North American Nickel Inc.

EX-99.1 2 exhibit1.htm EX-99.1 Exhibit EX-99.1

NORTH AMERICAN NICKEL INC.

Condensed Interim Financial Statements

Three Months Ended March 31, 2016

(Expressed in Canadian Dollars)

Notice to Reader of the Unaudited Interim Financial Statements
for the three months ended March 31, 2016

In accordance with National Instrument 51-102, of the Canadian Securities Administrators, the Company discloses that its auditors have not reviewed the unaudited interim financial statements.

The unaudited interim financial statements of North American Nickel Inc. (the “Company”) for the three month period ended March 31, 2016 (“Financial Statements’) have been prepared by management. The Financial Statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2015, which are available at the SEDAR website at www.sedar.com. The Financial Statements are stated in Canadian dollars, unless otherwise indicated, and are prepared in accordance with International Financial Reporting Standards (“IFRS”).


NORTH AMERICAN NICKEL INC.
Condensed Interim Statement of Financial Position
(Expressed in Canadian Dollars - unaudited)
			March 31,			December 31,
	Notes		2016			2015
ASSETS
Current assets
Cash		6	$	251,820		$	524,923
Short-term investments		7		1,800,000			2,300,000
Receivables		8		41,196			65,367
Prepaid expenses and deposits				41,635			41,711

Total current assets				2,134,651			2,932,001

Non-current assets
Equipment		9		76,406			93,328
Exploration and evaluation assets		10		29,918,395			29,703,848

Total non-current assets				29,994,801			29,797,176

Total assets			$	32,129,452		$	32,729,177

LIABILITIES
Current liabilities
Trade payables and accrued liabilities	11		$ 131,389			$249,604

SHAREHOLDERS’ EQUITY
Share capital — preferred		12		590,931			590,931
Share capital — common		12		50,574,095			50,574,095
Share-based payments reserve		12		5,341,896			5,134,560
Deficit				(24,508,859	)		(23,820,013	)

Total shareholders’ equity				31,998,063			32,479,573

Total liabilities and shareholders’ equity			$ 32,129,452			$ 32,729,177

APPROVED BY THE DIRECTORS:
			(signed)
(signed)	,Director		,Director

Keith Morrison			Edward D. Ford

The accompanying notes are an integral part of these financial statements.


NORTH AMERICAN NICKEL INC.
Condensed Interim Statement of Comprehensive Loss
(Expressed in Canadian Dollars - unaudited)
For the three months ended March 31, 2016
			March 31,			March 31,
	Notes		2016			2015
Expenses
Amortization		9	$	19,973		$	14,860
Consulting		13		74,292			58,884
Filing fees				4,283			6,540
Investor relations				27,924			66,227
General and administrative		13		45,455			61,884
Management fees		13		170,250			132,250
Professional fees		13		11,447			7,524
Property investigation and Port development				6,635			361
Salaries and benefits		13		84,674			53,805
Share-based payments		12, 13		207,336			254,791
Travel and accommodation				40,992			62,901

Loss before other items				(693,261	)		(720,026	)
Other items:
Interest income				4,507			15,097
Foreign exchange loss				(93	)		(3,077	)

Net loss and comprehensive loss for the year			$	(688,846	)	$	(708,006	)

Loss per common share — basic and diluted			$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding
- basic and diluted				207,629,506			171,280,855


The accompanying notes are an integral part of these financial statements.NORTH AMERICAN NICKEL INC.
Condensed Interim Statement of Changes In Shareholder's Equity
(Expressed in Canadian Dollars -
unaudited)
For the three months ended March 31,
2016
										Share-based payments
	Notes		Number of shares		Share capital			Preferred Stock		reserve			Deficit			Total

Balance at December 31, 2014				169,964,679	$	42,677,187		$	590,931	$	5,199,706		$	(21,715,130	)	$	26,752,694
Net and comprehensive loss				—		—			—		—			(708,006	)		(708,006	)
Share-based payments		12		—		—			—		254,791			—			254,791
Stock options exercised		12		50,000		7,500			—		(2,500	)		—			5,000
Warrants exercised		12		2,941,176		617,647			—		—			—			617,647

Balance at March 31, 2015				172,955,855		43,302,334			590,931		5,451,997			(22,423,136	)		26,922,125
Net and comprehensive loss				—		—			—		—			(1,680,964	)		(1,680,964	)
Share capital issued private placement		12		29,054,079		6,391,897			—		—			—			6,391,897
Forfeited/expired stock options				—		—			—		(284,087	)		284,087			—
Share-based payments				—		—			—		3,776			—			3,776
Stock options exercised		12		1,099,000		164,850			—		(54,950	)		—			109,900
Warrants exercised		12		4,520,572		949,320			—		—			—			949,320
Share issue costs				—		(234,306	)		—		17,824			—			(216,482	)

Balance at December 31, 2015				207,629,506	$	50,574,095		$	590,931	$	5,134,560		$	(23,820,013	)	$	32,479,573
Net and comprehensive loss				—		—			—		—			(688,848	)		(688,848	)
Stock options issued		12		—		—			—		207,336			—			207,336

Balance at March 31, 2016				207,629,506	$	50,574,095		$	590,931	$	5,341,896		$	(24,508,859	)	$	31,998,063

The accompanying notes are an integral part of these financial statements.


NORTH AMERICAN NICKEL INC.
Condensed Interim Statements of Cash Flows
(Expressed in Canadian Dollars - unaudited)
For the three months ended March 31, 2016
	December 31,			March 31,
	2015			2015
OPERATING ACTIVITIES
Loss for the period	$	(688,846	)	$	(708,006	)
Items not affecting cash
Amortization		19,973			14,860
Share-based payments		207,336			254,791
Interest Income		(4,508	)		(15,097	)

Changes in non-cash working capital items:
Receivables		25,671			(18,648	)
Prepaid expenses		76			(25,676	)
Trade payables and accrued liabilities		(102,289	)		(90,143	)
Other:
Interest received		3,009			3,584
Due to related parties		(15,926	)		(52,691	)

Cash used in operating activities		(555,505	)		(637,026	)

INVESTING ACTIVITIES
Expenditures on exploration and evaluation assets		(214,547	)		(320,565	)
Short-term investments		500,000			500,000
Purchase of equipment		(3,051	)		(92,954	)

Cash used in investing activities		282,402			86,481

FINANCING ACTIVITIES
Proceeds from exercise of warrants		—			617,647
Proceeds from exercise of options		—			5,000

Cash provided by financing activities		—			622,647

Change in cash during the period		(273,103	)		72,102
Cash at beginning of period		524,923			326,117

Cash at end of period	$	251,820		$	398,219

Supplemental cash flow information — (Note 14)

The accompanying notes are an integral part of these financial statements.1. NATURE AND CONTINUANCE OF OPERATIONS

North American Nickel Inc. (the “Company”) was incorporated on September 23, 1983, under the laws of the Province of British Columbia, Canada. The head office, principal address and records office of the Company are located at PO Box 63623 Capilano PO, North Vancouver, British Columbia, Canada, and V7P 3P1. The Company’s common shares trade on the TSX Venture Exchange (“TSX-V”) under the symbol “NAN”.

The Company’s principal business activity is the exploration and development of mineral properties in Greenland, Canada and United States. The Company has not yet determined whether any of these properties contain ore reserves that are economically recoverable. The recoverability of carrying amounts shown for exploration and evaluation assets is dependent upon a number of factors including environmental risk, legal and political risk, the existence of economically recoverable mineral reserves, confirmation of the Company’s interests in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete exploration and development, and to attain sufficient net cash flow from future profitable production or disposition proceeds.

These condensed financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. The ability of the Company to continue operations as a going concern is ultimately dependent upon achieving profitable operations. To date, the Company has not generated profitable operations from its resource activities and will need to invest additional funds in carrying out its planned exploration, development and operational activities. These uncertainties cast substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The exploration and evaluation properties in which the Company currently has an interest are in the exploration stage. As such, the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration and cover administrative costs, the Company will use its existing working capital and raise additional amounts as needed. The Company will continue to assess new properties and seek to acquire interests in additional properties if there is sufficient geologic or economic potential and if adequate financial resources are available to do so.

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION

The condensed financial statements were approved by the board of directors on April 27, 2016.

Statement of compliance with International Financial Reporting Standards

The condensed financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”) applicable to the preparation of these financial statements.

Basis of preparation
These condensed financial statements have been prepared on an accrual basis and are based on historical costs, modified where applicable. The financial statements are presented in Canadian dollars, unless otherwise noted, which is the Company’s functional currency.

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Foreign currency translation
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the statement of comprehensive loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognized in other comprehensive income in the statement of comprehensive loss to the extent that gains and losses arising on those non-monetary items are also recognized in other comprehensive income. Where the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized in profit or loss.

Exploration and evaluation assets

Exploration and evaluation assets include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures are initially capitalized. Costs incurred before the Company has obtained the legal rights to explore an area are recognized in profit or loss.

Government tax credits received are generally recorded as a reduction to the cumulative costs incurred and capitalized on the related property.

Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts, events and circumstances suggest that the carrying amount exceeds the recoverable amount.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within equipment.

Recoverability of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

The Company may occasionally enter into farm-out arrangements, whereby it will transfer part of an interest, as consideration, for an agreement by the farmee to meet certain exploration and evaluation expenditures which would have otherwise been undertaken by the Company. The Company does not record any expenditures made by the farmee on its behalf. Any cash consideration received from the agreement is credited against the costs previously capitalized to the mineral interest given up by the Company, with any excess consideration accounted for in profit.

When a project is deemed to no longer have commercially viable prospects to the Company, exploration and evaluation expenditures in respect of that project are deemed to be impaired. As a result, those exploration and evaluation expenditure costs, in excess of estimated recoveries, are written off to the statement of comprehensive loss/income.

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Restoration and environmental obligations

The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of long-term assets, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present value of future restoration cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to exploration and evaluation assets along with a corresponding increase in the restoration provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The restoration asset will be depreciated on the same basis as other mining assets.

The Company’s estimates of restoration costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to exploration and evaluation assets with a corresponding entry to the restoration provision. The Company’s estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and changes in estimates.

Changes in the net present value, excluding changes in the Company’s estimates of reclamation costs, are charged to profit and loss for the period.

The costs of restoration projects included in the provision are recorded against the provision as incurred. The costs to prevent and control environmental impacts at specific properties are capitalized in accordance with the Company’s accounting policy for exploration and evaluation assets.

