North American Nickel Inc.

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

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the quarter ended March 31, 2017

(In accordance with International Financial Reporting Standards (“IFRS”) and stated in thousands of Canadian dollars, unless otherwise indicated)

INDEX

Notice to Reader of the Unaudited Condensed Interim Financial Statements

Condensed Interim Consolidated Financial Statements

Condensed Interim Consolidated Statements of Financial Position

Condensed Interim Consolidated Statements of Comprehensive Loss

Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity

Condensed Interim Consolidated Statements of Cash Flows

Notes to the Condensed Interim Consolidated Financial Statements

NOTICE TO READER OF THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three month period ended March 31, 2017

In accordance with National Instrument 51-102, of the Canadian Securities Administrators, North American Nickel Inc. (the “Company” or “North American Nickel”) discloses that its auditors have not reviewed the unaudited condensed interim consolidated interim financial statements.

The unaudited condensed interim consolidated financial statements of the Company for the three month period ended March 31, 2017 (“Financial Statements”) have been prepared by management. The Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto of the Company for the fiscal year ended December 31, 2016, which are available at the SEDAR website under the Company’s profile (www.sedar.com). The Financial Statements are stated in thousands of Canadian dollars, unless otherwise indicated, and are prepared in accordance with International Financial Reporting Standards (“IFRS”).

Condensed Interim Consolidated Statements of Financial Position

(Unaudited — Expressed in thousands of Canadian dollars)


	Notes		March 31, 2017			December 31, 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents				688			630
Short term investments		4		1,700			2,700
Receivables and other current assets		5		152			141
TOTAL CURRENT ASSETS				2,540			3,471

NON-CURRENT ASSETS
Property, plant and equipment				41			55
Exploration and evaluation assets		6		38,763			38,342
Reclamation of deposit		6		14			14
TOTAL NON-CURRENT ASSETS				38,818			38,411

TOTAL ASSETS				41,358			41,882

LIABILITIES
CURRENT LIABILITIES
Trade payables and accrued liabilities		7, 9		160			181
TOTAL CURRENT LIABILITIES				160			181

TOTAL LIABILITIES				160			181

EQUITY
Share capital — preferred		8		591			591
Share capital – common		8		62,315			62,315
Reserve		8		3,218			2,767
Deficit				(24,926	)		(23,972	)

TOTAL SHAREHOLDERS’ EQUITY				41,198			41,701

TOTAL LIABILITIES AND EQUITY				41,358			41,882

Nature of Operations (Note 1) and Subsequent Events (Note 13)

The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.

Approved by the Board of Directors on May 25, 2017


“signed”		“signed”
Keith Morrison Director		Doug Ford Audit Committee Chair


Condensed In		terim Consolidated Statements of Comprehensive Loss


(Unaudited -		Expressed in thousands of Canadian dollars)


			Three-months ended
			March 31,
	Notes		2017			March 31, 2016
EXPENSES
General and administrative expenses		9		(491	)		(459	)
Property investigation and port development				—			(7	)
Amortization				(14	)		(20	)
Share-based payments		8		(451	)		(207	)
				(956	)		(693	)

OTHER ITEMS
Interest income				5			4
Foreign exchange loss				(3	)		—

				2			4

TOTAL COMPREHENSIVE LOSS FOR THE PERIOD				(954	)		(689	)

Weighted average number of common shares outstanding				269,778,932			207,629,506

Basic and diluted loss per share				(0.01	)		(0.00	)

The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.


Condensed Interim Consolidated Statements of Chang		es in Eq		uity


(Unaudited — Expressed in thousands of Canadian do		llars)


                                               Number     Share   Preferred                                 Total
                              Notes            Shares   Capital       Stock   Reserve           Deficit    Equity

   BALANCE AT DECEMBER
   31, 2015                                  207,629,506       50,574            591        5,135             (23.820)      32,480

Net and
comprehensive loss
for the period                                   -         -           -         -             (689)     (689)

Share-based Payments         8                   -         -           -              207         -       207

   BALANCE AT MARCH 31, 2016                 207,629,506       50,574            591             (5,342)      (24,509)      31,998
                                       ===========   =======   =========   ==============   =======    ======

   BALANCE AT DECEMBER
   31, 2016                                  368,581,886       62,315            591               2,767      (23,972)      41,701

Net and
comprehensive loss
for the period                                                                                 (954)     (954)

Share-based Payments         8                             -           -              451         -       451

   BALANCE AT MARCH
   31, 2017                                  368,581,886       62,315            591               3,218      (24,926)      41,198
                                       ===========   =======   =========   ==============   =======    ======

The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.

Condensed Interim

Consolidated Sta

tements of Cas

h Flows

(Unaudited — Expre

ssed in thousand

s of Canadian

dollars)


			Three months ended
	Notes		March 31, 2017			March 31, 2016
OPERATING ACTIVITIES
Loss for the period				(954	)		(689	)
Items not affecting cash:
Amortization				14			20
Share based payments		8		451			207
Interest income				(5	)		(5	)
Changes in working capital		10		(32	)		(91	)
Other:
Interest received				5			3
Net cash used in operating activities				(521	)		(555	)

INVESTING ACTIVITIES
Expenditures on exploration and evaluation assets		6		(421	)		(215	)
Short-term investments				1,000			500
Purchase of equipment				—			(3	)

Net cash used in investing activities				579			282

FINANCING ACTIVITIES
Net cash provided by financing activities				—			-

Change in cash equivalents for the period				58			(273	)
Cash and cash equivalents, beginning of the period				630			525

Cash and cash equivalents, at the end of the period				688			252

The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.

1. NATURE AND CONTINUANCE OF OPERATIONS

North American Nickel Inc. (the “Company” or “NA Nickel”) 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, North Vancouver, British Columbia, Canada, and V7P 3P1. The Company’s common shares trade on the TSX Venture Exchange (“TSXV”) 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 interim consolidated 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 condensed interim consolidated 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. Although the Company has been successful in its past fundraising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future. 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.

The condensed interim consolidated financial statements were approved and authorized for issuance by the Board of Directors of the Company on May 25, 2017.

2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

(a) Statement of Compliance

These condensed interim consolidated financial statements were prepared in accordance with International Financial Reporting Standards (“IFRS”), including IAS 34 Interim Financial Statements. The condensed interim consolidated financial statements do not include all of the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company’s audited annual financial statements for the year ended December 31, 2016. Any subsequent changes to IFRS that are reflected in the Company’s consolidated financial statements for the year ended December 31, 2017 could result in restatement of these condensed interim consolidated financial statements.

(b) Basis of Preparation

These condensed interim consolidated financial statements have been prepared under the historical cost convention, modified by the revaluation of any financial assets and financial liabilities where applicable. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the Company’s accounting policies.

The significant accounting policies used in the preparation of these condensed interim consolidated financial statements are consistent with those used in the preparation of the annual consolidated financial statements for the year ended December 31, 2016.

(c ) Basis of consolidation

These condensed interim consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary, North American Nickel (US) Inc. which was incorporated in the State of Delaware on May 22, 2015. Consolidation is required when the Company is exposed, or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. All intercompany transactions, balances, income and expenses are eliminated upon consolidation.

3. CHANGES IN ACCOUNTING POLICIES

New standards adopted during the three-month period ended March 31, 2017:

IAS 7 “Statement of Cash Flows”

Disclosures related to financing activities was amended to require disclosures about changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. This amendment is effective for years beginning on or after January 1, 2017. The adoption of these amendments did not result in any impact to the Company’s financial statements.

IAS 12 “Income Taxes”

Deferred tax was amended to clarify (i) the requirements for recognizing deferred tax assets on unrealized losses; (ii) deferred tax where an asset is measured at a fair value below the asset’s tax base, and (iii) certain other aspects of accounting for deferred tax assets. This amendment is effective for years beginning on or after January 1, 2017. The Company has not yet assessed the impact of this standard. The adoption of these amendments did not result in any impact to the Company’s financial statements.

Standards, Interpretations and Amendments Not Yet Effective:

IFRS 9 “Financial Instruments” (IFRS 9)

IFRS 9 addresses classification and measurement of financial assets. It replaces the multiple category and measurement models in IAS 39 for debt instruments with a new mixed measurement model having only two categories: amortized cost and fair value through profit and loss. IFRS 9 also replaces the models for measuring equity instruments. Such instruments are either recognized at fair value through profit or loss or at fair value through other comprehensive income. Where equity instruments are measured at fair value through other comprehensive income, dividends are recognized in the statement of earnings to the extent that they do not clearly represent a return of investment; however, other gains and losses (including impairments) associated with such instruments remain in accumulated comprehensive income indefinitely. Requirements for financial liabilities were added to IFRS 9 in October 2010 and they largely carried forward existing requirements in IAS 39 except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss are generally recorded in other comprehensive income. This standard is effective for annual periods beginning on or after January 1, 2018. The Company has not yet assessed the impact of this standard.

IFRS 15 “Revenue from Contracts with Customers”

IFRS 15 was issued in May 2014 to replace IAS 18, Revenue, IAS 11, Construction Contracts, and related interpretations on revenue. IFRS 15 establishes principles to address the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. IFRS 15 will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple element arrangements. Companies can elect to use either a full or modified retrospective approach when adopting this standard and it is effective for annual periods beginning on or after January 1, 2018. The Company has not yet assessed the impact of this standard.

IFRS 16 “Leases”

IFRS 16 replaces current guidance in IAS 17. Under IAS 17, lessees were required to make a distinction between a finance lease (on the balance sheet) and an operating lease (off balance sheet). IFRS 16 now requires lessees to recognize a lease liability reflecting future lease payments and a “right-of-use asset” for virtually all lease contracts. The IASB has included an optional exemption for certain short-term leases and leases of low value assets, however this exemption can only be applied by lessees. The standard applies to annual periods beginning on or after January 1, 2019, with earlier application permitted if IFRS 15, Revenue from Contracts with Customers, is also applied. The Company has not yet assessed the impact of this standard.

4. 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. During the period ended March 31, 2017, the instrument was yielding an annual interest rate of 1.10% (March 31, 2016 — 0.90%).

5. RECEIVABLES AND OTHER CURRENT ASSETS

A summary of the receivables and other current assets as of March 31, 2017 is detailed in the table below:


	March 31,		December 31,
	2017		2016
Sales taxes receivable		42		17
Interest receivable		9		9
Other current assets		101		115

		152		141

Other current assets are comprised of prepaid insurance and prepaid expenses.

6. EXPLORATION AND EVALUATION ASSETS


	Canada				US		Greenland
	Post Creek		Halcyon		Section 35		Maniitsoq		Total
	Property		Property		Property		Property
Acquisition
Balance, December 31, 2016		268		206		3		20		497
Acquisition costs – cash		5		4		3		16		28

Balance, March 31, 2017		273		210		6		36		525

Exploration
Balance, December 31, 2016		1,085		173		—		36,587		37,845
Administration		—		—		—		24		24
Corporate social responsibility		—		—		—		4		4
Drilling expenses		2		—		—		184		186
Geology		9		—		—		110		119
Geophysics		—		—		—		36		36
Technical studies		—		—		—		24		24

		11		—		—		382		393

Balance, March 31, 2017		1,096		173		—		36,969		38,238

Total, March 31, 2017		1,369		383		6		37,005		38,763


	Canada				US		Greenland
	Post Creek		Halcyon		Section 35 Property		Maniitsoq		Total
	Property		Property				Property
Acquisition
Balance, December 31, 2015		258		198		—		11		467
Acquisition costs – cash		5		4		17		—		26

Balance, March 31, 2016		263		202		17		11		493

Exploration
Balance, December 31, 2015		1,005		148				28,083		29,236
Administration		—		—		—		4		3
Consulting services		12		2		—		141		155
Storage		—		5				4		9
Technical studies		—		—				21		21
		12		7				170		188

Balance, March 31,2016		1,017		155				28,253		29,425

Total, March 31, 2016		1,280		357		17		28,264		29,918

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.

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 per annum, totalling $10 during the year ended December 31, 2016, the total of which will be deducted from any payments to be made under the NSR. The total advances paid during the three-month period ended March 31, 2017 were $5, (March 31, 2016 — $5).

During the three-month period ended March 31, 2017, the Company incurred exploration expenditures totalling $11 (March 31, 2016 — $12) 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 per annum, totalling $8 during the year ended December 31, 2016, the total of which will be deducted from any payments to be made under the NSR.

During the three-month period ended March 31, 2017, the Company incurred $4 (March 31, 2016 — $11) in exploration and license related expenditures on the Halcyon Property.

Maniitsoq

The Company has been granted certain exploration licenses, by the Bureau of Minerals and Petroleum (“BMP”) of Greenland for exclusive exploration rights of an area comprising the Maniitsoq Property, located near Ininngui, Greenland. The Property is subject to a 2.5% NSR. The Company can reduce the NSR to 1% by paying $2,000 on or before 60 days from the decision to commence commercial production.

At the expiration of the first license period, the Company may apply for a second licence period (years 6-10), and the Company may apply for a further 3-year licence for years 11 to 13. Thereafter, the Company may apply for additional 3-year licences for years 14 to 16, 17 to 19 and 20 to 22. 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 according to the licenses will remain in force, regardless of the termination

Future required minimum exploration expenditures will be adjusted each year on the basis of the change to the Danish Consumer Price Index.

During the three-month period ended March 31, 2017, the Company spent in aggregate of $398 in exploration and license related expenditures on the Maniitsoq Property, (March 31, 2016 — $148).

Sulussugut License

(All references to amounts in Danish Krones, “DKK” are in thousands of DKK)

Effective August 15, 2011, the Company was granted an exploration license (the “Sulussugut License”) by the BMP of Greenland for exclusive exploration rights of an area located near Sulussugut, Greenland. The Company paid a license fee of $6 (DKK 31) 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. 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.

To December 31, 2015, under the terms of the preliminary license, the Company completed the exploration requirements of an estimated minimum of DKK 83,809 (approximately $15,808) between the years ended December 31, 2011 to 2015 by incurring $26,116 on the Sulussugut License. The accumulated exploration credits held at the end to December 31, 2015, of DKK 100,304 can be carried forward until 2019. Under the terms of the second license period, the Company had no minimum required exploration for the year ended December 31, 2016. As of December 31, 2016, the Company has spent $33,873 on exploration costs for the Sulussugut License.

Under the terms of the preliminary Sulussugut License the Company was obligated to reduce the area of the license by at least 30%, which was accomplished.

During the year ended December 31, 2016, the Company had approved exploration expenditures of DKK 61,109 (approximately $12,032) which results in the total carried credits for the Sulussugut License at DKK 161,413 (approximately $31,382).

During the three-month period ended March 31, 2017, the Company spent a total of $355 in license related expenditures, (March 31, 2016 — $123).

Ininngui License

Effective March 4, 2012, the Company was granted an 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 $6 (DKK 32) upon granting of the Ininngui License. The Ininngui License was 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 December 31, 2016, the Company’s expenditures exceeded the minimum requirement and the Company has a surplus of DKK 15,677 (approximately $3,044) and the Company was granted a credit for the excess, which may be used towards future expense requirements on the Ininngui License until the following years; year 2018, DKK 2,611, year 2019, DKK 6,276 and year 2020, DKK 6,790, and should the Company be granted an extension on the exploration license.

The required minimum exploration expenditures on the Ininngui License for year 5, ending December 31, 2016 was DKK 2,715 (approximately $535). As of December 31, 2016, the Company has spent $2,721 on exploration costs for the Ininngui License.

Should the Company not incur the minimum exploration expenditures on the 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, 2016, the Company has not used the procedure for the license.

