Nickel Inc. is a Canadian company with significant NI 43-101 sulphide nickel resources in Manitoba and Quebec, containing significant NI 43-101-compliant nickel resources. Additionally, through a wholly-owned subsidiary, Victory Silica Ltd., Victory Nickel has established itself as a producer and marketer of industrial sands in the western Canadian marketplace from its 7P Plant in Medicine Hat, Alberta.
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. The forward-looking information contained in this news release, including information related to the completion and outcome of any debt restructuring activities reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. 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. 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.
SOURCE: Victory Nickel Inc.