Impairment of assets
Impairment tests on intangible assets with indefinite useful economic lives are undertaken annually at the financial year-end. Other non-financial assets, including exploration and evaluation assets, are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, which is the higher of value in use and fair value less costs to sell, the asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset’s cash-generating unit, which is the lowest group of assets in which the asset belongs and for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets.

An impairment loss is charged to the profit or loss, except to the extent the loss reverses gains previously recognized in other comprehensive loss/income.

Financial instruments

The Company classifies its financial instruments in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale and financial liabilities. The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition.

Financial assets are classified at fair value through profit or loss when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Financial instruments (cont’d)

The Company has classified cash, short-term investments and receivables as loans and receivables. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortized cost. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets.

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Company’s intention to hold these investments to maturity. They are subsequently measured at amortized cost. Held-to-maturity investments are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period.

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not suitable to be classified as financial assets at fair value through profit or loss, loans and receivables or held-to-maturity investments and are subsequently measured at fair value. These are included in current assets. Unrealized gains and losses are recognized in other comprehensive income, except for impairment losses and foreign exchange gains and losses.

The Company has classified its trade payable as other financial liabilities. Subsequent to initial recognition, trade payable are measured at amortized cost using the effective interest rate method.

Regular purchases and sales of financial assets are recognized on the trade-date – the date on which the group commits to purchase the asset.

Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a significant and prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen.

Loss per share

The Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method the dilutive effect on loss per common share is recognized on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during the period.

Basic loss per common share is calculated using the weighted average number of common shares outstanding during the period and does not include outstanding options and warrants. Dilutive loss per common share is not presented differently from basic loss per share as the conversion of outstanding stock options and warrants into common shares would be anti-dilutive.

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Income taxes
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in net income except to the extent that it arises in a business combination, or from items recognized directly in equity or other comprehensive loss/income.

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax is provided using the asset and liability method of temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred income tax assets and deferred income tax liabilities are offset, only if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Share-based payments
Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is recognized over the vesting period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether these non-vesting and market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

Where the terms and conditions of options are modified, the increase in the fair value of the options, measured immediately before and after the modification, is also recognized over the remaining vesting period.

Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received. Amounts related to the issuance of shares are recorded as a reduction of share capital.

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Share-based payments (cont’d)
When the value of goods and services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

All equity-settled share based payments are reflected in share-based payments reserve, until exercised. Upon exercise shares are issued from treasury and the amount reflected in share-based payments reserve is credited to share capital along with any consideration paid.

Share capital
The Company’s common shares, preferred shares, share warrants and flow-through shares are classified as equity instruments.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from the proceeds.

Proceeds received on the issuance of units, consisting of common shares and warrants are allocated to share capital.

Equipment
Equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of a significant replaced part is derecognized. All other repairs and maintenance are charged to the statement of income and comprehensive income during the financial period in which they are incurred. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in profit or loss.

Depreciation and amortization are calculated on a straight-line method to charge the cost, less residual value, of the assets to their residual values over their estimated useful lives. The depreciation and amortization rate applicable to each category of equipment is as follows:


Equipment		Depreciation rate
Exploration equipment Computer software Computer equipment		20% 50% 30%

3. ACCOUNTING STANDARDS, AMENDMENTS AND INTERPRETATIONS NOT YET EFFECTIVE

The Company has not early adopted the following new standard and is currently assessing the impact that it will have on its future financial statements.

New standard IFRS 9 “Financial Instruments”
This new standard is a partial replacement of IAS 39 “Financial Instruments: Recognition and Measurement”. IFRS 9 introduces new requirements for the classification and measurement of financial assets, additional changes relating to financial liabilities, a new general hedge accounting standard which will align hedge accounting more closely with risk management. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2018 with early adoption permitted.

Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

4. USE OF ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. The preparation of the financial statements also requires management to exercise judgment in the process of applying the accounting policies.

On an on-going basis, management evaluates its judgements and estimates in relation to assets, liabilities and expenses. Management uses historical experience and various other factors it believes to be reasonable under the circumstances, as the basis for its judgments and estimates. Revisions to accounting estimates are recognised prospectively from the period in which the estimates are revised. Actual outcomes may differ from those estimates.

Critical Accounting Estimate

The following is the key estimate and assumption uncertainty that has a significant risk of resulting in a material adjustment within the next financial year.

Share-based payment transactions
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining an appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 12.

4. USE OF ESTIMATES AND JUDGEMENTS (cont’d)

Critical Judgments Used in Applying Accounting Policies

Restoration provisions

Management’s best estimates regarding the restoration provisions are based on the current economic environment. Changes in estimates of contamination, restoration standards and restoration activities result in changes to provisions from period to period. Actual restoration provisions will ultimately depend on future market prices for future restoration obligations. Management has determined that the Company does not have any significant restoration obligations as at March 31, 2016.

Going concern
Financial statements are prepared on a going concern basis unless management either intends to liquidate the Company or to cease trading, or has no realistic alternative to do so. Assessment of the Company’s ability to continue as a going concern requires the consideration of all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. This information includes estimates of future cash flows and other factors, the outcome of which is uncertain. When management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the Company’s ability to continue as a going concern those uncertainties are disclosed.

Exploration and evaluation expenditures
The application of the Company’s accounting policy for exploration and evaluation expenditures requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances.

Management is required to assess impairment in respect of exploration and evaluation assets. The triggering events for exploration and evaluation asset impairment are defined in IFRS 6 Exploration and Evaluation of Mineral Resources and are as follows:

the period for which the entity has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed;

substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned;

exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area; and

sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.

Assumptions made may change if new information becomes available. If, after the expenditure is capitalized, information becomes available suggesting that the recovery of the expenditure is unlikely, the amount capitalized is written off in the statement of operations in the period the new information becomes available.

Income taxes
The Company recognizes deferred tax assets relating to tax losses carried forward to the extent that it is probable that future taxable profits will be available against which they can be utilized.

5. CAPITAL MANAGEMENT

The Company manages its capital structure, which consists of share and working capital, and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition, exploration and development of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size and nature of the Company, is reasonable.

There were no changes in the Company’s approach to capital management during the three months ended March 31, 2016. The Company is not exposed to externally imposed capital requirements.

6. FINANCIAL INSTRUMENT AND RISK MANAGEMENT

All financial instruments are measured in the statement of financial position at amortized cost. The carrying amount of the Company’s financial instruments approximate their fair value due to the short term maturity of these instruments.

Risk management is carried out by the Company’s management team with guidance from the Board of Directors. The Company’s risk exposures and their impact on the Company’s financial instruments are summarized below:

a) Credit Risk

Credit risk is the risk of a loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to cash, short-term investments and receivables. Cash and short-term investments are held with one reputable Canadian chartered bank and are closely monitored by management. Financial instruments included in receivables consist primarily of GST recoverable from the Canadian government and interest earned on investments. Management believes that the credit risk concentration with respect to financial instruments included in cash, short-term investments and receivables is minimal.

b) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at March 31, 2016, the Company held cash of $251,820 (December 31, 2015 — $524,923), and short-term investments of $1,800,000 (December 31, 2015 — $2,300,000) and had current liabilities of $131,389 (December 31, 2015 — $249,604). All of the Company’s liabilities have contractual maturities of less than 30 days and are subject to normal trade terms.

c) Market Risk

i) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company had cash balances and short-term investments, and no interest bearing debt. The Company’s current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit worthiness of its banks. Interest rate risk is minimal.

6. FINANCIAL INSTRUMENT AND RISK MANAGEMENT (cont’d)

ii) Foreign Currency Risk

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company operates in Canada and Greenland and a portion of exploration and evaluation assets are incurred in US dollars, Euros and Danish Krones. Consequently, the Company is exposed to foreign currency risk.

The Company’s Canadian dollar equivalent of financial assets and liabilities that are denominated in Danish Krones consist of accounts payable of $Nil (December 31, 2015 - $3,029).

iii) Price Risk

The Company is exposed to price risk with respect to commodity prices. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. To mitigate price risk, the Company closely monitors commodity prices of precious metals and the stock market to determine the appropriate course of action to be taken by the Company.

7. SHORT-TERM INVESTMENTS

Short-term investments are comprised of a highly liquid Canadian dollar denominated guaranteed investment certificate with an initial term to maturity greater than ninety days, but not more than one year, that is readily convertible to a contracted amount of cash. The counter-party is a Canadian financial institution. At March 31, 2016, the instrument was yielding an annual interest rate of 0.90% (2015 0.90%– 1.20%). The fair market value of the Company’s short-term investment approximates its carrying value at the balance sheet dates.

8. RECEIVABLES


	March 31,		December 31,
	8-Jul-05		2015
Sales taxes receivable	$	27,729	$	53,732
Interest receivable		13,134		11,635
Other receivable		333		—
	$	41,196	$	65,367

9. EQUIPMENT


	Exploration Equipment		Computer Equipment		Computer Software		Total
Cost:
At December 31, 2015	$	46,674	$	7,141	$	135,881	$	189,696
Additions		—		3,051		—		3,051

At March 31, 2016	$	46,674	$	10,192	$	135,881	$	192,747

Amortization:
At December 31, 2015	$	27,668	$	3,592	$	65,108	$	96,368
Charge for the period		2,321		760		16,892		19,973

At March 31, 2016		$29,989	$	4,352	$	82,000	$	116,341

Net book value:
At March 31, 2016		$16,685	$	5,840	$	53,881	$	76,406


	Exploration
	Equipment		Computer Equipment		Computer Software		Total
Cost:
At December 31, 2014	$	46,674	$	—	$	5,360	$	52,034
Additions		—		7,141		130,522		137,662

At December 31, 2015	$	46,674	$	7,141	$	135,882	$	189,696

Amortization:
At December 31, 2014	$	18,333	$	—	$	5,360	$	23,693
Charge for the period		9,335		3,592		59,749		72,676

At December 31, 2015		$27,668	$	3,592	$	65,109	$	96,369

Net book value:
At December 31, 2015		$19,006	$	3,549	$	70,773	$	93,327

10. EXPLORATION AND EVALUATION ASSETS


	Canada				United States		Greenland

					Prime Meridian
	Post Creek Property		Halcyon Property		Property		Maniitsoq Property		Total
Mineral Properties Acquisition
Balance, December 31, 2015	$	258,000	$	198,000	$	—	$	11,497	$	467,497

Acquisition costs — cash		5,000		4,000		16,983		—		25,983
Acquisition costs- Shares		—				—		—		—
Impairment		—		—		—		—		—

Balance, March 31, 2016		263,000		202,000		16,983		11,497		493,480

Expenditures (recoveries)
Balance, December 31, 2015		1,005,504		147,650		—		28,083,197		29,236,351
Administration		—		—		—		3,247		3,247
Consulting services		10,814		2,316		—		141,480		154,610
Drillingexpenses(recovery)		—		—		—		21		21
Equipment and supplies		343		260		—		—		603
Shipping and printing costs		—		—		—		93		93
Storage		—		4,988		—		4,240		9,228
Technical Studies		—		—		—		20,624		20,624
Travel and accommodation		140		—		—		—		140

		11,297		7,564		—		169,704		188,564

Balance, March 31, 2016		1,016,801		155,214		—		28,252,901		29,424,915

Total, Balance March 31, 2016	$	1,279,801	$	357,214	$	16,983	$	28,264,398	$	29,918,395

10. EXPLORATION AND EVALUATION ASSETS (cont’d)

The following is a description of the Company’s exploration and evaluation assets and the related spending commitments:

Post Creek

On December 23, 2009 the Company executed a letter of intent whereby the Company has an option to acquire a mineral claim known as the Post Creek Property located within the Sudbury Mining District of Ontario, and paid a non-refundable deposit of $7,500.