During the three-month period ended March 31, 2017, the Company spent a total of $43 in exploration and license related expenditures, (March 31, 2016 — $25).

Section 35 Property

On January 4, 2016, the Company entered into a 10 year Metallic Minerals Lease (the “Lease”) with the Michigan Department of Natural Resources for an area covering approximately 320 acres. The terms of the Lease require an annual rental fee at a rate of US $3.00 per acre for years 1-5 and at a rate of US $6.00 per acre for years 6-10. The Company shall pay a minimum royalty at a rate of US $10.00 per acre for the 11^th year onwards, with an increase of an additional US $5.00 per acre per year up to a maximum of US $55.00 per acre per year. A production royalty of between 2% — 2.5% is payable from production of minerals and/or mineral products from an established mining operation area. The Company paid the first year rental fee and the required reclamation deposit of $14 (US $10,000). The Department of Natural Resources shall annually review the level of the reclamation deposit and shall require the amount to be increased or decreased to reflect changes in the cost of future reclamation of the leased premises.

During the three-month period ended March 31, 2017, the Company spent a total of $3 in license related expenditures, (March 31, 2016 — $17).

7. TRADE PAYABLES AND ACCRUED LIABILITIES


	March 31,		December 31,
	2017		2016
Trade payables		87		133
Amounts due to related parties (Note 9)		—		2
Accrued liabilities		73		46

		160		181

8. SHARE CAPITAL, WARRANTS AND OPTIONS

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.

a) Common shares issued and outstanding

There were no common shares issued during the period ended March 31, 2017 and March 31, 2016.

As at March 31, 2017, the Company has 368,581,886 common shares issued and outstanding, (March 31, 2016 – 207,629,506).

On April 28, 2016, the Company issued 952,380 common shares at a fair value of $95,238, as a finance fee.

On July 21, 2016, the Company closed a private placement of 92,668,907 units at a price of $0.075 per unit for gross proceeds of $6,950. Each unit consists of one common share of the Company and one half of one common share purchase warrant. Each whole warrant entitles the purchaser to purchase an additional common share at a price of $0.12 per share until July 21, 2018. Share issuance costs of $571 were incurred in connection with the private placement. The Company also issued 1,203,695 agent’s warrants, exercisable at $0.075 per warrant until July 21, 2018. The Company allocated a fair value of $48 to the agent’s warrants under the Black-Scholes Option Pricing Model with the following assumptions: expected life of 2 years, expected dividend yield of 0%, a risk-free interest rate of 0.57% and an expected volatility of 91.06%. The Company also granted the agent an overallotment option, which expired unexercised.

On September 12, 2016, the Company closed a private placement and issued 67,331,093 units at a price of $0.075 per unit for gross proceeds of $5,050. Each unit consists of one common share of the Company and one half of one common share purchase warrant. Each whole warrant entitles the purchaser to purchase an additional common share at a price of $0.12 per share until September 12, 2018.

b) Preferred shares issued and outstanding

As at March 31, 2017 and March 31, 2016, there are 590,931 series 1 preferred shares outstanding.

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.

c) Warrants

A summary of common share purchase warrants activity during the three-month period ended March 31, 2017 is as follows:


	March 31, 2017				December 31, 2016
	Number Outstanding		Weighted Average		Number Outstanding			Weighted Average
			Exercise Price					Exercise Price
Outstanding, beginning of the period		95,982,036		0.15		27,738,344			0.49
Issued		—		—		81,203,692			0.12
Cancelled / Expired		—		—		(12,960,000	)		0.71
Exercised		—		—		—			—
Outstanding, end of the period		95,982,036		0.15		95,982,036			0.15

At March 31, 2017, 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
					(years)
	14,778,344	Jul 20, 2017		0.30		0.27
	46,334,451	Jul 21, 2018¹		0.12		1.27
	1,203,695	Jul 21, 2018		0.075		1.27
	33,665,546	Sep 12, 2018¹		0.12		1.45

	95,982,036					1.07

¹The warrants are subject to an acceleration clause such that if the volume-weighted average trading price of the Company’s common shares on the TSX-V exceeds $0.18 per common share for a period of 10 consecutive trading days at any date before the expiration date of such warrants, the Company may, at its option, accelerate the warrant expiry date to within 30 days. To March 31, 2017, the Company’s common shares have not met the criterion for acceleration.

d) 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.

A summary of option activity under the Plan during the three-month period ended March 31, 2017 is as follows:


	March 31, 2017				December 31, 2016
	Number Outstanding		Weighted Average		Number Outstanding			Weighted Average
			Exercise Price					Exercise Price
Outstanding, beginning of the period		12,823,000		0.30		9,872,500			0.37
Issued		8,137,500		0.05		6,058,000			0.21
Cancelled / Expired		—		—		(3,107,500	)		0.34
Exercised		—		—		—			—
Outstanding, end of the period		20,960,500		0.23		12,823,000			0.30

During the period ended March 31, 2017, the Company granted 8,137,500 incentive stock options to employees, directors and consultants with a maximum term of 5 years. All stock options vest immediately and are excercible at $0.12 per common share. The Company calculates the fair value of all stock options using the Black-Scholes Option Pricing Model. The fair value of this grant amounted to $451 and was recorded as a share-based payments expense.

During the period 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. The granting of these options resulted in a share-based payments expense of $207.

During the year ended December 31, 2016, the Company recorded a further $25 in stock-based compensation for previously issued stock options that vested during the year.

The fair value of stock options granted and vested during the period ended March 31, 2017 and March 31, 2016 was calculated using the following assumptions:


	March 31, 2017			March 31, 2016
Expected dividend yield		0	%		0	%
Expected share price volatility		100.6	%		113	%
Risk free interest rate		1.17	%		0.68	%
Expected life of options	5 years			5 years

Details of options outstanding as at March 31, 2017 are as follows:


Options		Options		Expiry	Exercise		Weighted average
Outstanding		Exercisable		Date	Price		remaining contractual
							life (years)
	1,240,000		1,240,000	Aug 13, 2017		0.24		0.06
	150,000		150,000	Jan 15, 2018		0.15		0.01
	200,000		200,000	Apr 22, 2018		0.15		0.02
	150,000		150,000	Jul 29, 2018		0.20		0.02
	200,000		200,000	Sep 30, 2018		0.37		0.03
	2,440,000		2,440,000	Jul 9, 2019		0.62		0.48
	200,000		200,000	Aug 27, 2019		0.37		0.04
	100,000		100,000	Sep 26, 2019		0.26		0.02
	350,000		350,000	Nov 5, 2019		0.21		0.08
	1,000,000		1,000,000	Dec 19, 2019		0.22		0.23
	900,000		900,000	Feb 3, 2020		0.275		0.22
	450,000		450,000	Oct 5, 2020		0.20		0.13
	5,443,000		5,443,000	Jan 28, 2021		0.21		1.73
	8,137,500		8,137,500	Feb 21, 2022		0.12		4.90

	20,960,500		20,960,500					3.63

e) Reserve

The 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. During the three-month period ended March 31, 2017 the Company recorded $451 of share-based compensation to reserves, (March 31, 2016 — $207).

During the year ended December 31, 2016, 1,275,000 stock options and 12,960,000 warrants expired unexercised. Accordingly, the Company transferred $2,725 from the reserve to deficit.

During the year ended December 31, 2016, the Company initially recorded an amount of $264 to the reserve, which was amortized as interest expense over the term of the Loan and reallocated to share capital upon settlement.

9. RELATED PARTY TRANSACTIONS

The following amounts due to related parties are included in trade payables and accrued liabilities (Note 7):


	March 31,		December 31, 2016
	2017
Directors and officers of the Company		—		2
Total		—		2

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

(a) Related party transactions

During the three months period ended March 31, 2016, the Company recorded $10 in rent and utilities expense to VMS Ventures Inc. a company that was a significant shareholder and related through common directors, which was included in general and administrative expense. There were no such fees recorded during the three-month period ended March 31, 2017.

During the three-month period ended March 31, 2017, the Company recorded $39 (2016 — $4) in fees charged by a legal firm in which the Company’s chairman is a consultant.

(b) Key management personnel are defined as members of the Board of Directors and senior officers.

Key management compensation was:


	March 31, 2017		March 31, 2016
Geological consulting fees – expensed		5		23
Geological consulting fees – capitalized		50		23
Management fees – expensed		178		170
Salaries — expensed		55		22
Share-based payments		331		136

Total		619		374

10. SUPPLEMENTAL CASH FLOW INFORMATION

Changes in working capital for the three months period ended March 31, 2017 and 2016 are as follows:


	March 31, 2017			March 31, 2016
(Increase) decrease in accounts receivables		(16	)		26
Decrease in prepaid expenses		5		—
Decrease in trade payables and accrued liabilities		(21	)		(119	)
Total changes in working capital		(32	)		(93	)

The Company did not incur any non-cash investing or financing transactions during the three-month period March 31, 2017 and March 31, 2016.

11. COMMITMENTS AND CONTINGENCIES

The Company has certain commitments to meet the minimum expenditures requirements on its mineral exploration assets it has interest in.

The Company had no contingent liabilities as at March 31, 2017.

On March 25, 2017, the Company entered into a Drilling Contract (the “Contract”), for services set to commence on or after June 1, 2017. A break fee of $200 is payable by the Company, if the Company elects to terminate the Contract prior to June 1, 2017.

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: $27 per month effective December 2014.

ii) Directors’ fees: $2 stipend per month for independent directors and $3 stipend per month for the chairman of the board.

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.

12. 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 6). The Company’s geographic segments are as follows:


	March 31,		December 31, 2016
	2017
Equipment
Canada		28		39
Greenland		13		16
Total		41		55


	March 31,		December 31, 2016
	2017
Exploration and evaluation assets
Canada		1,752		1,732
Greenland		37,005		36,607
United States		6		3
Total		38,763		38,342

13. SUBSEQUENT EVENTS

a) On April 6, 2017, the Company announced that it has filed a preliminary short form prospectus in connection with a proposed marketed offering of units of the Company for gross proceeds of up to $15,000. The offering will be priced in the context of the market with the specifics of the offering to be determined at the time of pricing.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) of North American Nickel Inc. (“North American Nickel” or the “Company”) provides a discussion and analysis of the financial condition and results of operations to enable a reader to assess material changes in the financial condition of the Company between March 31, 2017 and December 31, 2016, and the results of operations for the three months ended March 31, 2017 (“Q1 2017”) and for the three months ended March 31, 2016 (“Q1 2016”). The MD&A should be read in conjunction with the unaudited condensed interim consolidated financial statements for the three months ended March 31, 2017 and with the audited consolidated financial statements and notes thereto of the Company for the fiscal year ended December 31, 2016 (“FY 2016”). In this MD&A, references to the Company are also references to North American Nickel and its wholly-owned subsidiaries.

The financial statements, and the financial information contained in this MD&A were prepared in accordance with International Financial Reporting Standards (“IFRS”), including International Accounting Standard, Interim Financial Reporting (“IAS 34”).

All amounts in the discussion are expressed in thousands of Canadian dollars (“CDN”) and in thousands of Danish Krones (“DKK”) where applicable, except per share data and unless otherwise indicated. All amounts in tables are expressed in thousands of Canadian dollars, unless otherwise indicated.

This MD&A contains forward-looking information within the meaning of Canadian securities legislation (see “Forward-looking Information” below for full discussion on the nature of forward-looking information). Information regarding the adequacy of cash resources to carry out the Company’s exploration and development programs or the need for future financing is forward-looking information. All forward-looking information, including information not specifically identified herein, is made subject to cautionary language at the end of this document. Readers are advised to refer to the cautionary language included at the end of this MD&A under the heading “Forward-looking Information” when reading any forward-looking information. This MD&A is prepared in accordance with F1-102F1 and has been approved by the Company’s board of directors (the “Board”) prior to release.

This report is dated May 25, 2017. Readers are encouraged to read the Company’s other public filings, which can be viewed on the SEDAR website under the Company’s profile at www.sedar.com. Other pertinent information about the Company can be found on the Company’s website at www.northamericannickel.com.

Company Overview

North American Nickel is an international mineral exploration and resource development company listed on the TSX Venture Exchange (“TSXV”) as at May 3, 2011 trading under the symbol NAN. The Company’s principal asset is its Maniitsoq Property, in southwestern Greenland, a district scale land position. The Company is predominantly focussing its resources on exploration and resource development of its Maniitsoq nickel sulphide project, in addition to its exploration programs on its Sudbury, Ontario nickel properties being Post Creek and Halcyon and Section 35 being a property in the United States.

North American Nickel 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.

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 deep water Seqi Port (the “Port”). A report was prepared summarizing environmental due diligence and preliminary assessment of reindeer by Golder Associates – INUPLAN in and around the Port and upon further review, the decided to not pursue the Seqi Port assignment.

Overall Performance – Highlights of Q1 2017 and as of the Date of this Report

Financing Activities

On April 6, 2017, the Company announced the filing of a preliminary short form prospectus in connection with a proposed marketed offering of units of the Company (the “Units”) for gross proceeds of up to $15,000 (the “Offering”). The Offering will be conducted on a best-efforts basis through Paradigm Capital Inc. (the “Agent”), acting as agent. The Company intends to use the net proceeds of the Offering for the commencement of a work program and additional exploration and drilling activities to be completed at the Company’s Maniitsoq project in Greenland and for general corporate and working capital purposes.

Corporate Activities

On February 22, 2017, the Company granted incentive stock options to certain directors, officers, employees and consultants of the Company to purchase up to 8,137,500 common shares in the capital of the Company pursuant to the Company’s stock option plan. All options are exercisable for a period of five years at an exercise price of $0.12 per share.

On March 1, 2017, the Company appointed Mr. Alexander Dann as Chief Financial Officer of the Company. Mr. Dann has over 20 years’ experience leading financial operations and strategic planning for multinational companies, primarily in the mining sector. Mr. Dann is currently the CFO of Era Resources Inc.

Exploration & Development Activities

On March 15, 2017, the Company announced the positive results of mineralogical studies performed by SGS Canada Inc. (“SGS”) on four drill core samples of nickel-copper sulphides from the 2016 exploration program at the Maniitsoq Ni-Cu-Co-PGE sulphide project in southwest Greenland. The objectives of the study were to determine the modal mineralogy, mineral texture, nickel, copper and cobalt deportment, and the liberation, association and exposure of the nickel, copper and iron sulphides of each sample.

On March 17, 2017, the Company filed a National Instrument 43-101 (“NI-43-101”) updated technical report documenting its recent work on the its wholly-owned Maniitsoq property in southwest Greenland. The report, titled “Updated Independent Technical Report for the Maniitsoq Nickel-Copper-Cobalt-PGM Project, Greenland" was filed on SEDAR under the Company’s issuer profile at www.sedar.com.

On March 29, 2017, the Company announced the grant of a watershed prospecting licence for the assessment and development of potential hydropower resources on its wholly-owned Maniitsoq nickel sulphide project in southwest Greenland. The Company intends to assess the watershed as a potential source of power for its Maniitsoq project consistent with the emphasis by the Greenland Government on securing environmentally friendly energy sources for any industrial development, including mining.

Maniitsoq Nickel-Copper-PGM Project, Southwest Greenland

The Greenland properties currently being explored for nickel-copper-cobalt-PGM sulphide by the Company are exploration properties without mineral resources or reserves. The Maniitsoq project is centered 100 kilometres north of Nuuk, the capital of Greenland which is a safe, stable, mining-friendly jurisdiction. The centre of the project is located at 65 degrees 18 minutes north and 51 degrees 43 minutes west and has an artic climate. It is accessible year-round either by helicopter or by boat from Nuuk or Maniitsoq, the latter located on the coast approximately 15 kilometres to the west. The deepwater coastline adjacent to Maniitsoq is typical of Greenland’s southwest coast which is free of pack ice 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. There is no infrastructure on the property; however, the Seqi deepwater pier and a quantified watershed for hydropower are located peripheral to the project.

