Victory Nickel Enters into Asset Purchase Agreement for Sale of Minago Property

TORONTO, ON / ACCESSWIRE / January 22, 2021 / Victory Nickel Inc. ("Victory Nickel" or the "Company") (CSE:NI) (www.victorynickel.ca) today announced that it has entered into an asset purchase agreement ("APA") with Silver Elephant Mining Corp. ("Silver Elephant") for the conditional sale of the Company's Minago nickel property in northern Manitoba.

Subject to the acquisition by Silver Elephant of 100% of the Company's debt held by the Company's secured lender (the "Secured Debt") and the restructuring, as defined in the APA, of the Secured Debt, the APA provides for consideration to the Company as follows:

• A US$6,675,000 credit against certain secured debt owed by Victory Nickel to Silver Elephant at closing (the "Property Payment").
• US$5,000,000 in Silver Elephant common shares ("Consideration Shares") to be issued in three tranches over a one-year period.
• Subscription by Silver Elephant for common shares of Victory Nickel for aggregate gross consideration of C$1,000,000.
• An agreement to issue to Victory Nickel C$2,000,000 in Silver Elephant common shares, upon the price of nickel exceeding US$10.00 per pound for 30 consecutive business days on or before December 31, 2023.
• Upon receipt of an independent economic study in respect of the Minago Project, Silver Elephant will credit the remainder of the balance owing under the secured debt owed to Silver Elephant.
• A right of first refusal on the exploitation of the Minago frac sand resource.

"The Board of Directors has worked extremely hard to preserve value and the ability to move the Company forward for the benefit of all the stakeholders of Victory Nickel," said Sean Stokes, Interim CEO of the Company. "The execution of this transaction would ultimately eliminate the Company's Secured Debt, give management the opportunity to restructure its unsecured debt and inject sufficient liquidity to support the efforts to advance the Company's operations to build value for stakeholders while allowing continued participation in the upside of the Minago project both in terms of the nickel and sandstone resources."

In addition to significant ownership of Silver Elephant shares and optionality at Minago, upon closing, the Company will continue to own the Mel and Lac Rocher deposits, both containing NI-43-101 sulphide nickel resources and its revenue-generating 7P sand processing facility in Alberta (the "7P Plant"). The Company has also identified a significant frac sand resource in close proximity to the 7P Plant which will allow it to compete in the market for domestic frac sand and retains option to exploit an 11 million ton National Instrument 43-101 sand resource on the Bear Coulee frac sand property located in Trempeleau County, Wisconsin.

About Victory Nickel

Victory Nickel Inc. is a Canadian company with sulphide nickel deposits containing significant NI 43-101-compliant nickel resources and a significant frac sand resource at its Minago project. Through a wholly-owned subsidiary, Victory Silica Ltd., Victory Nickel at its 7P frac sand processing facility in Seven Persons Alberta has established itself in the frac sand business.

Contact:

Victory Nickel Inc.
Sean Stokes
Email: [email protected]
www.victorynickel.ca

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.