On April 5, 2010 and as amended on March 12, 2013, the Company entered into an option agreement to acquire a 100% interest in the Post Creek Property, subject to certain net smelter return royalties (“NSR”) and advance royalty payments. To December 31, 2015, the Company has completed the required consideration and acquired its interest in the Post Creek Property. Commencing August 1, 2015, the Company is obligated to pay advances on the NSR of $10,000 per annum, totalling $5,000 (paid) during the three months ended March 31, 2016,YTD amount paid $10,000 which will be deducted from any payments to be made under the NSR.

During the three months ended March 31, 2016, the Company incurred exploration expenditures totalling $11,297 (March 31, 2015 — $Nil) on the Post Creek Property.

Halcyon
On April 5, 2010 and as amended on March 12, 2013, the Company entered into an option agreement to acquire rights to Halcyon Property, subject to certain NSR and advance royalty payments. To December 31, 2015, the Company has completed the required consideration and acquired its interest in the Halcyon Property. Commencing August 1, 2015, the Company is obligated to pay advances on the NSR of $8,000 per annum, totalling $4,000 (paid) during the three months ended March 31, 2016, YTD amount paid $8,000 which will be deducted from any payments to be made under the NSR.

During the three months ended March 31, 2016, the Company incurred $7,564 (March 31, 2015 - $5,150) in exploration expenditures on the Halcyon Property.

Maniitsoq
Effective August 15, 2011, the Company was granted an exploration license (the “Sulussugut License”) by the Bureau of Minerals and Petroleum (“BMP”) of Greenland for exclusive exploration rights of an area located near Sulussugut, Greenland. The Company paid a license fee of $5,742 (Danish Krones (“DKK”) 31,400) upon granting of the Sulussugut License. The Sulussugut License was valid for 5 years until December 31, 2015, with December 31, 2011 being the first year providing the Company meets the terms of the license, which includes that specified eligible exploration expenditures must be made. The application for another 5 year term on the Sulussugut License was submitted to the Greenland Mineral Licence & Safety Authority (MLSA) which was effective on April 11, 2016, with December 31, 2016 being the sixth year.

The Greenland MLSA for the year 2016 has adjusted the minimum required exploration expenditures to zero. The accumulated exploration credits held at the end of 2015, DKK 100,303,710 can be carried forward until 2019. There will be an annual licence fee on the Sulussugut License for year 6 and forward of DKK 40,400.

On the first 5 year license, the Company completed the exploration requirements of an estimated minimum of DKK 83,809,340 (approximately CDN $15,808,386) between the years ended December 31, 2011 to 2015 by incurring $26,110,746 on the Sulussugut License.

10. EXPLORATION AND EVALUATION ASSETS (cont’d)

Maniitsoq (cont’d)

Under the terms of the first Sulussugut License the Company was obligated to reduce the area of the license by at least 30%, which was accomplished by the Company reducing the area by 1,505 square kilometres by December 31, 2013. This amended the minimum required eligible exploration expenditure in 2013 to be DKK 26,197,760 (approximately CDN $4,807,000).

In 2015 the Company did not reduce the Sulussugut License. There was an exploration commitment of DKK 21,668,160 (approximately CDN $4,394,303). The Company completed approved expenditures for 2015 of DKK 59,149,846 (approximately CDN $11,995,589). With a credit from 2014 of DKK 28,680,741 (approximately CDN $5,816,454) and commitment of DKK 21,668,160 leaves the Company with excess credits of DKK 100,303,710 (approximately CDN $20,341,592).

The required minimum exploration expenditures on the Sulussugut License for year 5, ending December 31, 2015 was based on an annual approximation of DKK 21,668,160 (approximately CDN $4,084,000). The Sulussugut License area was not reduced in 2015.

Effective March 4, 2012, the Company was granted an additional exploration license (the “Ininngui License”) by the BMP of Greenland for exclusive exploration rights of an area located near Ininngui, Greenland. The Company paid a license fee of $5,755 (DKK 32,200) upon granting of the Ininngui License. The Ininngui License is valid for 5 years until December 31, 2016, with December 31, 2012 being the first year. The Ininngui License is contiguous with the Sulussugut License.

To March 31, 2016, the Company’s expenditures exceeded the minimum requirement and the Company has a surplus of DKK 11,602,095 (approximately CDN $2,187,256), and the Company was granted a credit for the excess, which may be used towards future expense requirements on the Ininngui License until years 2017 DKK 5,325,997 and 2018 DKK 6,276,098 and, should the Company be granted an extension on the exploration license.

In 2015 the Company had approved expenditures of DKK 6,276,098 which is made up of exploration expenditures of DKK 4,184,065 (approximately CDN $848,528) and a general supplement of DKK 2,092,033. The exploration obligation for 2015 was DKK 2,667,740 (approximately CDN $541,018). The Company carried credits at the end of 2015 to be used by 2017 of DKK 5,325,997 and 2018 DKK 6,276,098 for a total available credits of DKK 11,602,095

The required minimum exploration expenditures on the Ininngui License for year 5, ending December 31, 2016 is DKK 2,714,680 (approximately CDN $550,537).

For both licenses, future required minimum exploration expenditures will be adjusted each year on the basis of the change to the Danish Consumer Price Index.

Should the Company not incur the minimum exploration expenditures on either license in any one year from years 2-5, the Company may pay 50% of the difference in cash to BMP as full compensation for that year. This procedure may not be used for more than 2 consecutive calendar years and to December 31, 2015, the Company has not used the procedure for either license.

After year 5, the Company may apply for an additional 5 years for either license. Thereafter, the Company may apply for a license for up to 6 additional years, in 2 year license increments. The Company will be required to

10. EXPLORATION AND EVALUATION ASSETS (cont’d)

Maniitsoq (cont’d)

pay additional license fees and will be obligated to incur minimum exploration costs for such years, which are yet to be determined.

The Company may terminate the licenses at any time; however any unfulfilled obligations according to the licenses will remain in force, regardless of the termination.

As of March 31, 2016, the Company has spent $26,254,833 on exploration costs for the Sulussugut License (December 31, 2015 $26,110,743) and the Company has spent $1,991,879 on exploration costs for the Ininngui License (December 31, 2015 $1,967,369).

The property is subject to a 2.5% NSR. The Company can reduce the NSR to 1% by paying $2,000,000 on or before 60 days from the decision to commence commercial production.

Prime Meridian Property –
On January 4, 2016, the Company made and entered into a 10 year Metallic Minerals Lease with the Michigan Department of Natural Resources for an area covering approximately 320 acres. The terms of the lease an annual rental fee will be required at a rate of US $3.00 per acre per lease year 1-5 and for the 6-10 years the rate will be US $6.00 per acre per lease year. The Company paid the first year rental fee and the required bond of US $10,000. The Department of Natural Resources shall annually review the level of the performance bond and shall require the amount of the bond to be increased or decreased to reflect changes in the cost of future reclamation of the leased premises.

11. TRADE PAYABLES AND ACCRUED LIABILITIES


	March 31,		December 31,
	2016		2015
Trade payables	$	80,789	$	164,057
Amounts due to related parties (Note 13)		—		24,026
Accrued liabilities (Note 13)		50,600		61,521

	$	131,389	$	249,604

12. SHARE CAPITAL

a) The authorized capital of the Company comprises an unlimited number of common shares without par value and 100,000,000 Series 1 convertible preferred shares without par value.

b) Common shares issued and outstanding

Three month period ended March 31, 2016:

There were no share transactions in the period.

c) Preferred shares issued and outstanding

12. SHARE CAPITAL (cont’d)

d) Warrants

At March 31, 2016, there are 590,931 (December 31, 2015 – 590,931) series 1 preferred shares outstanding. In July 2014, 13,794 preferred shares were converted into 15,326 common shares and the par value of $13,794 was transferred to share capital.

The rights and restrictions of the preferred shares are as follows:
i) dividends shall be paid at the discretion of the directors;

ii) the holders of the preferred shares are not entitled to vote except at meetings of the holders of the preferred shares, where they are entitled to one vote for each preferred share held;

iii) the shares are convertible at any time after 6 months from the date of issuance, upon the holder serving the Company with 10 days written notice; and

iv) the number of the common shares to be received on conversion of the preferred shares is to be determined by dividing the conversion value of the share, $1 per share, by $0.90.