The Maniitsoq property consists of two exploration licences, No. 2011/54 and No. 2012/28 comprising 2,689 and 296 square kilometres, respectively. The property is centred on the 75 kilometre by 15 kilometre Greenland Norite Belt which hosts numerous high-grade nickel-copper sulphide occurrences associated with mafic and ultramafic intrusions.

Between 1995 and 2011, various companies carried out exploration over portions of the project area. The most extensive work was carried out by Kryolitselskabet Øresund A/S Company (KØ) who explored the project area from 1959 to 1973. KØ discovered a number of surface and near surface nickel-copper sulphide occurrences and this work was instrumental in proving the nickel prospectivity of the Greenland Norite Belt.

The Company acquired the Maniitsoq project because it believed that modern, time-domain, helicopter-borne electromagnetic (EM) systems would be more effective at detecting nickel sulphide deposits in the rugged terrain of Maniitsoq than previous, older airborne fixed wing geophysical surveys available to previous explorers. In addition, modern, time domain surface and borehole EM systems could be used to target mineralization in the sub-surface.

Effective August 15, 2011, the Company was granted an exploration license, No. 2011/54 (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 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. There will be an annual licence fee on the Sulussugut License for year 6 and forward of approximately DKK 41.

Details of required work expenditures and accrued work credits are tabulated and given below.

Sulussugut License – 2011/54 (All amounts in table are expressed in thousands of DKK)


Exploration Commitment		2011			2012			2013			2014			2015			2016
Fixed amount			146			149			310			313			317			-
4841 km² of DKK 1.460 per km²			7,068
4841 km² of DKK 1.490 per km²						7,213
3336 km² of DKK 7.760 per km²									25,887
2689 km² of DKK 7.830 per km²												21,055			-			-
2689 km² of DKK 7.940 per km²															21,351			-


Exploration obligation			7,214			7,362			26,197			21,368			21,668			-

Total Credits Available

Approved exploration expenditures			8,489			23,616			37,349			55,509			59,150			61,109
Exploration obligation			(7,213	)		(7,362	)		(26,198	)		(21,368	)		(21,668	)		-
Credit from previous year			-			1,276			17,530			28,681			62,822			100,304


Total Credit	DDK		1,276			17,530			28,681			62,822			100,304			161,413


Average Annual Rate DDK to CAD			0.1847			0.1726			0.1834			0.1968			0.1901			0.1969

The accumulated exploration credits held at the end of 2016, DKK 161,413 (approximately $31,382) can be carried forward as follows:


Carry forward period:
a)	DKK 41,154	from 2014 until December 31, 2019
b)	DKK 59,150	from 2015 until December 31, 2020
c)	DKK 61,109	from 2016 until December 31, 2020

On the first 5-year license, the Company completed the exploration requirements of an estimated minimum of DKK 83,809 (approximately $15,808) between the years ended December 31, 2011 to 2015 by incurring $26,116 on the Sulussugut License.

In 2016, there was no exploration commitment. The Company completed approved expenditures for 2016 of DKK 61,109 (approximately $12,032). With a credit from 2014 of DKK 41,154 (approximately $8,099) and a credit from 2015 of DKK 59,150 (approximately $11,250), a commitment of $nil left the Company with excess credits of DKK 161,413 (approximately $31,382).

Ininngui License — 2012/28

Effective March 4, 2012, the Company was granted an additional exploration license, No. 2012/28 (the “Ininngui License”), by the BMP of Greenland for exclusive exploration rights over an area covering a total of 142 square kilometres near Ininngui, Greenland. The Ininngui License is contiguous with the Sulussugut License. The Ininngui License was valid for 5 years until December 31, 2016. The application for another 5-year term on the Ininngui License was submitted to the Greenland Mineral Licence & Safety Authority (MLSA) which was effective March 14, 2017, with December 31, 2017 being the sixth year.

Details of required work expenditures and accrued work credits are tabulated and given below.

Ininngui License — 2012/28 (All amounts in table are expressed in thousands of DKK)


Exploration Commitment		2012			2013			2014			2015			2016
Fixed amount			149			155			313			318			323
142 km² of DKK 1.490 per km²			211
265 km² of DKK 1.550 per km²						411
265 km² of DKK 7.830 per km²									2,075
296 km² of DKK 7.940 per km²												2,350
296 km² of DKK 8.080 per km²															2,392


Exploration obligation			360			566			2,388			2,668			2,715

Total Credits Available

Approved exploration expenditures			2,872			2,966			5,470			6,276			6,790
Exploration obligation			(360	)		(576	)		(2,388	)		(2,668	)		(2,715	)
Credit from previous year			-			2,512			4,902			7,984			11,592


Total Credit	DDK		2,512			4,902			7,984			11,592			15,667


Average Annual Rate DDK to CAD			0.1726			0.1834			0.1968			0.1901			0.1969


Carry forward period:
a)	DKK 2,611	from 2014 until December 31, 2018
b)	DKK 6,276	from 2015 until December 31, 2019
c)	DKK 6,790	from 2016 until December 31, 2020

On the first 5-year license, the Company completed the exploration requirements of an estimated minimum of DKK 8,697 (approximately $1,635) between the years ended December 31, 2012 to 2016 by incurring $2,722 on the Ininngui License.

In 2016 there was an exploration commitment of DKK 2,715 (approximately $535). The Company completed approved expenditures for 2016 of DKK 6,790 (approximately $1,337). With a credit from 2015 of DKK 11,602 (approximately $2,242) and commitment of DKK 2,715 for 2016, it results in excess credits of DKK 15,667 (approximately $3,044).

The required minimum exploration expenditures on the Ininngui License for year 5, ending December 31, 2016 was based on an annual approximation of DKK 2,715 (approximately $535). The Ininngui License area was not reduced in 2016.

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.

For both licenses, at the expiration of the second licence period (years 6-10), the Company may apply for a new 3-year licence for years 11 to 13. Thereafter, the Company may apply for additional 3-year licences for years 14 to 16, 17 to 19 and 20 to 22. 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 according to the licenses will remain in force, regardless of the termination.

Exploration History

Period – 2012-2015

During the period of 2012 to 2015, the Company undertook numerous exploration activities and completed various mineralogical studies. The details of the results and areas explored can be viewed in technical reports and other pertinent information found on the Company’s website at www.northamericannickel.com.

Year ended December 31, 2016

(All drill intercepts described in this section refer to core lengths not true widths)

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

On April 11, 2016, the Company reported the results of QEMSCAN mineralogical analyses from drill core announcing the potential for high nickel recoveries from Maniitsoq mineralization, similar to results from previous studies.

In 2016, the Company completed an exploration program comprising 9,596 metres of drilling in 30 drill holes and two drill hole extensions, borehole electromagnetic surveys, 13 line-kilometres of surface electromagnetic surveying, 53 line-kilometre of surface induced polarization (IP) surveying and ground follow-up of VTEM, geological and remote sensing targets.

On September 20, 2016, the company announced the first assay results from the 2016 drilling program. Three drill holes from the P-053 target intersected nickel-copper sulphide mineralization which extended the area of known mineralization to the east and down plunge and also indicated the potential for a second mineralized zone. Highlights included:


MQ-16-104 MQ-16-106		2.42% nickel, 0.09% copper and 0.12 g/t platinum + palladium + gold over 1.25 metres 0.65% nickel and 0.25% copper over 20.05 metres including 1.17% nickel, 0.33% copper and 0.12 g/t platinum + palladium + gold over 6.55 metres
MQ-16-107		1.10% nickel, 0.19% copper and 0.11 g/t platinum + palladium + gold over 3.45 metres

On October 12, 2016, the Company announced the intersection high grade remobilized massive and breccia sulphide veins in two drill holes at the P-058 target in the Fossilik area which have extended the mineralized zone by 150 metres in a down-dip direction:


MQ-16-105		3.41% nickel, 0.28% copper, 0.10% cobalt and 0.13 g/t Platinum + palladium + gold over 10.2 metres including:
MQ-16-111		4.85% nickel, 0.29% copper, 0.14% cobalt and 0.13 g/t platinum + palladium + gold over 4.1 metres 3.93% nickel, 0.25% copper, 0.10% cobalt and 0.09 g/t platinum + palladium + gold over 3.06 metres

On October 26, 2016, the Company announced the discovery of a new zone of nickel-copper sulphide mineralization at the P-013 SE target. Hole MQ-16-109 intersected high grade remobilized sulphides averaging 2.88% nickel, 0.80% copper, 0.06% cobalt and 0.46 g/t platinum + palladium + gold over 13.35 metres.

On October 31, 2016, the Company announced the discovery of a new zone of norite-hosted nickel and copper mineralization at Mikissoq. The mineralization is located approximately 130 metres below previously intersected shallow mineralization and was intersected over a dip extent of 105 metres in three holes completed on the same section:


MQ-16-113		0.81% nickel and 0.36% copper over 53.25 metres including 2.56% nickel and 0.37% copper over 5.15 metres
MQ-16-117		1.08% nickel and 0.54% copper over 74.05 metres including 1.84% nickel and 0.64% copper over 13.65 metres
MQ-16-118		0.51% nickel and 0.25% copper over 47.0 metres including 1.03% nickel and 0.32% copper over 15.0 metres

On November 16, 2016, the Company announced drilling results from Spotty Hill at the IHC. Hole MQ-16-121 intersected stringer sulphide mineralization averaging 1.59% Ni, 0.30% Cu and 0.66 g/t Pt+Pd+Au over 4.75 metres. This intersection is located approximately 115 metres down plunge of existing mineralization and represents an expansion of the Spotty Hill mineralized system. Borehole electromagnetic (BHEM) surveys also identified new moderate to high conductance off-hole anomalies which are untested. A gradient array Induced Polarization (IP) survey defined a northwest trend of elevated chargeability over 1.8 kilometres, extending from G-004 through Spotty Hill to Mikissoq. These results, coupled with the new discovery at Mikissoq, indicate the strong exploration potential for this trend of norite-pyroxenite stratigraphy within the IHC area.

In December 2016, the Company announced results of drilling, IP surveying and surface sampling in the P-030-032 and Fossilik areas. Highlights included:

P-030-032:

Gradient IP chargeability anomalies coincident with two-kilometre-long P-030-032 norite intrusion

Surface grab sample at P-094 target containing 2.26% nickel, 0.67% copper and 0.33 g/t platinum + palladium + gold

New drill intersection discovery of norite hosted nickel-copper sulphides at P-094 where hole MQ-16-124 returned 0.54% nickel and 0.16% copper over 8.0 metres

Fossilik Area:

Intersection of high grade stringer and vein sulphides including 3.05% nickel and 0.22% copper over 0.5 metres in hole MQ-16-131 confirms continuity of P-058 mineralization from near surface to a vertical depth of 350 metres

Gradient IP chargeability anomalies coincident with Fossilik intrusion

Surface grab samples returning values of up to 2.36% nickel, 0.41% copper and 0.71 g/t platinum + palladium

In late 2016, the Company signed an agreement for QEMSCAN Mineralogy on four samples from Maniitsoq.

Exploration and Development Activities during Q1 2017

On March 15, 2017, the Company announced the results of mineralogical studies performed by SGS Canada Inc. (“SGS”) on four drill core samples of nickel-copper sulphides from the 2016 exploration program at the Maniitsoq Ni-Cu-Co-PGE sulphide project in southwest Greenland. The representative samples were obtained from the Mikissoq and P-058 mineralized norite intrusions at the Imiak Hill Complex and Fossilik area, respectively. The objectives of the study were to determine the modal mineralogy, mineral texture, nickel, copper and cobalt deportment, and the liberation, association and exposure of the nickel, copper and iron sulphides of each sample.

Highlights from the report include:

Nickel:

• 93.5 to 95.9% of the total nickel in each sample is contained within pentlandite. Potential pentlandite recoveries range from 94.9 to 96.8% based on liberation, association and exposure characteristics of crushed samples stage pulverized to 90% passing 150 micrometres;


o • Copper		2.3 to 4.4% of the total nickel in each sample is contained within pyrrhotite; and Pentlandite D₅₀(µm) grain sizes range from 42 to 46 micrometres.

• All copper is hosted by chalcopyrite. Potential chalcopyrite recoveries for the Mikissoq samples range from 90.6 to 94.3% based on liberation, association and exposure characteristics of crushed samples stage pulverized to 90% passing 150 micrometres. Potential chalcopyrite recovery for the P-058 sample is 75.2%; and

• Chalcopyrite P₅₀ (µm) grain sizes range from 26 to 34 micrometres. Cobalt:

• Pentlandite and pyrite are the main hosts of the cobalt in the samples.

Sulphide mineral species identified in each sample are pyrrhotite, pentlandite, pyrite and chalcopyrite.

Orthopyroxene, amphibole, feldspar and clinopyroxene are the major silicates. Talc was identified by QEMSCAN in all samples and confirmed by XRD in two out of the four samples. Talc abundances (in crushed samples) were 0.88% for the P-058 sample and 4.1 to 10.1% for the Mikissoq samples.

On March 29, 2017, the Company announced the granting of a watershed prospecting licence for the assessment and development of potential hydropower resources on its 100%-owned Maniitsoq nickel sulphide project in southwest Greenland. The Company intends to assess the watershed as a potential source of power for its Manitsoq project consistent with the emphasis by the Greenland Government on securing environmentally friendly energy sources for any industrial development, including mining.

The watershed of interest overlaps with the eastern flank of the Maniitsoq project area and is characterized by several sites with potential for hydropower development. The Company is currently reviewing the capacity of Greenlandic and other corporations to assist with the watershed prospecting activities planned to begin in June of 2017.

The licence was awarded by the Ministry of Industry, Labour, Trade and Energy of the Greenland Government, is renewable for a further three years and can be upgraded to an exploitation licence.

Outlook – Exploration and Development for 2017

The success of the 2016 drilling program has expanded several key areas of nickel-copper sulphide mineralization including Mikissoq and Spotty Hill at the Imiak Hill Complex and P-058 in the Fossilik area. The Company plans to focus on further step-out drilling and expansion of these areas in 2017.

During 2017, the Company will continue its development of the following infrastructure:

Hydroelectric Power Development - North American Nickel’s application to the MLSA for a prospecting licence for a watershed adjacent to the Maniitsoq project was submitted to the Greenland government on September 16, 2016. The application requested approval for the Company to begin the collation of available hydrologic, cultural, social and environmental data to assist in the design of future data gathering on the ground. In the absence of an approval from the MLSA a second application was submitted October 25, 2016 requesting a temporary or limited approval that would permit data collection to commence. The Ministry of Industry, Labour, Trade and Energy (MILT) responded with an application which was completed and returned to MILT on February 2, 2017. On March 29, 2017, the Company was granted a watershed prospecting licence.

Tailings Facility - Discussions were held with the MLSA and the Greenland Department of Nature, Environment and Energy regarding the process for selecting and developing a tailings facility to support nickel mining and milling activities. This process is required to be undertaken as part of the submission of an exploitation licence for extraction of nickel ore. The location of the tailings facility and the process to assess a suitable site for tailings disposal/storage must be undertaken subsequent to the delineation of a mineable nickel deposit thereby avoiding long distance transport of tailings. The development of a tailings facility is considered as a component of an Environmental Impact Assessment. The process includes the determination of the scope of disposal (underground or surface), the selection of several potential tailings sites and the review of these sites for their suitability in terms of environmental impact. Review is done by external advisors to the Greenland government and may include environmental consultants or experts from Aarhuis University (Denmark). Subsequent to public consultation a white paper is produced which will identify any issues that need addressing by the Company. Following this is an abandonment plan to produce the best possible environmental solution.

