Alliance Nickel Targets US$5.4B Pre-Tax Cash Flow in Nasdaq SPAC Move

Alliance Nickel's Strategic Move

Alliance Nickel Limited (ASX – AXN) has taken a significant step toward expanding its capital market footprint by appointing Cohen & Company Capital Markets and Welsbach Corporate Solutions as exclusive financial advisors. The company is exploring a potential Special Purpose Acquisition Company (SPAC) transaction that could lead to a Nasdaq listing, positioning Alliance to access deeper US equity markets.

This strategic initiative aligns with Alliance's focus on supplying high-purity nickel and cobalt, both classified as critical metals by the US government, for the burgeoning North American electric vehicle (EV) battery sector. The NiWest Nickel-Cobalt Project, Alliance's flagship asset, is central to this ambition.

Robust Project Fundamentals Backing the Move

The timing of this exploration is underscored by the delivery of a Definitive Feasibility Study (DFS) expected in November 2024, which has already demonstrated compelling economics. Key highlights include an ungeared pre-tax free cash flow of A$8.3 billion, a net present value (NPV) of A$2.2 billion pre-tax, and an internal rate of return (IRR) exceeding 21%. The project’s first quartile all-in sustaining costs (AISC) position it competitively against global nickel producers, particularly those in Indonesia.

Alliance’s Managing Director and CEO, Paul Kopejtka, emphasized the strategic importance of the Nasdaq listing, stating it could unlock valuations that better reflect NiWest’s quality and critical role in supply chains. The company’s existing partnership with Stellantis N.V., a major automaker with an 11.5% equity stake and a binding offtake agreement for 40% of NiWest’s nickel and cobalt sulphate production over five years, further strengthens its market position.

SPAC Transaction as a Gateway to US Capital Markets

SPAC transactions have become a popular alternative to traditional initial public offerings, offering a faster route to listing and access to a broader institutional investor base. By merging with a publicly traded SPAC, Alliance could list on Nasdaq without the lengthy IPO process, gaining liquidity and capital to advance NiWest’s development.

Cohen & Company brings extensive experience advising critical minerals companies through transformative transactions, while Welsbach Corporate Solutions adds expertise in structuring strategic deals and supply chain financing. Their combined capabilities are expected to guide Alliance through the complexities of a US listing and potential mergers and acquisitions.

Implications for Investors and the Critical Minerals Sector

The US government’s prioritization of critical minerals supply chain security, including direct equity investments in Australian projects, creates a favorable backdrop for Alliance’s ambitions. A Nasdaq listing could enhance visibility and valuation, attracting investors focused on the EV battery supply chain and clean energy transition.

However, the SPAC transaction remains exploratory, with no guarantees of completion. Market conditions, funding availability, and regulatory approvals will be critical factors in determining the outcome. Meanwhile, Alliance continues to advance NiWest’s development, supported by its Major Project Status granted by the Australian government.