A continuity schedule of outstanding common share purchase warrants at March 31, 2015 is as follows:


	March 31, 2016				December 31, 2015
			Weighted Average					Weighted Average
	Number Outstanding		Exercise Price		Number Outstanding			Exercise Price
Outstanding, beginning of			$					$
year		27,738,344		0.49		25,137,030			0.47
Issued		—		—		14,778,344			0.30
Cancelled/ Expired		—		—		(4,715,282	)		0.21
Exercised		—		—		(7,461,748	)		0.21

			$					$
Outstanding, end of period		27,738,344		0.49		27,738,344			0.49

At March 31, 2016, the Company had outstanding common share purchase warrants exercisable to acquire common shares of the Company as follows:


Warrants Outstanding		Expiry Date	Exercise Price		Weighted Average remaining contractual life (in years)
	3,460,000	August 30, 2016	$	1.00		0.42
	4,750,000	August 30, 2016	$	0.50		0.42
	4,750,000	August 30, 2016	$	0.70		0.42
	14,778,344	July 20, 2017	$	0.30		1.30
	27,738,344					0.35

12. SHARE CAPITAL (cont’d)

e) Stock options

The Company adopted a Stock Option Plan (the “Plan”), providing the authority to grant options to directors, officers, employees and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. Under the Plan, the exercise price of each option equals the market price or a discounted price of the Company’s stock as calculated on the date of grant. The options can be granted for a maximum term of 10 years.

The changes in stock options during the three months ended March 31, 2016 are as follows:


	March 31, 2016				December 31, 2015
			Weighted Average					Weighted Average
	Number Outstanding		Exercise Price		Number Outstanding			Exercise Price
Outstanding, beginning of			$					$
year		9,872,500		0.37		12,548,000			0.31
Granted		6,058,000		0.21		1,350,000			0.25
Cancelled/ Expired		—		—		(2,876,500	)		0.11
Exercised		—		—		(1,149,000	)		0.10

			$					$
Outstanding, end of period		15,930,500		0.31		9,872,500			0.37

During the three months ended March 31, 2016, the Company granted 6,058,000 incentive stock options to employees, directors and consultants with a maximum term of 5 years all having vested. The Company calculates the fair value of all stock options using the Black-Scholes Option Pricing Model. The granting of these options resulted in a stock-based compensation expense of $207,336.

The fair value of stock options granted during the three months ended March 31, 2016 was calculated using the Black-Scholes options pricing model with the following weighted-average assumptions:


	March 31,			December 31,
	2016			2015
Expected dividend yield		0	%		0	%
Expected share price volatility		88.02	%		157.90% — 170.53	%
Risk-free interest rate		0.92	%		0.64% — 0.79	%
Expected life of options	5 years			5 years

Details of options outstanding as at March 31, 2016 are as follows:

12. SHARE CAPITAL (cont’d)

e) Stock options (cont’d)


					Weighted Average remaining
Options Outstanding		Options Exercisable	Expiry Date	Exercise Price	contractual life (in years)
	-
150, 000		150,000	May 24, 2016	$0.20	0.15
150, 000		150,000	June 29, 2016	$0.20	0.25
925, 000		925,000	September 6, 2016	$0.25	0.44
1,615,00 0		1,615,000	August 13, 2017	$0.24	1.37
150, 000		150,000	January 15, 2018	$0.15	1.79
200, 000		200,000	April 22, 2018	$0.15	2.06
150, 000		150,000	July 29, 2018	$0.20	2.33
200, 000		200,000	September 30, 2018	$0.37	2.50
3,270,00 0		3,270,000	July 9, 2019	$0.62	3.27
62 ,5 00		62,500	July 9, 2019	$0.62	3.27
200, 000		200,000	August 27, 2019	$0.32	3.41
100, 000		100,000	September 26, 2019	$0.26	3.49
350, 000		350,000	November 5, 2019	$0.21	3.60
1,000,00 0		1,000,000	December 19, 2019	$0.22	3.72
900, 000		900,000	February 3, 2020	$0.275	3.85
450, 000		250,000	October 5, 2020	$0.20	4.52
6,058,00 0		6,058,000	January 28, 2021	$0.21	4.82
15,930,50 0		15,730,500			3.50

f) Share-based payment reserve

The share-based payment reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock options or warrants are exercised, at which time the corresponding amount will be transferred to share capital. Amounts recorded for forfeited or expired unexercised options and warrants are transferred to deficit.

13. RELATED PARTY TRANSACTIONS

Related party balances — The following amounts due to related parties are included in trade payables and accrued liabilities (Note 11):


	March 31,		December 31,
	2016		2015
Directors and officers of the Company	$	7,514	$	8,100
Companies controlled by directors of the Company		—		15,926

		$
		7,514	$	24,026

These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

Related party transactions –
During the three months ended March 31, 2016, the Company recorded $10,338 (March 31, 2015 - $8,767) in rent expense to VMS Ventures Inc. a company that is a significant shareholder and related through common directors, which is included in general and administrative expense.

Related party transactions — Key management personnel compensation:


	Period ended		Period ended
	March 31,		March 31,
	2016		2015
			$
Geological consulting fees — expensed	$	23,070		14,521
Geological consulting fees - capitalized		23,277		19,564
Management fees — expensed		170,250		132,250
Salaries — expensed		21,563		17,250
Stock-based compensation		136,319		3,121

	$	374,478	$
				186,706

14. NON-CASH TRANSACTIONS

The Company did not incur any non-cash financing and investing activities during the three months ended March 31, 2016 and March 31, 2015.


15.		COMMITMENTS
		Effective July 1, 2014, the Company had changes to management and entered into the following agreements for services with directors of the Company and a company in which a director has an interest:

i) Management fees: Effective June 2014 the Company had changes to management and the fees for interim CEO were $6,000 per month and effective December 2014 a permanent CEO was in place for a fee of $27,083 per month until settlement of restricted share units are issued at which time the monthly fee will be $20,833.

ii) COO fees: $10,000 per month, as amended effective January 1, 2015.

iii) Effective July 2014, four independent directors collect a monthly stipend of $2,000 each and effective November 2014 the chairman of the board will collect a monthly stipend of $3,000.

Effective October 1, 2015, an independent director came on board and will collect a monthly stipend of $2,000.


15.		COMMITMENTS (cont’d)
		Each of the agreements shall be continuous and may only be terminated by mutual agreement of the parties, subject to the provisions that in the event there is a change of effective control of the Company, the party shall have the right to terminate the agreement, within sixty days from the date of such change of effective control, upon written notice to the Company. Within thirty days from the date of delivery of such notice, the Company shall forward to the party the amount of money due and owing to the party hereunder to the extent accrued to the effective date of termination.
	16.	SEGMENTED INFORMATION

The Company operates in one reportable operating segment being that of the acquisition, exploration and development of mineral properties in three geographic segments being Canada, Greenland and United States (Note 10). The Company’s geographic segments are as follows:


		March 31, 2016		December 31, 2015
	-
Equipment
		$
Canada			59,721	$	74,322
		$
Greenland			16,685		19,006

		$
			76,406	$	93,328

Exploration and evaluation assets
Canada		$	1,637,014	$	1,609,154
Greenland			28,264,398		28,094,694
United States			16,983		—
		$	29,918,395	$	29,703,848

17. SUBSEQUENT EVENTS

On April 22, 2016, the Company entered into a term loan with Sentient Executive GP IV Limited and received an advance of $4,500,000. The loan is due on April 30, 2017 and has been made on an interest free basis. Sentient is to be paid 952,380 common shares, which is equivalent value of 2.2% of the principal amount of the loan, as a fee for advancing the loan. The loan is subject to early pre-payment in the event that, during the term of the loan, the Company completes a private placement of gross proceeds of $2,000,000 or more.

NORTH AMERICAN NICKEL INC.

Management Discussion and Analysis
For the Three Months Ended March 31, 2016

Preliminary Information

This Management’s Discussion and Analysis (“MD&A”) contains information up to and including April 27. 2016.

The following MD&A of North American Nickel Inc. (the “Company”) should be read in conjunction with the audited financial statements for the year ended December 31, 2015 and the related notes contained therein. It should be noted that the audited financial statements for the year ended December 31, 2015 were prepared in accordance with International Financial Reporting Standards (“IFRS”).

All financial information in this MD&A related to 2015 have been prepared in accordance with International financial reporting standards (“IFRS”), and all dollar amounts are expressed in Canadian dollars unless otherwise indicated.

Caution Regarding Forward Looking Statements

Statements contained in this MD&A that are not historical facts are forward-looking statements (within the meaning of the Canadian securities legislation and the U.S. Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements with respect to the future price of metals; the estimation of mineral reserves and resources, the realization of mineral reserve estimates; the timing and amount of estimated future production, costs of production, and capital expenditures; costs and timing of the development of new deposits; success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and the timing and possible outcome of pending litigation. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others, risks related to the integration of acquisitions; risks related to operations; risks related to joint venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of metals; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the sections entitled “Risks and Uncertainties” in this MD&A. Although the Company has attempted to identify important factors that could affect the Company and may cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this MD&A speak only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.

Forward-looking statements and other information contained herein concerning the mining industry and general expectations concerning the mining industry are based on estimates prepared by the Company using data from publicly available industry sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which the Company believes to be reasonable. However, this data is inherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While the Company is not aware of any misstatements regarding any industry data presented herein, the industry involves risks and uncertainties and is subject to change based on various factors.

Description of Business

The Company is a mineral exploration and resource development company engaged in the business of acquiring, exploring and evaluating mineral properties, and either joint venturing, developing or disposing of the properties, when the evaluation is complete. The Company is currently focusing its resources in conducting exploration programs on its Maniitsoq Property, in Greenland and Sudbury, Ontario nickel properties being Post Creek and Halcyon.

Company History

North American Nickel Inc. (the “Company”) was incorporated under the laws of the Province of British Columbia, Canada, by filing of Memorandum and Articles of Association on September 20, 1983, under the name Rainbow Resources Ltd. The company’s name was changed to Widescope Resources Ltd. on May 1, 1984, and to Gemini Technology Inc. on September 17, 1985. In conjunction with a reverse split of its common shares on a five-old for one-new basis, the Company adopted the name International Gemini Technology Inc., effective September 23, 1993. The Company’s name was changed to Widescope Resources Inc., effective July 12, 2006. Effective April 19, 2010, the Company’s shareholders approved a special resolution to reorganize the Company’s capital structure by consolidating in a reverse stock split the existing common shares on the basis of every 2 old shares being equal to 1 new share and concurrently increasing the authorized capital of the Company from 100,000,000 common shares without par value to an unlimited number of common shares without par value. Also effective this date, the Company’s name was changed to North American Nickel Inc. to reflect its new focus. All references to common shares, stock options, warrants and weighted average number of shares outstanding in this discussion and the accompanying consolidated financial statements retroactively reflect the share consolidation unless otherwise noted.

In April 2010, the Company initiated a series of actions to realign its focus into the field of nickel exploration in the prolific nickel belts around Sudbury, Ontario and Thompson, Manitoba. Concurrently, the directors of the Company appointed new senior management to oversee the daily operations of the Company.