Corporate Social Responsibility for Greenland

The Company has completed presentations to the communities bordering the Maniitsoq project, including Nuuk, Napasoq, Maniitsoq and Sisimiut. Regional associations (Arctic Business Councils, Fishers and Hunters association and the Greenland Employers Association) and community meetings have been updated with regards to the Company’s exploration progress and upcoming plans.

A compilation of expenditures and suppliers of goods and services made by the Company in Greenland since 2012 has been prepared by Xploration Services in preparation for presentation to members of the Town Council of Maniitsoq and Sisimiut. These councils requested the database and a summary of the Company’s hiring practices of Greenlanders since 2011. The hiring records have been compiled and forwarded to the town councils. The expenditures compilation for the goods and services sector will demonstrate the details of the Company’s expenditures in the goods and services sector and underscore the fact that 60% of all funds raised for the project are spent on Greenlandic companies.

Canada Nickel Projects — Sudbury, Ontario

Post Creek Property

On December 23, 2009, the Company executed a letter of intent whereby the Company had an option to acquire the mineral claim known as the Post Creek Property located within the Sudbury Mining District of Ontario. 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 was met, cash payments totalling $138 and the issuance of 1,000,000 common shares. The Company exercised its option on Post Creek and as of August 1, 2015, the Company is obligated to pay advances on the NSR of $10 per annum, which will be deducted from any payments to be made under the NSR.

The property is located 35 kilometres east of Sudbury in Norman, Parkin, Alymer and Rathburn townships and consists of 39 unpatented mining claims in two separate blocks, covering a total area of 912 hectares held by the Company. The center of the property occurs at UTM coordinates 513000mE, 5184500mN (WGS84, UTM Zone 17N). The Post Creek property lies adjacent to the Whistle Offset Dyke Structure which hosts the past–producing Whistle Offset and Podolsky Cu-Ni-PGM mines. Post Creek lies along an interpreted northeast extension of the Whistle Offset Dyke trend. Offset Dykes and Footwall deposits account for a significant portion of all ore mined in the Sudbury nickel district and, as such, represent favourable exploration targets. Key lithologies are Quartz Diorite related to Offset Dykes and Sudbury Breccia associated with Footwall deposits.

Exploration History — 2011 to 2016
(All drill intercepts described in this section refer to core lengths not true widths)

Previous operators completed geological, geophysical and Mobile Metal Ion soil geochemical surveys. Highlights of this work included:

A drill intersection returning 0.48% copper, 0.08% nickel, 0.054 grams/tonne palladium, 0.034 grams/tonne platinum and 0.020 grams/tonne gold over a core length of 0.66 metres; and

A grab sample from broken outcrop which returned 0.83% nickel, 0.74% copper, 0.07% cobalt, 2.24 grams/tonne Pt and 1.05 grams/tonne Pd.

A NI 43-101 compliant Technical Report was completed by Dr. Walter Peredery, formerly of INCO, in 2011 and subsequently accepted by the Securities Commission.

The Company carried out exploration programs comprising ground geophysics (magnetics and electromagnetics), diamond drilling (1,533 metres in 7 drillholes), borehole electromagnetic surveys, georeferencing of selected claim posts, prospecting, trenching, geological mapping, sampling and petrographic studies. This work has identified new occurrences of Quartz Diorite dyke and Sudbury Breccia, both of which are geologically significant lithologies known to host ore deposits associated with the Sudbury structure. Ground traverses, trenching and mapping carried out in 2016 outlined a Sudbury Breccia belt of at least 300 metres by 300 metres in size which lies along the same trend at the Whistle Offset Dyke located on KGHM property to the southwest. These findings support the potential for the Post Creek property to host both Footwall and Offset Dyke type deposits.

Year ended December 31, 2016

Work completed on the property during 2016 consisted of geological traverses, prospecting, sampling and trenching carried out in May and June. Selected assay, whole rock and thin section samples were collected for analysis and study. Results have been received and are being compiled.

A final report on an NSERC project completed on the Post Creek Property was received in March 2016 and confirmed the identification of Quartz Diorite (“Post Creek Quartz Diorite” or “CJ Quartz Diorite”) in surface trenches. The authors were unable to verify if the exposed Quartz Diorite represented an extension of the Whistle Offset Dyke or a separate new Offset Dyke, but favored the latter. Regardless, the confirmation of Quartz Diorite has significant implications for the exploration potential of the property.

In October 2016, three trenches exposed earlier in 2016 were mapped in detail and identified abundant Sudbury Breccia, locally containing disseminated sulphides. The Sudbury Breccia exposed in the trenches and nearby outcrops are interpreted to be part of a larger Sudbury Breccia belt which is at least 300 metres by 300 metres in size. The breccia belt lies approximately along the projected trend of the Whistle Offset Dyke located on KGHM property to the southwest.

In November 2016, a georeferencing program was completed involving the acquisition of DGPS coordinates for claim posts for selected claims. This work will potentially qualify for assessment work credits.

Outlook – Exploration and Development for 2017

The Company plans to file assessment work carried out in 2016. The Company also plans to review and synthesize all newly obtained data to formulate a work plan aimed at defining the overall extents footwall breccia zones and quartz diorite dykes and identifying geological and/or geophysical drill targets.

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 interest in the property, subject to certain net smelter return royalties (“NSR”) and advance royalty payments the Company agreed to the following amended consideration, which was met, cash payments totalling $120 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 per annum, which will be deducted from any payments to be made under the NSR.

The property is located 35 Km northeast of Sudbury in the Parkin and Aylmer townships, 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 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.

Exploration History 2011 to 2016

During the period 2011 to 2016, the Company carried out a small amount of exploration including ground geophysics (magnetics and electromagnetics), diamond drilling (301 metres in 1 drillhole), a borehole electromagnetic survey, georeferencing of selected claim posts, prospecting, geological mapping, sampling and petrographic studies. The single hole located on the southeast corner of the property was drilled with the purpose of providing geological information and to provide a platform for borehole 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. The property is strategically located adjacent to the Company’s Post Creek property, located immediately to the south, where new occurrences of both Quartz Diorite and Sudbury Breccia have been identified.

Year ended December 31, 2016

Work completed on the property during the year ending December 31, 2016 consisted of geological traverses, prospecting and sampling and was carried out on the southern portion of the Halcyon Property. This program was carried out concurrently with similar work on the Post Creek Property. Selected assay, whole rock and thin section samples were collected for analysis and study. Results have been received and are being compiled.

Outlook – Exploration and Development for 2017

Further work of the Halcyon Property will be rationalized with work programs on the adjacent Post Creek Property.

US Nickel Project — Michigan

Section 35 Property

On January 4, 2016, the Company entered into a 10 year Metallic Minerals Lease (the “Lease”) with the Michigan Department of Natural Resources for an area covering approximately 320 acres. The terms of the Lease require an annual rental fee at a rate of US $3.00 per acre for years 1-5 and at a rate of US $6.00 per acre for years 6-10. The Company shall pay a minimum royalty at a rate of US $10.00 per acre for the 11^th year onwards, with an increase of an additional US $5.00 per acre per year up to a maximum of US $55.00 per acre per year. A production royalty of between 2% — 2.5% is payable from production of minerals and/or mineral products from an established mining operation area. To date, the Company paid the rental fees for two years (2016 and 2017), plus the required reclamation deposit of US $10,000. The Department of Natural Resources shall annually review the level of the reclamation deposit and shall require the amount to be increased or decreased to reflect changes in the cost of future reclamation of the leased premises.

There was no exploration work performed during the period ended March 31, 2017.

Outlook – Exploration & Development for 2017

A surface time-domain Electromagnetic survey planned has been deferred until 2017 and will be contingent on the submission and approval of work permits.

Financial Capability

The Company is an exploration and development stage entity and has not yet achieved profitable operations. The business of the Company entails significant risks. 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.

At the end of Q1 2017, the Company had working capital of $2,380 (March 31, 2016 — $2,004) and reported accumulated deficit of $24,926 (December 31, 2016 — $23,972). The Company will require additional funds in order to continue its planned operations and meet its obligations.

As at March 31, 2017, the Company had $2,388 in available cash, cash equivalents and short term investments (December 31, 2016— $3,330). There are no sources of operating cash flows. Given the Company’s current financial position and the ongoing exploration and evaluation expenditures, the Company will need to raise additional capital through the issuance of equity or other available financing alternatives to continue funding its operating, exploration and evaluation activities, and eventual development of the mineral properties. Although the Company has been successful in its past fund-raising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.

Selected Financial Information

The amounts are derived from the condensed interim consolidated financial statements prepared under IFRS.

Three months
ended March 31,


In thousands of CDN dollars, except per share amounts		2017		2016
Net loss	954		689
Basic and diluted loss per share	0.01		0.00
Share capital	62,906		51,165
Common shares issued	368,581,886		207,629,506
Weighted average shares outstanding	269,778,932		207,629,506
Total assets	41,358		32,129
Investment in exploration and evaluation assets	421		215

Results of Operations

Net loss in Q1 2017 totalled $954 and was $265 higher compared to a loss in Q1 2016 of $689. The key item contributing to a higher loss in Q1 2017 was share-based payments expense of $451 in Q1 2017 compared to $207 in Q1 2016 resulting in an increase to the loss of $244. The higher share-based payments expense in Q1 2017 resulted from issuance of 8,137,500 share options in February 2017 and the resultant fair value of the options. The loss in Q1 2017 was further increased by $21 resulting from the higher administrative costs, mainly the investor relations expenditures.

Total Assets

Total assets during the Q1 2017 decreased by a net of $524 from the end of FY 2016. The decrease is attributed to a decrease in cash and cash equivalents and short term investments of $942 offset by an increase to exploration and evaluation assets of $421.

Investment in Exploration and Evaluation Assets

Investment in exploration and evaluation assets relates primarily to the Greenland property. During the period of Q1 2017, the Company spent a total of $421 in additions to exploration and evaluation assets, of which $398 related to Greenland and $23 to other properties located in Canada and in USA.

Quarterly Results of Operations


In thousands of CDN dollars,			2017			2016		2016	2016
except per share amounts	1^st quarter			4^th quarter			3^rd quarter		2^nd quarter

Statement of Loss
Interest income		5			7			10		6
Net loss		954			630			701		857
Net loss per share — basic and diluted		0.01			0.00			0.00		0.00


Statement of Financial Position
Cash, cash equivalents and short term		2,388			3,330			5,642		3,955
investments
Total assets		41,358			41,882			43,031		36,548
Net assets		41,198			41,700			42,406		31,395
Share capital		62,906			62,906			62,802		51,260
Common shares issued		368,581,886			368,581,886			368,581,886		208,581,886
Weighted average shares outstanding		269,778,932			236,778,932			236,604,218		207,959,176


In thousands of CDN dollars,			2016			2015		2015	2015
except per share amounts	1^st quarter			4^th quarter			3^rd quarter		2^nd quarter

Statement of Loss
Interest income		5			5			5		12
Net loss		689			539			656		485
Net loss per share — basic and diluted		0.00			0.00			0.00		0.00

Statement of Financial Position
Cash, cash equivalents and short term		2,052			2,825			4,831		5,037
investments
Total assets		32,129			32,729			33,472		27,868
Net assets		31,998			32,480			33,121		27,358
Share capital		51,165			51,165			51,224		44,808
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

Three Months Ended March 31, 2017, and March 31, 2016

A net loss of $954 in Q1 2017 compared to a net loss of $689 in Q1 2016 resulted in an increased loss of $265 quarter-over-quarter and was due to the following events with share-based compensation being the most significant:

Share-based compensation amounted to $451 in Q1 2017 compared to $207 in Q1 2016 resulting in an increase of $244. During Q1 2017, the Company issued 8,137,500 share options, which were valued using the Black Scholes Option Pricing model. The fair value of options is greatly impacted by the assumptions used to fair value the options such as share price volatility, exercise price, life of the options, vesting conditions and share price of the Company at the time of grant. In addition, the number of options granted in Q1 2016 was lower compared to options issued in Q1 2017.

The loss in Q1 2017 was further increased by $21, resulting from higher general and administrative expenses in Q1 2017 compared to Q1 2016.

Liquidity, Capital Resources and Going Concern

Liquidity
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.

The Company’s principal requirements for cash over the next twelve months will be to fund the ongoing exploration costs at its mineral properties, general corporate and administrative costs and to service the Company’s current trade and other payables.

On April 6, 2017, the Company announced that it had filed a preliminary short form prospectus in connection with a proposed marketed offering of units of the Company for gross proceeds of up to $15,000. This financing transaction will improve the liquidity and will increase the capital resources of the Company.

Working Capital
As at March 31, 2017, The Company had working capital of $2,380 (December 31, 2016 — $3,290), calculated as a total current assets less total current liabilities. The decrease in working capital is mainly due to the usage of cash fund exploration expenditures and general corporate expenses.

Going Concern
As at March 31, 2017 the Company had accumulated losses totaling $24,926. 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.

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 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.

Contractual Obligations and Contingencies

Post Creek

Commencing August 1, 2015, the Company is obligated to pay advances on the NSR of $10 per annum. In Q1 2017, the Company paid $5 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 per annum. In Q1 2017, the Company paid $4 which will be deducted from any payments to be made under the NSR.

The Company had no contingent liabilities as at March 31, 2017.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements as at March 31, 2017.

Transactions with Related Parties

The Company’s related parties as defined by International Accounting Standard 24 “Related Party Disclosures” (IAS 24), include the Company’s subsidiaries, executive and non-executive directors, senior officers and key management personnel. Transactions with related parties are measured at fair value, which is the amount of consideration established and agreed upon by the related parties. All related party transactions entered into by the Company have been approved by the Board of Directors of the Company and/or shareholders of the Company as required.

Key management personnel are defined as directors and senior officers of the Company.

Transactions with related parties during Q1 2017 and Q1 2016 are listed below:

(a) Transactions with Related Parties:

During the three-month period ended March 31, 2017, the Company recorded $39 (2016 — $4) in fees charged by a legal firm in which the Company’s chairman is a consultant.

During the three-month period ended March 31, 2016, the Company recorded $10 in rent and utilities expense to VMS Ventures Inc., a company that was a significant shareholder and related through common directors. There were no such fees recorded during the three-month period ended March 31, 2017.

(b) Compensation of Key Management Personnel


	Three Months Ended March 31,
In thousands of CDN dollars	2017		2016
Geological consulting fees — expensed		5		23
Geological consulting fees – capitalized		50		23
Management fees – expensed		178		170
Salaries – expensed		55		22
Stock based compensation		331		136

		619		374

Financial Instruments



In thousands of CDN dollars	Fair Value at March 31, 2017		Basis of Measurement	Associated Risks

Cash and cash equivalents		688	Loans and receivables	Credit and foreign exchange
Short term investments		1,700	Loans and receivables	Credit
Receivable and other current assets		152	Loans and receivables	Credit, foreign exchange

Trade, payables and accrued liabilities		160	Amortized cost	Foreign exchange

Loans and receivables— Cash and cash equivalents, short-term deposits, accounts receivables and other current assets, trade, other payables and accrued liabilities mature in the short term and their carrying values approximate their fair values.