On May 3, 2011, the Company’s listing application was conditionally accepted by the TSX-V Venture Exchange. On May 30, 2011, the common shares of the Company began trading under the symbol “NAN”.

On August 15, 2011, the Company was granted an exploration license by the Bureau of Minerals and Petroleum of Greenland for exclusive exploration rights over an area totalling 4,841 square kilometres located near Sulussugut, Greenland.

On March 4, 2012, the Company was granted an additional exploration license by the Bureau of Minerals and Petroleum of Greenland for exclusive exploration rights over an area covering a total of 142 square kilometres license and located near Ininngui, Greenland.

On January 19, 2015, the Company signed an exclusivity agreement with Minelco AS (“Minelco”) to acquire the deepwater Seqi Port (the “Port”). Minelco granted to the Company the right to proceed with a due diligence process on the Port and to negotiate exclusively with Minelco in relation to this transaction according to the terms set out in the agreement. During the exclusivity period, Minelco provided the Company with access to its facilities, personnel, books, records and documents to allow the Company to conduct the due diligence process for the purpose of evaluating the transaction and use its commercially reasonable efforts to provide all documents and information requested by the Company. On March 31, 2015, Minelco and the Company signed an assignment agreement for the Port. Under the terms of the agreement, Minelco will transfer to the Company all its rights, title, and interest in and to the Port. The assignment will, subject to the assumption of closure obligations of DKK 6,000,000 by the Company, be made free of charge with no consideration payable by the Company to Minelco. To date, the Company has completed a surface and underwater due diligence examination of the Seqi pier. Environmental due diligence and a preliminary assessment of reindeer was completed by Golder Associates – INUPLAN in and around the Port and a report has been completed.

Trend Analysis

The business of the Company entails significant risks. Any analysis of the trend of the Company’s activities would reveal this and there is nothing to suggest that these trends will change.

The recoverability of amounts shown for mineral property costs is dependent upon a number of factors including environmental risk, legal and political risk, the existence of economically recoverable mineral reserves, confirmation of the Company’s interests in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete exploration and development, and to attain sufficient net cash flow from future profitable production or disposition proceeds. As of March 31, 2016, the Company had working capital of $2,003,262 (December 31, 2015 — $2,682,397) and a deficit of $24,508,859 (December 31, 2014 — $23,820,013). The Company has sufficient capital to continue its planned operations and to meet its obligations.

When managing capital, the Company’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management adjusts the capital structure as necessary in order to support the acquisition and exploration of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management team to manage its capital.

The properties in which the Company currently has an interest are in the exploration stage. As such, the Company is dependent
on external financing to fund its activities. In order to carry out the planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed. The Company will continue to assess new properties and seek to acquire interests in additional properties if there is sufficient geologic or economic potential and if it has adequate financial resources are available to do so. The Company has not yet determined whether these properties contain ore reserves that are economically recoverable.

Resource Properties

All technical information in this document has been reviewed by Patricia Tirschmann, P. Geo, the qualified person for the Company under National Instrument 43-101.

Maniitsoq, Greenland:

The project is located adjacent to the coastline 80 km north of Nuuk, the capital of Greenland (a safe, stable, mining-friendly jurisdiction) and covers numerous high-grade nickel-copper sulphide & PGM occurrences associated with norite and other mafic-ultramafic intrusions. The deep water coastline adjacent to Maniitsoq is typical of Greenland’s southwest coast is which is pack ice free with a year-round shipping season. The optimum shipping conditions are due to the Irminger current, a tributary of the warming Gulf Stream flowing continuously past the south west coastline of Greenland. The Company acquired the project because it believes that modern, time-domain, helicopter EM systems will be more effective at detecting nickel sulphide deposits in the rugged terrain of Maniitsoq than previous fixed wing geophysical surveys performed in the 1990’s. These earlier surveys failed to produce any drill targets. Helicopter TEM systems were not available in 1990’s and their availability now gives the Company a significant advantage over previous explorers.

Effective August 15, 2011, the Company was granted an exploration license (the “Sulussugut License”) by the Bureau of Minerals and Petroleum (“BMP”) of Greenland for exclusive exploration rights of an area located near Sulussugut, Greenland. The Company paid a license fee of $5,742 (Danish Krones (“DKK”) 31,400) upon granting of the Sulussugut License. The Sulussugut License was valid for 5 years until December 31, 2015, with December 31, 2011 being the first year providing the Company meets the terms of the license, which includes that specified eligible exploration expenditures must be made. The application for another 5 year term on the Sulussugut License was submitted to the Greenland Mineral Licence & Safety Authority (MLSA) which was effective on April 11, 2016, with December 31, 2016 being the sixth year.

In conjunction with the granting of the Sulussugut License, on August 12, 2011, the Company entered into an arm’s length Intellectual Property and Data Acquisition Agreement (the “IP Acquisition Agreement”) with Hunter Minerals Pty Limited (“Hunter”) and Spar Resources Pty Limited (“Spar”). Pursuant to the IP Acquisition Agreement, Hunter and Spar agreed to sell the IP Rights to the Company in consideration for the Company paying $300,000 in cash ($150,000 to each of Hunter and Spar which is paid) and the issuing of 12,960,000 share purchase warrants, 6,480,000 to each of Hunter and Spar exercisable for a period of five years expiring on August 30, 2016. The warrants are exercisable at the following prices, 4,750,000 of the warrants are at a price of $0.50 per share, 4,750,000 of the warrants are at a price of $0.70 per share and 3,460,000 of the warrants are at a price of $1.00 per share. The warrants are subject to an accelerated exercise provision in the event the Company relinquishes its interests in the Maniitsoq Licenses or any other mineral titles held within a defined area of interest without receiving consideration for such relinquishment. The granted warrants have been recorded at a fair value of $1,813,263 using the Black-Scholes option-pricing model. Granting to each of Hunter and Spar or their designates a 1.25% net smelter returns royalty, subject to rights of NAN to reduce both royalties to a 0.5% net smelter returns royalty upon payment to each of Hunter and Spar (or their designates) of $1,000,000 on or before the 60^th day following a decision to commence commercial production on the mineral properties. On August 30, 2011 the Company issued 200,000 common shares at $0.14 per share for a value of $28,000 as a finder’s fee on the Greenland project.


Greenland
Sulussugut License - 2011/54
Exploration commitment		2011			2012			2013			2014			2015
	-
Fixed amount			145,600			148,800			310,400			313,200			317,500
4841 km2 of DKK 1.460 per km2			7,067,860
4841 km2 of DKK 1.490 per km2						7,213,090
3336 km2 of DKK 7.760 per km2									25,887,360
2689 km2 of DKK 7.830 per km2												21,054,870
2689 km2 of DKK 7.940 per km2															21,350,660
2689 km2 of DKK 7.940 per km2


Exploration Obligation			7,213,460			7,361,890			26,197,760			21,368,070			21,668,160

Total Credits Available

Approved exploration expenditures			8,489,457			23,615,611			37,348,783			55,509,353			59,149,846
Exploration obligation			(7,213,460	)		(7,361,890	)		(26,197,760	)		(21,368,070	)		(21,668,160	)
Credit from previous year			—			1,275,997			17,529,718			28,680,741			62,822,024


Total credit	DKK		1,275,997			17,529,718			28,680,741			62,822,024			100,303,710


Carry forward period:
1) 2011	DKK 1,275,997	from 2011 until December 31, 2014
2) 2012	DKK 17,529,718	from 2012 until December 31, 2015
3) 2013	DKK 28,680,741	from 2013 until December 31, 2016
4) 2014	DKK 7,312,671	from 2013 until December 31, 2016
5) 2014	DKK 55,509,353	from 2014 until December 31, 2019
6) 2015	DKK 41,153,864	from 2015 until December 31, 2019

Under the terms of the Sulussugut License, the Company was obligated to reduce the area of the license by at least 30% (1,452 square kilometres) by December 31, 2013. The Company completed this in 2013.

Effective March 4, 2012, the Company was granted an additional exploration license (the “Ininngui License”) by the BMP of Greenland for exclusive exploration rights over an area covering a total of 142 square kilometres The license is located near Ininngui, Greenland. The Company paid a license fee of DKK 32,200 upon granting of the Ininngui License. The Ininngui License is valid for 5 years until December 31, 2016, with December 31, 2012 being the first year. The Ininngui License is contiguous with the Sulussugut License.


Ininngui License - 2012/28
Exploration commitment				2012			2013			2014			2015			2016
			-
Fixed amount					148,800			155,200			313,200			317,500			323,000
142 km2 of DKK 1.490 per km2					211,580
265 km2 of DKK 1.550 per km2								410,750
265 km2 of DKK 7.830 per km2											2,074,950			-			-
296 km2 of DKK 7.940 per km2														2,350,240
296 km2 of DKK 8.080 per km2																	2,391,680


Exploration Obligation					360,380			565,950			2,388,150			2,667,740			2,714,680

Total Credits Available
Approved exploration
expenditures					2,871,899			2,965,890			5,470,428			6,276,098			*6,000,000
Exploration obligation					(360,380	)		(565,950	)		(2,388,150	)		(2,667,740	)		(2,714,680	)
Credit from previous year					-			2,511,519			4,911,459			7,993,737			11,602,095


Total credit			DKK		2,511,519			4,911,459			7,993,737			11,602,095			14,887,415


* estimated expenditures, not yet approved by MLSA
Carry forward period:
	1) 2012	DKK 2,511,519	from 2012 until December 31, 2015
	2) 2013	DKK 1,945,569	from 2012 until December 31, 2015
	3) 2013	DKK 2,965,890	from 2013 until December 31, 2016
	4) 2014	DKK 2,523,309	from 2013 until December 31, 2016
	5) 2014	DKK 5,470,428	from 2014 until December 31, 2017
	6) 2015	DKK 5,325,997	from 2014 until December 31, 2017
	7) 2015	DKK 6,276,098	from 2015 until December 31, 2018

On September 28, 2013, the Ininngui License was enlarged to 265 square kilometres at the Company’s request.

In June 2015, the Ininngui License was enlarged to 296 square kilometres at the Company’s request.

For both licenses, future required minimum eligible exploration expenses will be adjusted each year on the basis of the change to the Danish Consumer Price Index.