Future Accounting Standards and Pronouncements

IFRS 9 “Financial Instruments” (IFRS 9)

IFRS 15 “Revenue from Contracts with Customers”

IFRS 16 “Leases”

Risk and Uncertainties

The business of the Company entails significant risks that may have a material and adverse impact on the future operations and financial performance of the Company and the value of the common shares of the Company. These risks that are widespread risks associated with any form of business and specific risks associated with involvement in the exploration and mining industry. Hence, 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 and uncertainties

The Company has negative operating cash flows and might not be able to continue as a going concern;

The Company will require additional funding in the future and no assurances can be given that such funding will be available on the terms acceptable to the Company or at all;

The speculative nature of resource exploration and development projects;

The uncertainty of mineral resource estimates and the Company’s lack of mineral reserves;

The Company’s ability to successfully establish mining operations and profitable production;

Operations of the Company are carried out in geographical areas that are subject to various other risk factors;

The economic uncertainty of operating in a developing country such as PNG, such as the availability of local labour, local and outside contractors and equipment when required to carry out the Company’s exploration and development activities;

Other foreign operations risks; potential changes in applicable laws and government or investment policies;

The Company is not insured against all possible risks;

Environmental risks and hazards;

The title of the Company’s mineral properties cannot be guaranteed and may be subject to prior unregistered agreements, transfers and other defects, and the risk of obtaining a mining permit and the successful renewal of currently pending renewal applications;

The commodity prices may affect the Company’s value, changes in and volatility of commodity prices and its hedging policies;

Increased competition in the mineral resource sector;

The Company may have difficulty recruiting and retaining key personnel;

Currency fluctuations risk;

Repatriation of earnings, no assurances that Greenland or any other foreign country that the Company may operate in the future will not impose restrictions on repatriation of earnings to foreign entities;

No production revenues;

Stock exchange prices;

Conflicts of interest;

Ability to exercise statutory rights and remedies under Canadian securities law;

Enforceability of foreign judgements;

Unforeseen litigation;

The Company’s future sales or issuance of common shares;

Risk of suspension of public listing due to failure to comply with local securities regulations;

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;

Risk of fines and penalties; and

Risk of improper use of funds in local entity.

Share Capital Information

As of the date of this MD&A the following number of common shares of the Company and other securities of the Company exercisable for common shares of the Company are outstanding:


Securities	Common shares on exercise
Common shares		368,581,886
Preferred shares		590,931
Stock options		20,960,500
Warrants		95,982,036

Fully diluted share capital		486,115,353

Disclosure Controls and Procedures

Management has established processes to provide them sufficient knowledge to support representations that they have exercised reasonable diligence that (i) the consolidated financial statements do not contain any untrue statement of 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 is made, as of the date of and for the periods presented by the consolidated financial statements; and (ii) the consolidated financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented.

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 accounting policies.

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.

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.

Additional Information

Additional information about the Company and its business activities is available under the Company’s profile on the Canadian SEDAR website at www.sedar.com.

Qualified Person and Technical Information

The scientific and technical information contained in this MD&A was prepared by or under the supervision of and reviewed and approved by Patricia Tirschmann, P. Geo, the qualified person for the Company under National Instrument 43-101. Ms. Tirschmann is a “Qualified Person” as defined by NI 43-101. Ms. Tirschmann verified the data underlying the information in this MD&A.

For further information relating to the Maniitsoq Project in southwest Greenland, please see the technical report titled Updated Independent Technical Report for the Maniitsoq Nickel-Copper-Cobalt-PGM Project, Greenland" dated February 1, 2017 prepared by SRK Consulting (US) Inc. which is available under the Company’s issuer profile on SEDAR at www.sedar.com.

Form 52-109FV2
Certification of Interim Filings
Venture Issuer Basic Certificate

I, Keith Morrison, President and Chief Executive Officer 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, 2017.

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 25, 2017

(signed) Keith Morrison
Keith Morrison
Chief Executive Officer

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.

Form 52-109FV2
Certification of Interim Filings
Venture Issuer Basic Certificate

I, Alexander Dann, Chief Financial Officer of North American Nickel Inc., certify the following:

Date: May 25, 2017

(signed) Alexander Dann
Alexander Dann
Chief Financial Officer

NOTE TO READER

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.

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Suite 2200, 1055 West Hastings Street
Vancouver, BC, V6E 2E9
Phone: (604) 770-4334

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

TAKE NOTICE that the annual and special meeting (the "Meeting”) of shareholders (“Shareholders”) of North American Nickel Inc. (hereinafter called the “Company”) will be held at the offices of Bennett Jones LLP, 100 King Street West, Suite 3400, Toronto, Ontario, M5X 1A4, Canada, on Wednesday, June 29, 2017 at 10:00 a.m. (Toronto time) for the following purposes:

1. to receive the report of the directors;

2. to receive the financial statements of the Company for its fiscal year ended December 31, 2016 and the report of the auditors thereon;

3. to determine the number of directors and to elect directors;

4. to appoint auditors for the ensuing year and to authorize the directors to fix their remuneration;

5. to consider and, if thought fit, to approve the Company’s stock option plan, which makes a total of 10% of the issued and outstanding shares of the Company available for issuance thereunder, as described in the accompanying management information circular; and

6. to transact such other business as may properly come before the Meeting.

Accompanying this notice is a management information circular and form of proxy. A Shareholder entitled to attend and vote at the Meeting is entitled to appoint a proxy holder to attend and vote in his or her stead. If you are unable to attend the Meeting, or any adjournment thereof in person, please read the notes accompanying the form of proxy enclosed and then complete and return the form of proxy within the time set out in the notes. The enclosed form of proxy is solicited by management of the Company but, as set out in the notes, you may amend it if you so desire by striking out the names listed therein and inserting in the space provided the name of the person you wish to represent you at the Meeting.

DATED at Vancouver, British Columbia as of the 25^th day of May, 2017.

BY ORDER OF THE BOARD OF DIRECTORS

“Keith Morrison”
Chief Executive Officer
North American Nickel Inc.

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Suite 2200, 1055 West Hastings Street
Vancouver, BC, V6E 2E9
Phone: (604) 770-4334

INFORMATION CIRCULAR

SOLICITATION OF PROXIES BY MANAGEMENT

This management information circular (this “Circular”) is furnished in connection with the solicitation of proxies by or on behalf of the management of North American Nickel Inc. (the “Company”) for use at the annual general meeting (the “Meeting”) of the shareholders of the Company (“Shareholders”) to be held at 100 King Street West, Suite 3400, Toronto, Ontario, M5X 1A4, Canada, on: Wednesday, June 29, 2017 at 10:00 a.m. (Toronto time) and at any adjournments thereof for the purposes set out in the accompanying Notice of Meeting. Although it is expected that the solicitation of the proxies will be primarily by mail, proxies may also be solicited personally or by telephone by directors or officers of the Company. Arrangements will also be made with clearing agencies, brokerage houses and other financial intermediaries to forward proxy solicitation material to the beneficial owners of common shares of the Company (the “Common Shares”) pursuant to the requirements of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”). The cost of any such solicitation will be borne by the Company.

Unless otherwise stated, the information contained in this Circular is given as at May 25^th, 2017. Unless otherwise indicated, all references in this Circular to “$” refer to Canadian dollars.

APPOINTMENT OF PROXY HOLDERS
AND COMPLETION AND REVOCATION OF PROXIES

The purpose of a proxy is to designate persons who will vote the proxy on a Shareholder’s behalf in accordance with the instructions given by the Shareholder in the proxy. The persons (the "Management Designees”) named in the enclosed form of proxy (the “Proxy”) have been selected by the directors of the Company.

A Shareholder has the right to designate a person (who need not be a Shareholder), other than the Management Designees to represent the Shareholder at the Meeting. Such right may be exercised by inserting in the space provided for that purpose on the proxy the name of the person to be designated, and by deleting from the proxy the names of the Management Designees, or by completing another proper form of proxy and delivering the same to the transfer agent of the Company. Such Shareholder should notify the nominee of the appointment, obtain the nominee’s consent to act as proxy holder and attend the Meeting, and provide instructions on how the Shareholder’s shares are to be voted. The nominee should bring personal identification with them to the Meeting.

To be valid, the proxy must be dated and executed by the Shareholder or an attorney authorized in writing, with proof of such authorization attached (where an attorney executed the proxy). The proxy must then be delivered to the Company’s registrar and transfer agent, Computershare Investor Services Inc., Proxy Department, 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1, or by fax within North America to 1-866-249-7775, and outside North America to (416) 263-9524, at least 48 hours, excluding Saturdays, Sundays and holidays, before the time of the Meeting or any adjournment thereof. Proxies received after that time may be accepted by the Chairman of the Meeting at the Chairman’s discretion, but the Chairman is under no obligation to accept late proxies.

Any registered Shareholder who has returned a proxy may revoke it at any time before it has been exercised. A proxy may be revoked by a registered Shareholder personally attending at the Meeting and voting their shares. A Shareholder may also revoke their proxy in respect of any matter upon which a vote has not already been cast by depositing an instrument in writing, including a proxy bearing a later date executed by the registered Shareholder or by their authorized attorney in writing, or, if the Shareholder is a corporation, under its corporate seal by an officer or attorney thereof duly authorized, either at the office of the Company’s registrar and transfer agent at the foregoing address or the head office of the Company at Suite 2200, 1055 West Hastings Street, Vancouver, BC, V6E 2E9, Phone: (604) 770-4334, at any time up to and including the last business day preceding the date of the Meeting, or any adjournment thereof at which the proxy is to be used, or by depositing the instrument in writing with the Chairman of such Meeting, or any adjournment thereof. Only registered Shareholders have the right to revoke a proxy. Non-registered Shareholders who wish to change their vote must, at least seven days before the Meeting, arrange for their respective nominees to revoke the proxy on their behalf.

VOTING OF PROXIES

Voting at the Meeting will be by a show of hands, each registered Shareholder and each proxy holder (representing a registered or unregistered Shareholder) having one vote, unless a poll is required or requested, whereupon each such Shareholder and proxy holder is entitled to one vote for each Common Share held or represented, respectively. Each Shareholder may instruct their proxy holder how to vote their Common Shares by completing the blanks on the proxy. All Common Shares represented at the Meeting by properly executed proxies will be voted or withheld from voting when a poll is required or requested and, where a choice with respect to any matter to be acted upon has been specified in the form of proxy, the Common Shares represented by the proxy will be voted in accordance with such specification. In the absence of any such specification as to voting on the proxy, the Management Designees, if named as proxy holder, will vote in favour of the matters set out therein.

The enclosed proxy confers discretionary authority upon the Management Designees, or other person named as proxy holder, with respect to amendments to or variations of matters identified in the Notice of Meeting and any other matters which may properly come before the Meeting. As of the date hereof, the Company is not aware of any amendments to, variations of or other matters which may come before the Meeting. If other matters properly come before the Meeting, then the Management Designees intend to vote in a manner which in their judgment is in the best interests of the Company.

In order to approve a motion proposed at the Meeting, a majority of greater than 50% of the votes cast will be required (an “ordinary resolution”), unless the motion requires a “special resolution” in which case a majority of 66 2/3% of the votes cast will be required.

BENEFICIAL HOLDERS

Only registered shareholders or duly appointed proxy holders are permitted to vote at the Meeting. Most shareholders of the Company are “non-registered” or “beneficial” shareholders because the shares they own are not registered in their names, but are instead registered in the name of the brokerage firm, bank or trust company through which they purchased the shares. More particularly, a person is not a registered shareholder in respect of shares which are held on behalf of that person (the “Beneficial Holder”) but which are registered either: (a) in the name of an intermediary that the Beneficial Holder deals with in respect of the shares (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSP’s, RRIF’s, RESP’s and similar plans (an “Intermediary”)); or (b) in the name of a clearing agency (such as The Canadian Depository for Securities Limited (“CDS”)) of which the Intermediary is a participant. In accordance with the requirements of NI 54-101, the Company has distributed copies of the Notice of Meeting, this Circular and the Proxy (collectively, the "Meeting Materials”) to the clearing agencies and Intermediaries for onward distribution to Beneficial Holders.

Intermediaries are required to forward the Meeting Materials to Beneficial Holders unless a Beneficial Holder has waived the right to receive them. Typically, Intermediaries will use service companies to forward the Meeting Materials to Beneficial Holders. Generally, Beneficial Holders who have not waived the right to receive Meeting Materials will either:

1. be given a form of proxy which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted as to the number of shares beneficially owned by the Beneficial Holder but which is otherwise not completed. Because the Intermediary has already signed the form of proxy, this form of proxy is not required to be signed by the Beneficial Holder when submitting the proxy. In this case, the Beneficial Holder who wishes to submit a proxy should otherwise properly complete the form of proxy and deposit it with the Company’s transfer agent as provided above; or

2. more typically, be given a voting instruction form which is not signed by the Intermediary, and which, when properly completed and signed by the Beneficial Holder and returned to the Intermediary or its service company, will constitute voting instructions (often called a “proxy authorization form”) which the Intermediary must follow. Typically, the proxy authorization form will consist of a one page pre-printed form. Sometimes, instead of the one page pre-printed form, the proxy authorization form will consist of a regular printed proxy form accompanied by a page of instructions which contains a removable label containing a bar-code and other information. In order for the form of proxy to validly constitute a proxy authorization form, the Beneficial Holder must remove the label from the instructions and affix it to the form of proxy, properly complete and sign the form of proxy and return it to the Intermediary or its service company in accordance with the instructions of the Intermediary or its service company.

In either case, the purpose of this procedure is to permit Beneficial Holders to direct the voting of the shares which they beneficially own. Should a Beneficial Holder who receives one of the above forms wish to vote at the Meeting in person, the Beneficial Holder should strike out the names of the Management Designees named in the form and insert the Beneficial Holder’s name in the blank space provided. In either case, Beneficial Holders should carefully follow the instructions of their Intermediary, including those regarding when and where the proxy or proxy authorization form is to be delivered.

INTEREST OF CERTAIN PERSONS OR COMPANIES
IN MATTERS TO BE ACTED UPON

Other than as set forth herein, management of the Company is not aware of any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting, other than the election of directors, the appointment of auditors, and the approval of the related party transaction, of any person or company who has been: (a) if the solicitation is made by or on behalf of management of the Company, a director or executive officer of the Company at any time since the beginning of the Company’s last financial year; (b) if the solicitation is made other than by or on behalf of management of the Company, any person or company by whom or on whose behalf, directly or indirectly, the solicitation is made; (c) each proposed nominee for election as a director of the Company; or (d) any associate or affiliate of any of the foregoing persons or companies.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The Company is authorized to issue unlimited Common Shares, without nominal or par value, of which as at the date hereof 368,581,886 Common Shares are issued and outstanding.

The holders of Common Shares of record at the close of business on the record date, set by the directors of the Company to be May 25, 2017, are entitled to vote such Common Shares at the Meeting on the basis of one vote for each Common Shares held.

The articles of the Company provide that a quorum for the transaction of business at the Meeting is two Shareholders, or one or more proxy holders representing two Shareholders, or one Shareholder and a proxy holder representing another Shareholder.

The directors have determined that all shareholders of record as of May 25^th, 2017 will be entitled to receive notice of and to vote at the Meeting. Those Shareholders so desiring may be represented by proxy at the Meeting.

To the knowledge of the directors and senior officers of the Company, no person or company beneficially owns, directly or indirectly, or exercises control or direction over, voting securities carrying more than 10% of the outstanding voting rights of the Company other than as set out below.


Name of shareholder	Number of shares		Percentage of issued and outstanding
Sentient Executive GP IV, Limited		223,143,155		60.54	%

PARTICULARS OF MATTERS TO BE ACTED UPON

TO THE KNOWLEDGE OF THE COMPANY’S DIRECTORS, THE ONLY MATTERS TO BE PLACED BEFORE THE MEETING ARE THOSE REFERRED TO IN THE NOTICE OF MEETING ACCOMPANYING THIS CIRCULAR. HOWEVER, SHOULD ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING, THE SHARES REPRESENTED BY THE PROXY SOLICITED HEREBY WILL BE VOTED ON SUCH MATTERS IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS VOTING THE SHARES REPRESENTED BY THE PROXY.

Additional detail regarding each of the matters to be acted upon at the Meeting is set forth below.

A. Financial Statements

The audited financial statements of the Company for the financial year ended December 31, 2016 (the "Financial Statements”), together with the auditors’ report thereon, will be presented to the Shareholders at the Meeting.

B. Election of Directors

The board of directors of the Company (the “Board” or the “Board of Directors”) currently consists of six directors, all of whom are elected annually. The term of office for each of the present directors of the Company expires at the Meeting. Each of the current directors of the Company will be standing for re-lection. At the Meeting, the Shareholders will be asked to consider and, if thought fit, approve an ordinary resolution fixing the number of directors to be elected at the Meeting at six.

It is proposed that the persons named below will be nominated at the Meeting. Each director elected will hold office until the next annual general meeting of the Company or until his successor is duly elected or appointed pursuant to the Articles of the Company unless his office is earlier vacated in accordance with the provisions of the Business Corporations Act (British Columbia) or the Company’s Articles.

Unless the Shareholder has specifically instructed in the form of proxy that the Common Shares represented by such proxy are to be withheld or voted otherwise, the persons named in the proxy will vote FOR the election of each of the proposed nominees set forth below as directors of the Company. Management does not contemplate that any of the nominees will be unable to serve as a director.

The following information relating to the nominees for election to the Board of Directors is based on information received by the Company from said nominees.


		Number of Common
		Shares beneficially
		owned, directly or
		indirectly, or over
		which control or		Principal occupation and
		direction is		if not at present an
		exercised at the		elected director,
Name, present office held and	Director	date of this		occupation during the
province or state of residency	since	Circular		past five (5) years
Gilbert Percy Clark⁽³⁾⁽⁵⁾ Director Quebec, Canada	May 22, 2012		100,046	Geologist, Former Director Mawson Resources, Former Director & Senior Investment Advisor Sentient Asset Management Canada, a Private Management Company

James Clucas^(1)(3)(5) Director British Columbia, Canada	Apr. 2010		385,000	Executive Chairman and Director — Search Minerals; Director — INV Metals

Christopher Messina^{(1) (5)} Director Florida, USA	Oct. 2015		160,000	Former CEO and Co-Founder of RPA Capital, LLC, Managing Partner of Mannahatta Partners LLC

Douglas E. Ford⁽¹⁾ Director British Columbia, Canada	Sept. 1992		242,000	General Manager - Dockside Capital Group Inc.; CFO and Director Whattozee Networks Inc, and Avanti Energy Inc.

Keith Morrison ⁽²⁾⁽⁴⁾ CEO and Director Ontario, Canada	Dec. 2014		533,333	CEO — Gedex Inc; Chairman - Security Devices Inc; Director — Marengo Mining Ltd.

John Sabine Chairman and Director Ontario, Canada	Nov. 2014	893,942		Counsel, Bennett Jones LLP

Notes:

(1) Member of the Audit Committee.

(2) Member of the Disclosure Compliance Committee.

(3) Member of the Corporate Governance Committee.

(4) Member of the Technical Oversight Committee.

(5) Member of the Compensation Committee.

Cease Trade Orders, Bankruptcies, Penalties and Sanctions

Other than as disclosed below, to the knowledge of the Company,

1. none of the nominees for election as a director of the Company is, or was within the ten years prior to the date hereof, a director, chief executive officer or chief financial officer of any company that was subject to a cease trade order, an order similar to a cease trade order or an order that denied such company access to any exemption under securities legislation that was in effect for a period of more than 30 consecutive days and that was issued while that person was acting in such capacity or that was issued after that person ceased to act in such capacity and which resulted from an event that occurred which that person was acting in such capacity;

2. none of the nominees for election as a director of the Company is, or was within the ten years prior to the date hereof, a director or executive officer of any company that, while that person was acting in such capacity, or within a year of that person ceasing to act in such capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets;

3. none of the nominees for election as director of the Company has within the ten years prior to the date hereof become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; and

4. none of the nominees for election as a director of the Company has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable shareholder in deciding whether to vote for a proposed director.

Douglas E. Ford was an officer of Casey Container Corp., formerly Sawadee Ventures, Inc. (“Casey”) from September, 2006 to September 12, 2008, a director from September 2006 until January 19, 2009; and was a control person from September 2006 until July 2010. On January 20, 2009, the British Columbia Securities Commission issued a cease trade order against Casey as a result of a failure to file interim financial statements and related management’s discussion and analysis for the financial period ended September 30, 2008. Casey subsequently filed the required financial statements and related documents and the cease trade order was revoked on June 10, 2010.

The Ontario Securities Commission issued a Cease Trade Order against the Company on June 22, 1992 as a result of a failure to file annual financial statements for the year ended December 31, 1991 and interim financial statements for the financial period ended March 31, 1992. Subsequent to the issuance of the Cease Trade Order, Douglas E. Ford became a director of the Company in September of 1992. The Company subsequently filed the required financial statements and the Cease Trade Order was revoked by the Ontario Securities Commission on July 22, 2010.

C. Appointment of Auditors

Management proposes the reappointment of Dale Matheson Carr-Hilton LaBonte, Chartered Accountants as auditors of the Company at remuneration to be fixed by the Board.

Unless the Shareholder has specifically instructed in the form of proxy that the Common Shares represented by such proxy are to be withheld or voted otherwise, the persons named in the accompanying proxy will vote FOR the re-appointment of Dale Matheson Carr-Hilton LaBonte, Chartered Accountants as auditors of the Company to hold office until the next annual meeting of Shareholders or until a successor is appointed and to authorize the Board to fix the remuneration of the auditors.

D. Approval of Incentive Stock Option Plan

Summary of the Stock Option Plan

The Company has a rolling stock option plan (the “Stock Option Plan”), which was first approved by Shareholders in 2005, authorizing the issuance of incentive stock options to eligible persons for up to an aggregate of 10% of the issued shares of the Company from time to time. The policies of the TSX Venture Exchange (the “TSXV”) require the approval of the Stock Option Plan by Shareholders on an annual basis. There are currently 368,581,886 Common Shares issued and outstanding, and as such the current 10% threshold under the Stock Option Plan is 36,858,188 shares available for incentive stock option grants (“Options”).

Incentive Options under the Stock Option Plan may be granted by the Board to eligible persons, who are directors, officers, consultants of the Company or its subsidiaries (if any), eligible persons who are employees of a company providing management services to the Company, or charitable organizations. Options granted under the Stock Option Plan have a maximum exercise period of up to 10 years, as determined by the board of directors of the Company.

The Stock Option Plan limits the number of stock options which may be granted to any one individual to not more than 5% of the total Common Shares of the Company in any 12 month period (unless otherwise approved by the “disinterested shareholders” of the Company). A “disinterested shareholder” is a Shareholder who is not a director, officer, promoter, or other insider of the Company, or its associates or affiliates, as such terms are defined under the Securities Act (British Columbia).

The number of Options granted to any one consultant or person employed to provide investor relations activities in any 12-month period must not exceed 2% of the total issued Common Shares Company. Any Options granted under the Stock Option Plan will not be subject to any vesting schedule, unless otherwise determined by the board of directors of the Company or required by the policies of the TSXV.

Options under the Stock Option Plan may be granted at an exercise price which is at or above the current discounted market price (as defined under the policies of the Exchange) on the date of the grant. In the event of the death or permanent disability of an optionee, any option granted to such optionee will be exercisable upon the earlier of 365 days from the date of death or permanent disability, or the expiry date of the Option. In the event of the resignation, or the termination or removal of an optionee without just cause, any Option granted to such optionee will be exercisable for a period of 90 days thereafter. In the event of termination for cause, any Option granted to such optionee will be cancelled as at the date of termination.

Shareholder Approval

At the Meeting, Shareholders will be asked to consider and vote on the following ordinary resolution (the “Option Plan Resolution”) to ratify and approve the continuation of the Stock Option Plan:

"BE IT RESOLVED THAT the Company’s stock option plan be and is hereby ratified and approved as the stock option plan of the Company until the next annual general meeting of the Company.”

The Board is of the view that the Stock Option Plan provides the Company with the flexibility to attract and maintain the services of executives, employees and other services providers in competition with the other companies the industry. A copy of the Stock Option Plan will be available for inspection at the Meeting. A Shareholder may also obtain a copy of the Stock Option Plan by contacting the Company by telephone at (604) 770-4334.

The Board unanimously recommends that Shareholders vote in favour of the continuation of the Stock Option Plan. Unless otherwise directed, the persons named in the accompanying proxy intend to vote FOR the Option Plan Resolution.

EXECUTIVE COMPENSATION
(for the financial year ended December 31, 2016)

For purposes of this Circular, “named executive officer” of the Company means an individual who, at any time during the year, was:

1. the Company’s chief executive officer (“CEO”);

2. the Company’s chief financial officer (“CFO”);

3. the Company’s most highly compensated executive officer, other than the CEO and CFO, at the end of the Company’s financial year ended December 31, 2016 and whose total compensation was, individually, more than $150,000 for that financial year; and

4. each individual who would be a named executive officer under paragraph (3) but for the fact that the individual was neither an executive officer of the Company, nor acting in a similar capacity, at the end of the Company’s financial year ended December 31, 2016;

(each a “Named Executive Officer” or “NEO”).

Based on the foregoing definition, during the Company’s financial year ended December 31, 2016 of the Company, there were four Named Executive Officers, namely, its Chief Executive Officer, Keith Morrison, its President, Mark Fedikow, its Chief Financial Officer, Cheryl Messier and its Vice President of Exploration, Patricia Tirschmann.

Compensation Discussion and Analysis

Prior to establishing the Compensation Committee, the Company did not have in place any formal objectives, criteria or analysis; instead, it relied mainly on Board discussion.

The Company’s executive compensation program has three principal components: base salary, incentive bonus plan and stock options.

Base Salary

The Company provides senior officers with base salaries or consulting fees which represent their minimum compensation for services rendered, or expected to be rendered. NEOs’ base compensation depends on the scope of their experience, responsibilities, leadership skills, performance, length of service, general industry trends and practices, competitiveness, and the Company’s existing financial resources.

Base salary is a fixed element of compensation that is payable to each NEO for performing the specific duties of his or her position. The amount of base salary is determined through negotiation of employment terms with each NEO and is determined on an individual basis. While base salary is intended to fit into the Company’s overall compensation objectives by serving to attract and retain talented executive officers, the size of the Company and the nature and stage of its business also impacts the level of base salary. Compensation is set with informal reference to the market for similar jobs in Canada and internationally.

Incentive Bonuses

Incentive bonuses, in the form of cash payments, are designed to add a variable component of compensation based on corporate and individual performances for executive officers and employees. As the Company grows and develops its projects, it is expected that an annual incentive award program will be formalized that will clearly articulate performance objectives and specific measurable goals that will be linked to individual performance criteria set for the NEOs and other executive officers. No bonuses were paid to executive officers and employees during the Company’s financial years ended December 31, 2016 or 2015.

Option-Based Awards

Stock options are granted to provide an incentive to the directors, officers, employees and consultants of the Company to achieve the longer-term objectives of the Company; to give suitable recognition to the ability and industry of such persons who contribute materially to the success of the Company; and to attract and retain persons of experience and ability, by providing them with the opportunity to acquire an increased proprietary interest in the Company. The Company awards stock options to its executive officers based upon the recommendation of the Compensation Committee, which recommendation is based on the Compensation Committee’s review of a proposal from the Chief Executive Officer. Previous grants of incentive stock options are taken into account when considering new grants.

Implementation of a new incentive stock option plan and amendments to the existing stock option plan are the responsibility of the Compensation Committee.

Other Compensation

Other than as described below under “Termination and Change of Control Benefits” the Company has no other forms of compensation, although payments may be made from time to time to individuals or companies they control for the provision of consulting services. Such consulting services are paid for by the Company at competitive industry rates for work of a similar nature by reputable arm’s length services providers.

Compensation Risks

The Compensation Committee is responsible for considering, establishing and reviewing executive compensation programs, and whether the programs encourage unnecessary or excessive risk taking. The Company believes the programs are balanced and do not motivate unnecessary or excessive risk taking.

Base salaries are fixed in amount thus do not encourage risk taking. While annual incentive awards and bonuses focus on the achievement of short term or annual goals and short term goals may encourage the taking of short-term risks at the expense of long term results, the Company’s annual incentive award program is designed to represent a small percentage of employees’ total compensation opportunities. No bonuses were paid to executive officers and employees during the Company’s financial years ended December 31, 2016 or 2015.

Option awards are important to further align NEOs’ interests with those of the Shareholders. The ultimate value of the awards is tied to the Company’s stock price and, since awards are staggered and subject to long-term vesting schedules, they help ensure that NEOs have significant value tied to long-term stock price performance.

Hedging

The Company has not established any policies related to the purchase by directors or executive officers of the Company of financial instruments (including prepaid variable forward contracts, equity swaps, collars, or units of exchange funds) that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by any director or executive officer of the Company.

Summary Compensation Table

The following table sets forth the total compensation paid to or earned by the Named Executive Officers for the Company’s three most recent completed financial years:

Name and principal position

Year ended Dec. 31

Salary ($)

Share-based awards ($)

Option- based awards⁽¹⁾ ($)

Annual incentive

Long- term

plans

incentive plans

2016

351,250

Nil

46,741

Nil

397,991

Keith Morrison⁽²⁾

2015

325,000

Nil

325,000

Chief Executive Officer

2014

27,083

Nil

208,006

Nil

235,089

Mark Fedikow⁽³⁾

President and former

2016

272,436

Nil

14,022

Nil

286,458

Interim Chief Executive

2015

114,667

Nil

114,667

Officer

2014

72,000

Nil

167,215

Nil

239,215

Cheryl Messier⁽⁵⁾

2016

102,788

Nil

7,011

Nil

109,799

Chief Financial Officer and

2015

69,000

Nil

69,000

Secretary

2014

69,000

Nil

158,366

Nil

227,366

Patricia Tirschmann

2016

Vice President of

2015

203,847

Nil

17,528

Nil

221,375

Exploration

2014

200,000

Nil

111,095

Nil

311,095

115,461

Nil

115,461

Notes:

(1) The value of the option-based awards was calculated based on the fair value of the options on their grant date using the Black Scholes option pricing model. The Company chose the Black-Scholes model because it is a widely recognized and utilized model for option pricing. In calculating the fair value of options for the 2016 option grants, management assumed an average risk-free interest rate of 068%-0.79% an expected dividend yield of 0%, an expected life of five years and an average share price volatility of 110.60%-113.17%. In calculating the fair value of options for the options granted in 2015, management assumed an average risk-free interest rate of 0.64%-0.79%, an expected dividend yield of 0%, an expected life of five years and an average share price volatility of 110.60%-115.88%. In calculating the fair value of options for the 2014 option grants, management assumed an average risk-free interest rate of 1.54%-1.67%, an expected dividend yield of 0%, an expected life of five years and an average share price volatility of 168.57%-170.23%.

(2) Keith Morrison was appointed Chief Executive Officer of the Company on December 18, 2014.

(3) Mark Fedikow, President of the Company, also served as the Interim Chief Executive Officer of the Company during the period following the resignation of Richard J. Mark on June 17, 2014 and prior to the appointment of Keith Morrison as Chief Executive Officer of the Company on December 18, 2014.