Should the Company not incur the minimum eligible exploration expenses on either license in any one year from years 2-5, the Company can pay 50% of the difference in cash to MLSA as full compensation for that year. This procedure may not be used for more than 2 consecutive calendar years. To December 31, 2015, the Company has not used the procedure for either license.

The Company may apply for an additional 5 years for either license following year five of the initial licence. Thereafter, the Company may apply for a license for up to 6 additional years, in 2 year license increments. The Company will be required to pay additional license fees and will be obligated to incur minimum eligible exploration expenses for such years.

The Company may terminate the licenses at any time; however, any unfulfilled obligations applicable to the license will remain in force, regardless of the termination.

Performance Summary

During the period 2012-2015:
Exploration in 2012 continued with the geophysical interpretation of data acquired in 2011. Three dimensional Maxwell models were established by Condor Consulting for the 25 anomalies defined by the 2011 airborne surveys and three of these were selected for priority follow-up prior to the first drill program on the property. Heliborne geophysical surveys by Geotech Ltd. totaling 3,532 line-kilometers over portions of mineral exploration licences 2011/54 and 2012/28 were continued in 2012. Preliminary interpretation of the data was completed August 13, 2012.

The intersection of high grade nickel – copper mineralization at Imiak Hill was announced in November. The mineralization intersected by DDH MQ-12-001 averaged 1.36% nickel, 0.52% copper and 0.07% cobalt over 16.41 meters including 5.12 meters at 2.20% nickel, 0.55% copper and 0.07% cobalt. The mineralization in MQ-12-002 averaged 0.55% nickel, 0.20% copper and 0.02% cobalt over 66.08 meters and included 14.18 meters at 1.33% nickel, 0.38% copper and 0.04% cobalt. A new discovery of shallow nickel-copper-PGE mineralization was announced in December and included 123.94 meters grading: 0.81% nickel, 0.21% copper, 0.03% cobalt and 0.26 g/t platinum + palladium + gold.

Assay and geochemical analyses on samples from the 2012 drilling program were completed in January 2013 and confirmed significant nickel + copper ± cobalt ±PGE mineralization at Imiak Hill and Spotty Hill. The 2013 Maniitsoq exploration plan consisting of 3,000 meters of diamond drilling, surface EM surveys and 550 line-km of heliborne geophysical surveys was finalized in May 2013.

Results from a QEMSCAN (Quantitative Evaluation of Materials by Scanning Electron Microscopy) study for three samples of mineralized drill core at Imiak Hill and Spotty Hill were announced in June. Results indicated that nickel was hosted primarily in pentlandite and that potential existed for good recovery of nickel and copper.

In August and September of 2013 the Company announced the intersection of massive to semi-massive sulphide mineralization at Imiak Hill. Hole MQ-13-026 intersected this mineralization between 142 and 159 m vertically below surface and subsequently hole MQ-13-028 extended the mineralization to 185 m below surface, the deepest intercept at Imiak Hill to date.

Significant mineralization at Imiak North, 950 metres north northeast of Imiak Hill and 1200 metres northwest of Spotty Hill was announced in September. These three closely spaced mineralized zones are referred to as the Imiak Hill Complex (IHC). Later the same month a new discovery within the Fossilik norite intrusion situated approximately 9 kilometres from the IHC was announced. DDH MQ-13-018 intersected 4.53m @1.06% nickel, 0.23% copper, 0.04% cobalt, 0.33 g/t platinum+palladium+gold at 51.8 metres down the hole. This zone remains open at depth and additional drilling is warranted.

Assay results were received in October 2013 from mineralization intersected in DDH MQ-13-026 at Imiak Hill and averaged 3.25% nickel, 0.48% copper and 0.11% cobalt over a core length of 25.51 metres including 18.62 metres at 4.31% nickel, 0.62% copper and 0.14% cobalt. Assay results for holes MQ-13-024 and 019 which intersected mineralization above hole MQ-13-026 returning significant assays including 14.90 metres grading 2.67% nickel, 0.39% copper and 0.09% cobalt and 8.68 metres grading 1.53% nickel, 0.43% copper and 0.06% cobalt, respectively. Additional assays for high-grade intercepts were also announced for DDH MQ-13-029 and MQ-013-027 at Imiak Hill and included 4.65% nickel over a core length of 9.99 metres and 64.11 metres grading 0.45% nickel and 0.20% copper, respectively. DDH MQ-13-022 drilled at Spotty Hill returned 20.07 metres grading 0.68% nickel, 0.28% copper and 0.32g/t platinum+palladium+gold. Assay results from the deepest hole drilled on the Imiak Hill mineralization to date at 180 metres below surface, DDH MQ-13-028, were announced in November 2013 and returned 3.19% nickel, 1.14% copper and 0.11% cobalt over 24.75 metres core length. The mineralization remains open at depth. A new discovery at target P-13 was also announced in November 2013 and included an intercept of from hole MQ-13-032 grading 0.44% nickel, 0.20% copper over 6.51 metres core length in DDH MQ-13-032.

The commencement of surface time-domain electromagnetic and gravity surveys was announced in April 2014 and subsequently Crone Geophysics completed gravity surveys at 655 stations and 67 km of surface Time Domain EM surveys at the IHC. Diamond drilling was commenced with one drill at the IHC and a second drill was used to test regional mineralized targets. In July 2014, new TDEM anomalies were identified at the IHC and Fossilik areas by the Crone surveys and gravity surveys were found to be potentially effective in outlining noritic intrusions in the subsurface. Structural geological mapping was initiated at the IHC and Fossilik in August 2014. An intercept of 11.03 metres of 3.07% nickel at Imiak hill was also announced along with the intersection of near-massive sulphide at Spotty Hill and target P-13.

Additional assay results were received in October including 2.98% nickel, 0.59% copper and 0.86 g/t platinum+palladium+gold over 8.55 metres and 1.69% Ni, 0.34% Cu and 0.50 g/t TPM over 10.60 metres at Spotty Hill.

Additional drilling and assay results at target P-13 were announced in November. Multiple nickel sulphide intersections at target P-013 included 5.85 metres of 2.07% nickel and 0.12% copper in DDH MQ-14-066 and 3.40 metres of 2.07% nickel and 0.34% copper in DDH MQ-14-068. Mineralization was described as net textured to semi-massive sulphide. More new nickel sulphide discoveries were announced in November 2014 including those from the southern portion of the Maniitsoq project and the IHC. Highlights from southern Maniitsoq included 20.10 metres of 0.63% nickel and 0.20% copper in DDHMQ-14-070 at target P-030 and 0.24 metres of 0.85% nickel and 1.80% copper in hole MQ-14-071 at target P-053. At Imiak Hill, DDH MQ-14-072 intersected 16.35 metres of 2.51% nickel and 0.77% copper and confirmed the continuity of mineralization in Zone 10 between holes historical hole IM-9 and MQ-14-037. At Imiak North, DDH MQ-14-073 intersected 61.35 metres of 0.63% nickel and 0.18% copper confirming the steep north easterly plunge of this mineralization.

On March 2, 2015, the Company announced potential high nickel recoveries utilizing SGS Canada Inc. QEMSCAN (Quantitative Evaluation of Minerals by Scanning Electron Microscopy) on its regional targets. Pentlandite was found to be the main nickel-bearing mineral in each sample with nickel contents ranging from 90.1 to 93.1%. Potential recoveries ranged from 96.1 to 97.2% based on liberation, association and exposed characteristics of crushed samples that were stage pulverized to 90% passing 150 µm.

In September, 2015 the Company announced several new nickel sulphide intersections including:

MQ-15-075: 1.06% nickel, 0.24% copper and 0.31 g/t platinum+palladium+gold over 15.55 metres including 1.77% nickel, 0.23% copper and 0.46 g/t platinum+palladium+gold over 6.0 metres at Spotty Hill. These results extended the mineralization by 80m in down plunge direction.
MQ-15-078: 1.16% Ni, 1.00% Cu and 0.27 g/t TPM over 12.15 metres at P-059 (Fossilik area)
MQ-15-079: 1.03% nickel and 0.39% copper over 10.65 metres at P-013
MQ-15-082: 1.98% nickel and 0.62% copper over 23.70 metres at P-053.

During the three months ended March 31, 2016:

On March 30, 2016 the company filed National Instrument 43-101 Technical Report on the Maniitsoq property.

Subsequent Events

On April 11, 2016, the company reported the results of QEMSCAN mineralogical analyses from drill core indicating high nickel recovery from Maniitsoq mineralization.

On April 22, 2016, the Company announced debt financing of $4.5 million CAD with major shareholder The Sentient Group.

Activities contemplated in the future

The Company is preparing for a summer field program consisting of diamond drilling, geophysical and geological surveys.

Sudbury, Ontario nickel properties:

Post Creek Property

On December 23, 2009, the Company executed a letter of intent whereby the Company has an option to acquire the mineral claim known as the Post Creek Property located within the Sudbury Mining District of Ontario. The Company paid a non-refundable deposit of $7,500. On April 5, 2010 the Company entered into an option agreement to acquire rights to Post Creek Property. On March 12, 2013 the Post Creek Property Option Agreement was amended, in order to acquire 100% working interests in the property, subject to certain net smelter return royalties (“NSR”) and advance royalty payments the Company agreed to the following amended consideration, which has been met, cash payments totalling $137,500 and the issuance of 1,000,000 common shares. The Company has exercised its option on Post Creek and as of August 1, 2015 the Company is obligated to pay advances on the NSR of $10,000 per annum, which will be deducted from any payments to be made under the NSR.

The property is located 35 km east of Sudbury in Norman and Parkin townships and consists of 40 unpatented mining claims covering an area of 928 hectares. It is strategically located adjacent to the past-producing Podolsky copper-nickel-platinum group metal deposit of KGHM. The property lies along the extension of the Whistle Offset Dyke Structure which hosted the former INCO Whistle Offset copper-nickel-PGM Mine as well as the Podolsky North and Podolsky 2000 copper-precious metal deposits. For 2009 production at Podolsky was forecast to be 372,049 tons of ore yielding 1.8 million pounds of payable nickel, 28.5 million pounds of payable copper and 27,300 ounces of payable platinum, palladium and gold. Previous operators located the extension of the Whistle Offset Dyke structure on the Post Creek property as a direct result of their geological, geophysical and Mobile Metal Ion geochemical surveys. A reconnaissance rock sample collected along the structure assayed 0.83% Ni, 0.74% Cu, 0.07% Co, 2.24 g/t Pt and 1.05 g/t Pd. Significant potential for nickel-copper-PGM is demonstrated on the Post Creek property.