(4) Pursuant to a management services arrangement, the Company paid or accrued $72,000 in both 2015 and 2014 in management fees to Mount Morgan Resources Ltd. for management services. Mount Morgan Resources Ltd. is a private company controlled by Mark Fedikow.

(5) Alex Dann replaced Cheryl Messier as Chief Financial Officer on March 1, 2017.

Incentive Plan Awards

Outstanding Share -Based Awards and Option -Based Awards

The following table sets forth the options granted to the Named Executive Officers to purchase or acquire securities of the Company outstanding at the end of the Company’s financial year ended December 31, 2016.


	Number of			Value of
	Securities			Unexercised
	Underlying	Option Exercise		In-the-Money
	Unexercised Options	Price	Option Expiration	Options
Name	(#)	($)	Date	($)⁽¹⁾
Keith Morrison, Chief	1,000,000	$0.22	December 19, 2019	Nil
Executive Officer	1,000,000	$0.21	January 28, 2021
Mark Fedikow, President	75,000 265,000 50,000 300,000	$0.24 $0.62 $0.26 $0.21	August 13, 2017 July 9, 2019 September 26, 2019 January 28, 2021	Nil

Cheryl Messier, Chief Financial Officer and Secretary⁽²⁾	200,000 243,000 35,000 150,000	$0.24 $0.62 $0.62 $0.21	August 13, 2017 July 9, 2019 July 9, 2019 January 28, 2021	Nil

Patricia Tirschmann, Vice President of Exploration	500,000 372,000	$0.275 $0.21	February 03, 2020 January 28, 2021	Nil

Notes:

(1) Calculated based on the difference between the closing market price of the Common Shares on the last trading day of the most recently completed financial year (being $0.09 on December 30, 2016) and the exercise price of the options on that date.

(2) Alex Dann replaced Cheryl Messier as Chief Financial Officer on March 1, 2017.

Incentive Plan Awards — Value Vested or Earned During the Year

The following table sets forth the value vested or earned during the year of option-based awards, share-based awards and non-equity incentive plan compensation paid to Named Executive Officers during the Company’s financial year ended December 31, 2016. The aggregate value of the option-based awards vested during the year is based on the difference between the Company share price on the vesting day of any options that vested during the financial year ended December 31, 2016 and the exercise price of the options.


		Non-Equity
		Incentive Plan
	Option-based Awards	Compensation -
	- Value Vested	Value Earned During
	During the Year	the Year
Name	($)	($)
Keith Morrison, Chief Executive Officer	Nil	Nil

Mark Fedikow, President and former Interim Chief Executive Officer	Nil	Nil

Cheryl Messier, Chief Financial Officer and Secretary⁽¹⁾	Nil	Nil

Patricia Tirschmann, Vice President of Exploration	Nil	Nil

Notes:

(1) Alex Dann replaced Cheryl Messier as Chief Financial Officer on March 1, 2017.

Termination and Change of Control Benefits

Keith Morrison Employment Agreement

Keith Morrison and the Company entered into an employment agreement dated December 15, 2014, setting out the terms and conditions of Mr. Morrison’s employment as Chief Executive Officer of the Company.

Under the employment agreement, Mr. Morrison is entitled to a base annual salary of $250,000.

Under the employment agreement, the Company also agreed to grant to Mr. Morrison 1,000,000 options, each with a five-year term. Such options were granted to Mr. Morrison on December 22, 2014 (see “Executive Compensation – Incentive Plan Awards”). Under the employment agreement, the Company also agreed to grant to Mr. Morrison $75,000 per year in restricted share units (RSUs), each with a duration of three years. However, pending granting the RSUs it was agreed that Mr. Morrison’s base salary will be calculated on the basis of an annual amount of $325,000.

If the employment agreement is terminated without cause by the Company during a Window Period (as defined below), or by Mr. Morrison for Good Reason (as defined below) during a Window Period, the Company shall pay to Mr. Morrison on the severance date, as his whole entitlement to severance pay, a lump sum cash amount equal to the total of twenty-four months pay at Mr. Morrison’s base salary in effect at the date of termination. If the employment agreement is terminated without cause by the Company outside a Window Period following a change of control, or by Mr. Morrison for Good Reason outside of Window Period, the Company shall pay to Mr. Morrison on the severance date, as his whole entitlement to severance pay, a lump sum cash amount equal to the total of eighteen (18) months’ pay at Mr. Morrison’s base salary in effect at the date of termination.

In the event of any severance termination listed above, to the extent that any RSUs or options that have been granted, but that have not vested, would have, but for such termination, vested during the 24-month period following such termination, such RSUs or options shall immediately vest effective on the severance date subject to the terms of the Share Award Plan or Stock Option Plan, as the case may be. All such options (together with RSUs or options vested on or prior to the severance date) may be exercised following the severance date in accordance with the terms of the Stock Option Plan or Share Award Plan, as the case may be.

Under the employment agreement, a “Window Period” means the period surrounding a Change of Control (as defined in the employment agreement) commencing on the earlier of (i) the public announcement of a Change of Control, (ii) the entry by the Company of an agreement with an Acquiror that will result in a Change of Control, or (ii) occurrence of such Change of Control, and ending twelve months after the closing of such Change of Control (provided that the Window Period shall not apply if the Change of Control transaction does not ultimately occur).

Under the employment agreement, “Good Reason” means, without Mr. Morrison’s consent, any of the following: (i) any material adverse change in Mr. Morrison’s status, position, authority or responsibilities in effect under the employment agreement; (ii) any action of or inaction by the company that would give rise to constructive dismissal at common law in British Columbia; (iii) any reduction by the Company of Mr. Morrison’s base salary or material adverse change in Mr. Morrison’s entitlement to benefits or other form of non-discretionary remuneration; or (iv) any failure by the Company to comply and satisfy its obligations under the employment agreement to have any successor company assume the Company’s obligations under the employment agreement.

Mark Fedikow Employment Agreement

Mark Fedikow and the Company entered into an employment agreement dated September 1, 2015, setting out the terms and conditions of Mr. Fedikow’s employment as President of the Company.

Under the employment agreement Mr. Fedikow’s employment commenced on September 1, 2015, however, for any purpose requiring a calculation involving his start date, his start date is deemed to be May 1, 2010. May 1, 2010 represents the beginning of Mr. Fedikow’s relationship with the Company through Mount Morgan Resources Ltd.

Under the employment agreement, Mr. Fedikow is entitled to a base annual salary of $200,000.

Under the employment agreement, the Company also agreed to grant to Mr. Fedikow $50,000 per year in restricted share units, each with a duration of three years. However, pending the issuance of the RSUs, it was agreed that Mr. Fedikow’s base salary will be calculated on the basis of an annual amount of $250,000.

Under the employment agreement, if Mr. Fedikow is terminated without cause, the Company shall pay a lump sum payment or salary continuance at the Company’s sole discretion equal to eighteen months pay at Mr. Fedikow’s base salary.

In the event of a change of control, if Mr. Fedikow terminates the employment agreement during the six month period following such event, the Company shall pay a lump sum payment or salary continuation at the Company’s sole discretion equal to twenty-four months pay at Mr. Fedikow’s base salary.

Patricia Tirschmann Employment Agreement

Patti Tirschmann and the Company are parties to an employment agreement dated January 15, 2015, setting out the terms and conditions of Ms. Tirschmann’s employment as Vice-President, Exploration of the Company. Under the employment agreement, Ms. Tirschmann is entitled to a base salary of $200,000.

Under the employment agreement Ms. Tirschmann’s employment commenced on January 15, 2015, however, for any purpose requiring a calculation involving her start date, her start date is deemed to be May 12, 2014 which represents the beginning of Ms. Tirschmann’s relationship with the Company.

Under the employment agreement, if Ms. Tirschmann is terminated without cause, the Company shall pay a lump sum payment or salary continuance at the Company’s sole discretion equal to six month’s salary plus an additional one month for each consecutive year of service since Ms. Tirschmann’s start date, to a cumulative maximum of twelve months.

In the event of a change of control, if Ms. Tirschmann terminates the employment agreement during the six month period following such event, the Company shall pay a lump sum payment or salary continuance at the Company’s sole discretion equal to twelve month’s pay at Ms. Tirschmann’s base salary.

Estimated Termination and Change of Control Payments

The following shows the estimated incremental payments that would be payable to each of the NEOs of the Company in the event of a change of control or termination without cause of such NEOs on December 31, 2016.


	Estimated Payment			Estimated Payment
	for a Termination			for a Termination
	without Cause or			without Cause or
	resignation for			resignation for
	Good Reason during			Good Reason outside
	a Window			a Window
	Period⁽¹⁾			Period⁽²⁾
Name		($	)		($	)

Keith Morrison, Chief Executive Officer		650,000			487,500

Notes:

(1) Represents 24 months’ salary at $325,000 per annum, as well as the value of $nil options that would become vested as a result of such event, based on the closing price of the Common Shares of $0.09 on December 31, 2016.

(2) Represents 18 months’ salary at $325,000 per annum, as well as the value of $nil options that would become vested as a result of such event, based on the closing price of the Common Shares of $0.09 on December 31, 2016.


			Estimated
	Estimated Change of		Termination Without
	Control Payment		Cause Payment
Name	($)		($)
Mark Fedikow, President and former Interim Chief Executive Officer		500,000		375,000

Cheryl Messier, Chief Financial Officer and Secretary⁽¹⁾		105,000		105,000

Patricia Tirschmann, Vice President of Exploration		200,000		143,055

Notes:

(1) Alex Dann replaced Cheryl Messier as Chief Financial Officer on March 1, 2017.

Director Compensation

Director Compensation Table

The following table sets forth the value of all compensation provided to directors, not including those directors who are also Named Executive Officers, for the Company’s financial year ended December 31, 2016.


				Option-Based			All Other
	Fees Earned			Awards⁽¹⁾			Compensation			Total
Name		($	)		($	)		($	)		($	)

Gilbert Percy Clark		—			12,153		Nil				12,153

James Clucas		24,000			15,471		Nil				39,471

Douglas E. Ford		24,000⁽²⁾			15,471		Nil				51,471

Christopher Messina		24,000			12,386		Nil				36,386

John Sabine		36,000			21,033		Nil				57,033

Neil Richardson⁽³⁾		54,548			14,022		Nil				68,570

Edward D. Ford⁽⁴⁾		12,000⁽²⁾			15,471		Nil				27,471

John Roozendaal⁽⁴⁾		12,000			12,386		Nil				24,386

Notes:

(1) The value of the option-based awards was calculated based on the fair value of the options on their grant date using the Black-Scholes option pricing model. The Company chose the Black-Scholes model because it is a widely recognized and utilized model for option pricing. In calculating the fair value of options for the options granted in 2016, management assumed an average risk-free interest rate of 0.68%-0.79%, an expected dividend yield of 0%, an expected life of five years and an average share price volatility of 110.60%-113.17%.

(2) Pursuant to an Amended Management Services Agreement dated as of May 1, 2010, the Company engaged Dockside Capital Group Inc. (“Dockside”) for management services. Dockside is a management services company controlled, in part, by Edward D. Ford and Douglas E. Ford, each of whom was a director of the Company during the financial year ended December 31, 2016. The monthly management fee payable under the Agreement is $4,000, plus applicable taxes.

(3) Neil Richardson resigned from the Company on May 31, 2016.

(4) Edward D. Ford and John Roozendaal did not stand for re-election at the 2015 annual meeting of Shareholders.

Outstanding Share -Based Awards and Option -Based Awards

The following table sets forth the options granted to the directors of the Company, not including those directors who are also Named Executive Officers, to purchase or acquire securities of the Company outstanding at the end of the Company’s financial year ended December 31, 2016.


	Option-Based
	Awards-Number of
	Securities			Value of Unexercised
	Underlying			In-the-Money
Name	Unexercised Options (#)	Option Exercise Price ($)	Option Expiration Date	Options⁽¹⁾ ($)

Gilbert Percy Clark	375,000 136,000 260,000	$0.24 $0.62 $0.21	August 13, 2017 July 9, 2019 January 28, 2021	Nil Nil Nil

James Clucas	75,000 265,000 331,000	$0.24 $0.62 $0.21	August 13, 2017 July 9, 2019 January 28, 2021	Nil Nil Nil

Douglas E. Ford	75,000 265,000 50,000 331,000	$0.24 $0.62 $0.26 $0.21	August 13, 2017 July 9, 2019 September 26, 2019 January 28, 2021	Nil Nil Nil Nil

Christopher Messina	250,000 265,000	$0.20 $0.21	October 5, 2020 January 28, 2021	Nil Nil

John Sabine	350,000 450,000	$0.21 $0.21	November 5, 2019 January 28, 2021	Nil Nil

Neil Richardson⁽²⁾	Nil	Nil	Nil	Nil

Edward D. Ford⁽³⁾	75,000 265,000 331,000	$0.24 $0.62 $0.21	August 13, 2017 July 9, 2019 January 28, 2021	Nil Nil Nil

John Roozendaal⁽³⁾	75,000 265,000 265,000	$0.24 $0.62 $0.21	August 13, 2017 July 9, 2019 January 28, 2021	Nil Nil Nil

Notes:

(2) Neil Richardson resigned from the Company on May 31, 2016.

(3) Edward E. Ford and John Roozendaal did not stand for re-election at the 2015 annual meeting of Shareholders.

Incentive Plan Awards — Value Vested or Earned During the Year

The following table sets forth the value vested or earned during the year of option-based awards and non-equity incentive plan compensation paid to the directors of the Company, not including those directors who are also Named Executive Officers, during the financial year ended December 31, 2016. The aggregate value of the option-based awards vested during the year is based on the difference between the Company’s share price on the vesting day of any options that vested during the financial year ended December 31, 2016 and the exercise price of the options.


		Non-Equity Incentive
	Option-Based Awards -	Plan Compensation -
	Value Vested During	Value Earned During
	the Year	the Year
Name	($)	($)
Gilbert Percy Clark	Nil	Nil

James Clucas	Nil	Nil

Douglas E. Ford	Nil	Nil

Christopher Messina	Nil	Nil

John Sabine	Nil	Nil

Neil Richardson⁽¹⁾	Nil	Nil

Edward D. Ford⁽²⁾	Nil	Nil

John Roozendaal⁽²⁾	Nil	Nil

Notes:
(1) Neil Richardson resigned from the Company on May 31, 2016.
(2) Edward E. Ford and John Roozendaal did not stand for re-election at the 2015 annual meeting of Shareholders.

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth certain information pertaining to the Company’s equity compensation plan as at the end of the Company’s financial year ended December 31, 2016:

Number of

securities

remaining available

Number of

for future issuance

securities to be

under equity

issued upon

Weighted-average

compensation plans

exercise of

exercise price of

(excluding

outstanding

securities

options, warrants

reflected in column

and rights

(A))⁽¹⁾

Plan Category

)

Equity compensation

Options: 12,823,000

0.37

24,035,188

plans approved by

Warrants: 47,991,018

0.49

security holders

Total

60,814,018

0.46

24,035,188

Note:

(1) Based on a total of 36,858,188 options issuable pursuant to the stock option plan, representing 10% of the Company’s issued and outstanding share capital of 368,581,886 Common Shares as at December 31, 2016.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

None of the directors or executive officers of the Company, no proposed nominee for election as a director of the Company, and no associates or affiliates of any of them, is or has been indebted to the Company or its subsidiaries at any time since the beginning of the Company’s last completed financial year.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Other than as otherwise described in this Circular, no informed person of the Company, no proposed nominee for election as a director of the Company and no associate or affiliate of any of the foregoing, has any material interest, direct or indirect, in any transaction since the commencement of the Company’s last financial year or in any proposed transaction, which, in either case, has materially affected or will materially affect the Company or any of its subsidiaries.