Performance Summary

A review of all characteristics of the Whistle Offset target and the results of diamond drilling indicate the CJ Zone is more accurately described as a breccia zone rather than a sharp-walled offset dyke. The breccia zone extends along strike from the past-producing Podolsky nickel-copper-platinum group metal deposit and is still considered as a high-priority exploration target. The breccia zone is now interpreted as an embayment structure based on a petrographic study of drill core samples from 2011. The base of this new embayment has not been intersected by drilling, and consequently, the most prospective section of the observed embayment has not been reached. The mapped embayment is open to the east, south and north.

In the fall of 2015 the Company re-logged historical core to improve on the knowledge of the CJ breccia zone. The breccia zone has now been extended for two km south of the trenching and diamond drilling program completed by the Company in 2011.

During the three months ended March 31, 2016:

There was no work performed during the three months ending March 31, 2016

Subsequent Events

There were no subsequent events to report at this time.

Activities contemplated in the future

The Company is planning a prospecting, geological mapping and trenching program in the spring to summer of 2016.

Halcyon Property

On April 5, 2010, the Company entered into an option agreement to acquire rights to Halcyon Property. On March 12, 2013, the Halcyon Property Option Agreement was amended. In order to acquire up to a 100% working interests in the property, subject to certain net smelter return royalties (“NSR”) and advance royalty payments the Company agreed to the following amended consideration, which has been met, cash payments totalling $120,000 and the issuance of 700,000 common shares. Further, commencing on the amended date of August 1, 2015, if the Company exercises its option, the Company will be obligated to pay advances on the NSR of $8,000 per annum, which will be deducted from any payments to be made under the NSR.

The property is located 35 Km NNE of Sudbury in the SE corner of Parkin Twp, and consists of 53 unpatented mining claims for a total of 864 hectares. It is readily accessible by paved and all-weather gravel road. Halcyon is adjacent to the Post Creek property and contains the extension of the metallogenetically significant Whistle Offset Structure now interpreted to represent an embayment. It is approximately 2 km north of the producing Podolsky Mine of FNX Mining. Previous operators on the property defined numerous conductive zones based on induced polarization (I.P.) surveys with coincident anomalous Mobile Metal Ions soil geochemistry. Base and precious metal mineralization have been found in multiple locations on the property but follow-up work was never done. The former producing Jon Smith Mine (nickel-copper-cobalt-platinum) is situated 1 Km North of the property.

Performance Summary

On December 14, 2011, prospecting and a small amount of outcrop stripping were completed in preparation for a drill program. A single hole was drilled on the southeast corner of the property with the purpose of providing geological information and to provide a platform for bore hole pulse EM (“BHPEM”). No anomalies were detected although quartz diorite breccia and partial melt material with 2-3% disseminated pyrrhotite and chalcopyrite was intersected over short core lengths.

During the three months ended March 31, 2016:

There was no work performed during the three months ending March 31, 2016

Subsequent Events

There were no subsequent events to report at this time.

Activities contemplated in the future

The Company is planning a prospecting, geological mapping and trenching program for spring to summer of 2016.

Michigan, United States::

During the three months ended March 31, 2016:

There was no work performed during the three months ending March 31, 2016

Subsequent Events

There were no subsequent events to report at this time.

Activities contemplated in the future

The Company is planning a surface time-domain Electromagnetic survey for the fall of 2016.

Selected Financial Information

The Company’s condensed interim financial statements for the three months ended March 31, 2016 have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and practices. Currency amounts are in Canadian dollars, except where stated otherwise. The following selected financial information is taken from the Condensed Financial Statements and should be read in conjunction with those statements.


				For the three months ended
	March 31, 2016			March 31, 2015			March 31, 2014
Financial Results
Net loss		$	688,846		$	708,006		$	215,624
Basic loss per share			0.00			0.00			0.00

*As at:*	March 31, 2016			December 31, 2015			December 31, 2014

Balance Sheet Data
Share capital		$	51,165,026		$	51,165,026		$	43,268,118
Common shares issued	207,629,506			207,629,506			169,964,679
Weighted average shares outstanding	207,629,506			188,384,506			157,986,561
Total assets		$	32,129,452		$	32,729,177		$	27,050,038
Net assets (liabilities)	31,998,063			32,479,573			26,752,694
Exchange rates (US$ to CDN$) period average			1.3724			1.2785			1.1046

Results of Operations

Three Months Ended March 31, 2016 compared with Three Months Ended March 31, 2015

For the three months ended March 31, 2016, the Company incurred a net loss of $688,846 compared to a net loss of $708,006 for the three months ended March 31, 2015. The decrease of $19,160 in net loss is a result of a smaller value of share-based payments of $207,336 vs $254,791 generating a decrease of $47,455, along with a decrease of $38,303 in Investor relations, a decrease of $16,429 in general and administrative costs and a decrease in travel of $21,909. During the three months ending March 31, 2016 management fees were $56,000 higher, salaries were $30,869 higher.

The general operating costs decreased by $19,160 which is mainly the result of the changes made to management and staff in 2015. This resulted in an increase of $56,000 in management fees and an increase of $30,869 in salaries. Travel and accommodation for decreased as a result of the timing of technical meetings.

The Company has shared office space with VMS Ventures Inc. with the rent split at 40% for the Company and some general and administrative costs split at 50%. During the year 2015, the Company started consolidating its own business functionality and as a result a couple employees status went to full-time positions. The Company maintains its exploration staff as full-time employees with most of the cost being directly related to a project expense and the balance as a general and administrative cost. For the current three months ending March 31, 2016 general and administrative costs decreased by $16,429 as a result of restructuring the office status.

Investor relations reported a decrease of $38,303 mainly as a result of using less advertising publications decreasing costs by $26,605 and trade shows costs were lower by $7,271.

As at December 31, 2015, share capital increased since December 31, 2014 due to the Company closing a private placement of 29,054,079 units for net proceeds of $6,157,591, having 1,149,000 stock options exercised for net proceeds of $172,350 and having 7,461,748 warrants exercised for net proceeds of $1,566,967. As at December 31, 2015, total assets increased by $5,679,139 since December 31, 2014 as a result of capital expenditure purchases of $137,662 mainly computer software and spending $9,086,094 on the exploration properties and raising funds through a private placement. As at December 31, 2014, the Company had total assets of $27,050,038, an increase of $8,334,119 since December 31, 2013 which reported total assets of $18,715,919. The increase is a result of the Company raising funds through a private placement of $9,379,970 and using the funds on the drill program in Greenland.

Selected Financial Data Quarterly


	Three months ended
	March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
Net loss	$(688,846)			$(539,487)			$(656,013)			$(485,464)
Basic loss per share			0.00			0.00			0.00			0.00

	Three months ended
	March 31, 2015			December 31, 2014			September 30, 2014			June 30, 2014

Net loss	$(708,006)			$(585,679)			$(2,387,359)			$(552,345)
Basic loss per share			0.00			0.00			0.01			0.00

Balance Sheet Data
*As at:*	March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015

Share capital	$51,165,026			$51,165,026			$51,224,376			$44,807,995
Common shares issued			207,629,506			207,629,506			207,629,506			177,476,427
Weighted average shares outstanding			207,629,506			188,384,506			181,759,174			172,577,183
Total assets		$	32,129,452		$	32,729,177		$	33,471,660		$	27,868,064
Net assets (liabilities)		$	31,998,063		$	32,479,573		$	33,121,035		$	27,359,357
*As at:*	March 31, 2015			December 31, 2014			September 30, 2014			June 30, 2014

Share capital	$43,893,265			$43,268,118			$43,256,764			$43,255,258
Common shares issued			172,955,855			169,964,679			169,884,679			169,844,853
Weighted average shares outstanding			171,280,855			157,986,561			153,952,324			145,835,740
Total assets		$	27,076,635		$	27,050,038		$	28,035,605		$	28,347,763
Net assets (liabilities)		$	26,922,125		$	26,752,694		$	27,053,470		$	27,446,644

During the three months ended March 31, 2016, the Company granted stock options reporting $207,336 in share-based payment and reported an increase of $56,000 in management fees and an increase of $47,455 in salaries.

During the three months ended September 30, 2015, the Company granted stock options reporting $319,015 in share-based payment. The Company also closed a private placement increasing share capital by $6,621,941. During the current three month period, the Company reported $102,733 was used on property investigation and the port development and reported a share-based payment amount of $56,259 for the fair value of broker’s warrants granted in the private placement. During the current three month period the Company had 1,099,000 stock options exercised for net proceeds of $109,900.

During the three months ended June 30, 2015, the Company reported $7,965 in share-based payment as a result of vested options. During the three month period ended June 30, 2015, there was an increase in legal fees of $53,617, an increase in consulting fees of $29,784 as a result of corporate development meetings which was the reason for the increase in travel of $18,939. As well in the three month period ending June 30, 2015, there was $27,856 spent on the port development. During the three months ended June 30, 2015, the Company received $949,320 for some warrant exercises at $0.21 per share

During the three months ended March 31, 2015, the Company reported a share-based payment of $238,194 and reported an increase of $82,250 in management fees and an increase of $51,790 in corporate travel. An increase of $43,288 was reported in general and administrative due to relocating to the new office space.

During the three months ended December 31, 2014, the Company reported a share-based payment of $286,983 and had an increase in management fees and corporate travel of $59,928 as a result in changes to management and corporate development.

During the three months ended September 30, 2014, the Company reported a share-based payment of $1,996,792 as a result of granting stock options and had an increase in foreign exchange loss of $140,368 as a result of the drill program in Greenland.

During the three months ended June 30, 2014, the Company reported a foreign exchange loss of $129,489 as a result of the drill program in Greenland with most costs converted from DKK. During the three months ended June 30, 2014 the Company had an increase in management fees of $141,000 due to the resignation of the CEO.

During the three months ended June 30, 2014, the Company raised funds of $9,379,970 through a private placement accounting for the increase in total assets and share capital. In the quarter ended December 31, 2013, the Company issued 18,276,199 common shares for warrant exercise at $0.21 per share for proceeds of $3,838,002 which was the reason for the increase in share capital and total assets.

Liquidity

As at March 31, 2016, the Company had accumulated losses totaling $24,508,859. The Company had working capital of $2,003,262 at March 31, 2016. The continuation of the Company is dependent upon the continued financial support of shareholders, its ability to raise capital through the issuance of its securities, as well as obtaining long-term financing when the company concludes an appropriate merger or acquisition agreement.