MANAGEMENT CONTRACTS

Management functions of the Company and its subsidiaries are substantially performed by the Company’s directors and executive officers. Other than as described above under “Termination and Change of Control Benefits” the Company has not entered into any contracts, agreements or arrangements with parties other than its directors and executive officers for the provision of such management functions.

CORPORATE GOVERNANCE

General

The Board believes that good corporate governance improves corporate performance and benefits all shareholders. National Policy 58-201 – Corporate Governance Guidelines provides non-prescriptive guidelines on corporate governance practices for reporting issuers such as the Company. In addition, National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”) prescribes certain disclosure by the Company of its corporate governance practices. This disclosure is presented below.

Board of Directors

The Board facilitates its exercise of independent supervision over the Company’s management through frequent meetings of the Board.

The Board will, assuming the election of management’s nominees for appointment to the Board as described in this Circular, be comprised of six directors, five of whom will be independent for the purposes of NI 58-101. Keith Morrison is not independent as he is Chief Executive Officer of the Company.

Directorships

Certain of the directors and proposed directors are also directors of other reporting issuers, as follows:


Director		Other Reporting Issuers
James Clucas		Search Minerals Inc.; INV Metals Inc.

Douglas E. Ford		Whattozee Networks Inc.; Avanti Energy Inc.

Keith Morrison		Era Resources Inc.; Security Devices International

John Sabine		Seabridge Gold Inc.

Orientation and Continuing Education

New Board members receive an orientation package which includes reports on operations and results, and public disclosure filings by the Company. Board meetings are sometimes held at the Company’s offices and, from time to time, are combined with presentations by the Company’s management to give the directors additional insight into the Company’s business. In addition, management of the Company makes itself available for discussion with all Board members.

Ethical Business Conduct

The Board has found that the fiduciary duties placed on individual directors by the Company’s governing corporate legislation and the common law and the restrictions placed by applicable corporate legislation on an individual director’s participation in decisions of the Board in which the director has an interest have been sufficient to ensure that the Board operates independently of management and in the best interests of the Company.

Nomination of Directors

The Board considers its size each year when it considers the number of directors to recommend to the shareholders for election at the annual meeting of shareholders, taking into account the number required to carry out the Board’s duties effectively and to maintain a diversity of view and experience.

The Board does not have a nominating committee, and these functions are currently performed by the Board as a whole. However, if there is a change in the number of directors required by the Company, this policy will be reviewed.

Compensation Committee

Prior to March 27, 2014, the Company did not have a separate Compensation Committee and compensation matters were dealt with by the entire Board.

Effective March 27, 2014, a Compensation Committee was created. The Compensation Committee is responsible for, among other things, evaluating the performance of the Company’s executive officers, determining or making recommendations to the Board with respect to the compensation of the Company’s executive officers, making recommendations to the Board with respect to director compensation, incentive compensation plans and equity-based plans, making recommendations to the Board with respect to the compensation policy for the employees of the Company or its subsidiaries and ensuring that the Company is in compliance with all legal requirements with respect to compensation disclosure. In performing its duties, the Compensation Committee has the authority to engage such advisors, including executive compensation consultants, as it considers necessary.

The Compensation Committee is currently composed of James Clucas (Chair), Gilbert Percy Clark and Christopher Messina. Mr. Clucas, Clark and Messina are independent directors within the meaning set out in NI 58-101. Each of the members of the Compensation Committee are experienced participants in business or finance, and have sat on the boards of directors of other companies, charities or business associations, in addition to the Board of the Company.

The recommendations of the Compensation Committee are based primarily on analysis which compares the Company’s pay levels and compensation practices with other reporting issuers of the same size as and which are active in the industry and/or market in which the Company competes for talent. This analysis provides valuable information that will allow the Company to make adjustments, if necessary, to attract and retain the best individuals to meet the Company’s needs and provide value to the Company’s shareholders.

Other Board Committees

In addition to the Audit Committee and the Compensation Committee, effective March 27, 2014, the Board formed the following committees with the members indicated:


Committee	Director/Officer Members	Description of Function of Committee
Disclosure Compliance Committee	Mark Fedikow (Chair), Keith Morrison	The Disclosure Committee (the “Committee”) shall assist the Company’s officers and directors (collectively, the “Senior Officers”) fulfilling the Company’s and their responsibilities regarding (i) the identification and disclosure of material information about the Company and (ii) the accuracy, completeness and timeliness of the company’s financial reports.

Corporate Governance Committee	Douglas E. Ford (Chair), James Clucas, Gilbert Clark	Maintain the system of rules, practices and processes by which the Company is directed and controlled.

Technical Oversight Committee	Mark Fedikow (Chair), Keith Morrison	Discussing, developing and applying specialist geotechnical knowledge related to the Company’s materials and disclosure.

Assessments

Due to the minimal size of the Company’s Board of directors, no formal policy has been established to monitor the effectiveness of the directors, the Board and its committees.

AUDIT COMMITTEE

Under National Instrument 52-110 – Audit Committees (“NI 52-110”), reporting issuers are required to provide disclosure with respect to their Audit Committee including the text of the Audit Committee’s Charter, composition of the Committee, and the fees paid to the external auditor. The Board adopted an audit committee charter on May 2, 2006. The Company provides the following disclosure with respect to its Audit Committee:

Audit Committee Charter

The Audit Committee has adopted an audit committee charter, a copy of which is available on SEDAR under the Company’s issuer profile at www.sedar.com.

Composition of Audit Committee

The following are the members of the Audit Committee:


Name	Whether Independent⁽¹⁾	Whether Financially Literate⁽²⁾

Douglas E. Ford	Independent	Financially Literate

James Clucas	Independent	Financially Literate

Christopher Messina	Independent	Financially Literate

Notes:

(1) A member of an audit committee is independent if the member has no direct or indirect material relationship with the Company, which could, in the view of the Board of Directors, reasonably interfere with the exercise of a member’s independent judgment.

(2) An individual is financially literate if he has the ability to read and understand a set of financial statements that present a breadth of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements.

Relevant Education and Experience

The relevant education and/or experience of each member of the Audit Committee is as follows:

Mr. Douglas E. Ford holds a BA in Political Science from the University of British Columbia in 1986. Mr. Ford is also directly responsible for the financial reporting of several public and private companies and has over 25 years’ experience in financial reporting.

Mr. Clucas has over 31 years of experience and expertise in mining exploration and production. Mr. Clucas obtained a Chartered Management Accountant designation in the United Kingdom. From 1970 to 1979, Mr. Clucas was the Chief Financial Officer for the Manitoba Division of Inco Ltd., and subsequently served in the same capacity with the Ontario Division of Inco Ltd.

Mr. Messina is an experienced investment banker with over 20 years’ experience in the capital markets. He has advised multiple global exchanges, commodity producers and traders, private equity firms, corporations and sovereign wealth funds. He is currently an advisor to artificial intelligence and big data software companies focused on applying advanced computational techniques to the global capital and cyber security markets. He has a BA in Anthropology from the University of Chicago, where he was a National Merit Scholar, and an MBA in Finance from the Australian Graduate School of Management.

Audit Committee Oversight

At no time since the commencement of the Company’s financial year ended December 31, 2016 was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board of Directors.

Reliance on Certain Exemptions

At no time since the commencement of the Company’s financial year ended December 31, 2016 has the Company relied on the exemption in Section 2.4 of NI 52-110 (De Minimis Non-Audit Services), or an exemption from NI 52-110, in whole or in part, granted under Part 8 of National Instrument 52-110.

Pre-Approval Policies and Procedures

The Audit Committee is authorized by the Board to review the performance of the Company’s external auditors and approve in advance provision of services other than auditing and to consider the independence of the external auditors, including a review of the range of services provided in the context of all consulting services bought by the Company. The Audit Committee is authorized to approve in writing any non-audit services or additional work which the Chairman of the Audit Committee deems is necessary, and the Chairman of the Audit Committee will notify the other members of the Audit Committee of such non-audit or additional work and the reasons for such non-audit work for the Audit Committee’s consideration and, if thought fit, approval in writing.

External Auditor Service Fees

The fees billed by the Company’s external auditors in each of the last two financial years for audit and non-audit related services provided to the Company or its subsidiaries are as follows:


Financial Year Ending Dec 31		Audit Fees		Audit-Related Fees	Tax Fees		All Other Fees
2016		$25,500		Nil	$1,250		$14,500
	2015	$	30,500	Nil	$	1,250	Nil

Exemption

The Company is a “venture issuer” as defined in NI 52-110 and as such is exempt from the requirements of Part 3 Composition of the Audit Committee and Part 5 Reporting Obligations of NI 52-110.

ADDITIONAL INFORMATION

Financial information is provided in the Company’s audited annual financial statements and accompanying management’s discussion and analysis (“MD&A”) for the year ended December 31, 2016. Any person or company who wishes to receive interim financial statements from the Company may deliver a written request for such material to the Company or the Company’s agent, together with a signed statement that the persons or company is the owner of securities of the Company. Shareholders who wish to receive interim financial statements are encouraged to send the enclosed mail card, together with the completed form of proxy, in the addressed envelope provided, to the Company’s registrar and transfer agent, Computershare Investor Services Inc., Suite 300, 510 Burrard Street, Vancouver, British Columbia, V6C 3B9. The Company will maintain a supplemental mailing list of persons or companies wishing to receive interim financial statements.

Shareholders wishing to obtain copies of the Company’s financial statements and related MD&A can do so by contacting the Company at Suite 2200, 1055 West Hastings Street, Vancouver, BC, V6E 2E9 Phone: (604) 770-4334. Additional information relating to the Company is available on SEDAR under the Company’s issuer profile at www.sedar.com.

GENERAL

Unless otherwise specified, all matters referred to herein for approval by the Shareholders require a simple majority of the Shareholders voting, in person or by proxy, at the Meeting. Where information contained in this Circular rests specifically within the knowledge of a person other than the Company, the Company has relied upon information furnished by such person.

The contents of this Circular have been approved and this mailing has been authorized by the Directors of the Company.

DATED at Vancouver, British Columbia as of the 25^th day of May, 2017.

BY ORDER OF THE BOARD OF DIRECTORS
“Keith Morrison”
Chief Executive Officer
North American Nickel Inc.

SAM SAMPLE

IGTQ 000001

123 SAMPLES STREET SAMPLETOWN SS X9X X9X CANADA

Security Class COMMON SHARES


Holder Account Number
C9999999999		IND

—
Fold

Form of Proxy — Annual General and Special Meeting to be held on June 29, 2017

This Form of Proxy is solicited by and on behalf of Management.

Notes to proxy

1. Every holder has the right to appoint some other person or company of their choice, who need not be a holder, to attend and act on their behalf at the meeting or any adjournment or postponement thereof. If you wish to appoint a person or company other than the persons whose names are printed herein, please insert the name of your chosen proxyholder in the space provided (see reverse).

2. If the securities are registered in the name of more than one owner (for example, joint ownership, trustees, executors, etc.), then all those registered should sign this proxy. If you are voting on behalf of a corporation or another individual you must sign this proxy with signing capacity stated, and you may be required to provide documentation evidencing your power to sign this proxy.

3. This proxy should be signed in the exact manner as the name(s) appear(s) on the proxy.

4. If this proxy is not dated, it will be deemed to bear the date on which it is mailed by Management to the holder.

5. The securities represented by this proxy will be voted as directed by the holder, however, if such a direction is not made in respect of any matter, this proxy will be voted as recommended by Management.

6. The securities represented by this proxy will be voted in favour or withheld from voting or voted against each of the matters described herein, as applicable, in accordance with the instructions of the holder, on any ballot that may be called for and, if the holder has specified a choice with respect to any matter to be acted on, the securities will be voted accordingly.

7. This proxy confers discretionary authority in respect of amendments or variations to matters identified in the Notice of Meeting or other matters that may properly come before the meeting or any adjournment or postponement thereof.

8. This proxy should be read in conjunction with the accompanying documentation provided by Management.

Proxies submitted must be received by 10:00 AM (Eastern Time) on June 27, 2017.

VOTE USING THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!

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To Vote Using the Internet

• Call the number listed BELOW from a touch tone telephone.

1-866-732-VOTE (8683) Toll Free

•

Go to the following web site: www.investorvote.com

• Smartphone?

For Against

Number of Directors

To set the number of Directors at six (6).

2. Election of Directors

1. John Sabine

For Withhold

2. Keith Morrison

For Withhold

3. Gilbert Percy Clark

For Withhold

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James Clucas		05. Douglas E. Ford	06. Christopher Messina
For	Withhold

3. Appointment of Auditors

Appointment of Dale Matheson Carr-Hilton LaBonte LLP as Auditors of the Company for the ensuing year and authorizing the Directors to fix their remuneration.

For Against

4. Stock Option Plan

Approve the Company’s Stock Option Plan, which makes a total of 10% of the issued and outstanding shares of the Company available for issuance thereunder.

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Authorized Signature(s) — This section must be completed for your instructions to be executed.

I/We authorize you to act in accordance with my/our instructions set out above. I/We hereby revoke any proxy previously given with respect to the Meeting. If no voting instructions are indicated above, this Proxy will be voted as recommended by Management.

Signature(s) Date

SAM SAMPLE

IGTQ 000002

123 SAMPLES STREET SAMPLETOWN SS X9X X9X AUSTRALIA

Security Class COMMON SHARES


Holder Account Number
C9999999999		IND

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Form of Proxy — Annual General and Special Meeting to be held on June 29, 2017

This Form of Proxy is solicited by and on behalf of Management.

Notes to proxy

3. This proxy should be signed in the exact manner as the name(s) appear(s) on the proxy.

4. If this proxy is not dated, it will be deemed to bear the date on which it is mailed by Management to the holder.

8. This proxy should be read in conjunction with the accompanying documentation provided by Management.

Proxies submitted must be received by 10:00 AM (Eastern Time) on June 27, 2017.

VOTE USING THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!

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To Vote Using the Telephone

• Call the number listed BELOW from a touch tone telephone.

312-588-4290 Direct Dial

To Vote Using the Internet

• Go to the following web site: www.investorvote.com

• Smartphone?

For Against

Number of Directors

To set the number of Directors at six (6).

2. Election of Directors

1. John Sabine

For Withhold

2. Keith Morrison

For Withhold

3. Gilbert Percy Clark

For Withhold

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James Clucas		05. Douglas E. Ford	06. Christopher Messina
For	Withhold

3. Appointment of Auditors

Appointment of Dale Matheson Carr-Hilton LaBonte LLP as Auditors of the Company for the ensuing year and authorizing the Directors to fix their remuneration.

For Against

4. Stock Option Plan

Approve the Company’s Stock Option Plan, which makes a total of 10% of the issued and outstanding shares of the Company available for issuance thereunder.

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Authorized Signature(s) — This section must be completed for your instructions to be executed.

Signature(s) Date

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

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

C/o Bennett Jones LLP Attn: Sander Grieve 3400 - One First Canadian Place P.O. Box 130, Toronto, Ontario M5X 1A4
——————————————————————————————————— (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 31, 2017	By:	Douglas Ford
	Name:	Douglas Ford
	Title:	Director

Exhibit No.		Description

99.1		Q1 2017 Financial Statements
99.2		Q1 2017 Management Discussion and Analysis
99.3		CEO certification Q1 2017
99.4		CFO certification Q1 2017
99.5		2017 Annual General Meeting Notice & Circular
99.6		2017 Annual General Meeting Proxy - sample