On April 22, 2016 the entered into a term loan with Sentient Executive GP IV Limited and received an advance of $4,500,000. The loan is due on April 30, 2017 and has been made on an interest free basis. Sentient is to be paid 952,380 common shares, which is equivalent value of 2.2% of the principal amount of the loan, as a fee for advancing the loan. The loan is subject to early pre-payment in the event that, during the term of the loan, the Company completes a private placement of gross proceeds of $2,000,000 or more

The Company has financed its operations to date primarily through the issuance of common shares and exercise of stock options and warrants. The Company continues to seek capital through various means including the issuance of equity and/or debt and the securing of joint venture partners where appropriate.

Capital Management

The properties in which the Company currently has an interest are in the exploration stage. As such, the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.

Management considers its approach to capital management to be appropriate given the relative size of the Company. There were no changes in the Company’s approach to capital management during the year.

Financial Instruments and Other Instruments

The Company’s financial instruments consist of cash and cash equivalents, receivables and trade payables and accrued liabilities. Cash and cash equivalents are designated as held for trading and therefore carried at fair value, with the unrealized gain or loss recorded in income. Receivables are designated as loan receivables and trade payables, are designated as other financial liabilities and recorded at amortized cost. Marketable securities are available for sale with the unrealized gain or loss recorded in other comprehensive income.

The fair value hierarchy establishes three levels to classify inputs to the valuation techniques used to measure fair value. Level 1 inputs are quoted market prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable (supported by little or no market activity).

Cash and cash equivalents are stated at fair value and are classified as Level 1 of the fair value hierarchy. The fair values of accounts receivables and trade payables approximate carrying value because of the short term nature of these instruments.

The fair value of available for sale investments are determined based on a market approach reflecting the closing price of each particular security at the closing balance sheet date. The closing price is a quoted market price obtained from the exchange that is the principal active market for the particular security, and therefore available for sale securities are classified within Level 1 of the fair value hierarchy.

Financial Instrument Risk Factors

Credit Risk
The Company’s credit risk is primarily attributable to cash, short-term investments and amounts receivable. Cash and cash equivalents, and short-term investments are held with one reputable Canadian chartered bank which is closely monitored by management. Financial instruments included in amounts receivable consist primarily of HST/GST recoverable from the Canadian government. Management believes that the credit risk concentration with respect to financial instruments included in cash and cash equivalents, short-term investments and amounts receivable is minimal.

Liquidity Risk
The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at March 31, 2016, the Company held cash and a short-term investment totaling $2,051,820 (December 31, 2015 — $2,824,923) and had current liabilities of $131,389 (December 31, 2015 — $249,604). All of the Company’s liabilities have contractual maturities of less than 30 days and are subject to normal trade terms.

Market Risk

i) Interest Rate Risk

The Company had cash balances and no interest bearing debt. The Company’s current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the creditworthiness of its banks. As of March 31, 2016, the Company had non-interest bearing accounts with one Canadian chartered bank.

ii) Foreign Currency Risk

The Company is exposed to the financial risk related to fluctuations of foreign exchange rates. The Company operates in Canada and Greenland and a portion of exploration and evaluation assets are incurred in US dollars, Euros and Danish Krones (“DKK”). Foreign currency risk is considered low as the majority of transactions are settled and reported in Canadian dollars.

iii) Price Risk

Accounting Standards Not Yet Effective

Additional Disclosure for Venture Issuers Without Significant Revenue
The business of the Company entails significant risks, and an investment in the securities of the Company should be considered highly speculative. An investment in the securities of the Company should only be undertaken by persons who have sufficient financial resources to enable them to assume such risks. The following is a general description of all material risks, which can adversely affect the business and in turn the financial results, ultimately affecting the value of an investment the Company:

The Company has no significant revenues.
The Company has limited funds.
There is no assurance that the Company can access additional capital.
There is no assurance that the Company will be successful in its quest to find a commercially viable quantity of mineral resources.
The Company has a history of operating losses and may have operating losses and a negative cash flow in the future.
The Company’s auditors have indicated that U.S. reporting standards would require them to raise a concern about the company’s ability to continue as a going concern.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements.

Property Contractual Obligations

Post Creek
Commencing August 1, 2015, the Company is obligated to pay advances on the NSR of $10,000 per annum, totalling $5,000 (paid) during the three months ended March 31, 2016,YTD amount paid $10,000 which will be deducted from any payments to be made under the NSR.

Halcyon
Commencing August 1, 2015, the Company is obligated to pay advances on the NSR of $8,000 per annum, totalling $4,000 (paid) during the three months ended March 31, 2016, YTD amount paid $8,000 which will be deducted from any payments to be made under the NSR.

Related Party Transactions

Related party transactions were in the normal course of business and have been recorded at the exchange amount which is the fair value agreed to between the parties. Amounts due to related parties are unsecured, non-interest bearing and without specific terms of repayment.

During the three months ended March 31, 2016 and prior years ending December 31, 2015 and 2014, the Company entered into transactions with related parties comprised of directors, officers and companies with common directors as follows:

Related party Nature of transaction—

Mount Morgan Resources Ltd. Geological consulting fees provided by Mark Fedikow, President for a monthly retainer of $6,000. Effective June 16, 2014, Mark Fedikow was assigned interim CEO until December 2014. Effective September 1, 2015, Mark Fedikow was appointed a full-time employee position as President for an annual salary of $200,000.

Dockside Capital Group Inc. Management fees for services provided by 2 directors for a monthly retainer of $4,000.

VMS Ventures Inc. Management fees for services provided by Rick Mark for a monthly retainer of $8,000, as amended April 1, 2013, CEO, effective June 15, 2014 Rick Mark resigned, Cheryl Messier for a monthly retainer of $5,750, effective January 1, 2014, CFO, Neil Richardson adjusted monthly retainer of $6,000, COO and shared administrative costs. Effective January 1, 2015, separate employee agreements were done for Neil and Cheryl separating both Companies. The North American Nickel Inc. agreements provided a monthly fee to Neil of $10,000 and a monthly fee to Cheryl of $5,750.


Jim Clucas 667981 BC Ltd. John Sabine Keith Morrison Christopher Messina		A stipend of $2,000 per month for an independent director. A stipend to John Roozendaal of $2,000 per month for an independent director. A stipend of $3,000 per month for a director and non-executive chairman. Appointed CEO for a monthly retainer of $27,083. A stipend of $2,000 per month for an independent director.

Included in trade payables and accrued liabilities as at March 31, 2016 is $4,000 (December 31, 2015 — $24,026) owing to directors for stipends.

During the three months ended March 31, 2016, the Company recorded $3,947 (December 31, 2015 - $216,895) in legal fees charged by a legal firm in which the Company’s chairman is a consultant.

During the three months ended March 31, 2016, the Company recorded $10,338 (March 31, 2015 - $8,767) in rent and utilities expense to VMS Ventures Inc.

For the three months ended March 31, 2016, the Company paid $170,250 (March 31, 2015 — $114,250) for management fees. Paid to Keith Morrison, CEO was $81,250, Mark Fedikow, President was $50,000 and paid to directors for stipends was $39,000.

Included in exploration and evaluation assets for the period ended March 31, 2016 is $23,277 (December 31, 2015 – $94,039) which was paid regarding geological fees for Neil Richardson, COO.

Included in geological consulting fees for the three months ended March 31, 2016 is $23,070 (March 31, 2015 – $32,521) which was paid regarding geological fees for Neil Richardson, COO.

The Company has identified certain directors and certain senior officers as its key management personnel. The compensation costs for key management personnel for the three months ended March 31, 2016 and March 31, 2015 are as follows:


	Period ended		Period ended
	March 31,		March 31,
	2016		2015
			$
Geological consulting fees — expensed	$	23,070		14,521
Geological consulting fees - capitalized		23,277		19,564
Management fees — expensed		170,250		132,250
Salaries — expensed		21,563		17,250
Stock-based compensation		136,319		3,121

	$	374,478	$
				186,706

On April 22, 2016, the Company entered into a term loan with Sentient Executive GP IV Limited, which one of the directors is associated with, and received an advance of $4,500,000. The loan is due on April 30, 2017 and has been made on an interest free basis. Sentient is to be paid 952,380 common shares, which is equivalent value of 2.2% of the principal amount of the loan, as a fee for advancing the loan. The loan is subject to early pre-payment in the event that, during the term of the loan, the Company completes a private placement of gross proceeds of $2,000,000 or more.

Share Capital Data

The following table sets forth the Company’s share capital data as at April 27, 2016


Common Shares			207,629,506
-issued & outstanding
Preferred Shares			590,930
-issued & outstanding
Options
-issued & outstanding			15,930,500
Warrants
-issued & outstanding			27,738,344

Further Information

Additional information about the Company is available at the Canadian disclosure website www.sedar.com

North American Nickel Inc.
Form 52-109FV2
Certification of Interim Filings
Venture Issuer Basic Certificate

I, Keith Morrison, CEO of North American Nickel Inc. certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim

filings”) of North American Nickel Inc. (the “issuer”) for the interim period ended March 31, 2016.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

Date: May 3, 2016

(signed)

Keith Morrison
CEO

NOTE TO READER

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of

i) controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

North American Nickel Inc.
Form 52-109FV2
Certification of Interim Filings
Venture Issuer Basic Certificate

I, Cheryl Messier, CFO of North American Nickel Inc. certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim

filings”) of North American Nickel Inc. (the “issuer”) for the interim period ended March 31, 2016.

Date: May 3, 2016

(signed)

Cheryl Messier
CFO

NOTE TO READER

North American Nickel Inc. ———————————————————————————————————
(Translation of registrant’s name into English)

British Columbia ———————————————————————————————————
(Jurisdiction of incorporation or organization)

PO Box 63623 Capilano PO North Vancouver, BC Canada V7P 3P1
——————————————————————————————————— (Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: [x] Form 20-F [ ] Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: [ ] Yes [x] No

		North American Nickel Inc.

Date: May 4, 2016	By:	Cheryl Messier
	Name:	Cheryl Messier
	Title:	Chief Financial Officer

Exhibit No.		Description

99.1		Q1 2016 Financial Statements
99.2		Q1 2016 Management Discussion and Analysis
99.3		CEO Certification Q1 2016
99.4		CFO Certification Q1 2016