An anonymous director of Pelham reports

PELHAM INVESTMENT PARTNERS LP ISSUES LETTER TO SHAREHOLDERS AND FILES PROXY CIRCULAR TO RECONSTITUTE THE BOARD OF NICKEL 28 CAPITAL CORP.

Pelham Investment Partners LP, a New York-based investment fund and the single-largest shareholder of Nickel 28 Capital Corp. (formerly Conic Metals Corp.), has advised fellow shareholders that it has issued a letter to shareholders and information circular as well as a form of proxy for use by shareholders in connection with Nickel 28's upcoming annual general and special meeting, to be held on June 12, 2023, beginning at 10 a.m. (Toronto time).

• Management has enriched themselves at shareholders' expense while turning a blind eye to their own serious and long-standing governance failures. Management's recent actions reveal the board to be an entrenched group, which, contrary to their own disclosures, comprises a majority of non-independent directors and whose acts threaten to deprive shareholders of their right to choose who manages their company.
• Pelham is proposing a team of respected, highly qualified and independent professionals to stand for election to the board, who have the right skills and experience to provide effective independent oversight of management.
• Shareholders are urged to vote for each of Pelham's director nominees and withhold votes on any Nickel 28 director nominees using only the yellow proxy ahead of the proxy voting deadline of June 7, 2023, at 9 p.m. Eastern Time.
• Pelham's letter to shareholders and information circular, as well as additional important information, is available at the Save Nickel 28 website. Questions or need voting assistance? Shareholders with questions or who need voting assistance may contact Laurel Hill Advisory Group at 1-877-452-7184 (416-304-0211 outside North America) or by e-mail at assistance@laurelhill.com.

As the largest shareholder of the company, holding approximately 14.3 per cent of Nickel 28's issued and outstanding shares, Pelham believes that the board of directors of the company must be urgently reconstituted in order to ensure that the interests of shareholders are appropriately represented and safeguarded. Accordingly, Pelham is proposing for election to the board at the upcoming meeting, five highly qualified and truly independent individuals. Pelham's nominees are: Edward (Ned) Collery, Daniel Burns, Marilyn Spink, David Whittle and Ross B. Levin. Additional information about Pelham's nominees can be found in its letter to shareholders and information circular.

Pelham expects that, if elected, its nominees will put an end to management's continual failures which have manifested as, among other things, a number of significant governance issues, a lack of independent oversight and a long–standing history of excessive executive compensation. These problems have and continue to harm the interests of Nickel 28 and its shareholders.

Rather than try to distract shareholders with baseless innuendo and insinuation as the board has done, Pelham presents the facts and leaves it to the company's shareholders to decide whether the current board should continue to steward their investment in Nickel 28. Pelham's concerns are briefly summarized herein, and are described in greater detail in its letter to shareholders and information circular (which Pelham strongly recommends shareholders read before making a voting decision for the upcoming meeting).

Nickel 28 suffers from dramatic and long-standing governance failures

Nickel 28's directors and officers are enmeshed in a number of significant and compromising interlocking relationships across various companies which benefit them and harm shareholders. To date, these relationships appear to have flown under the radar -– but no longer:

• As a result of one of these relationships (which, along with its problematic consequences, is described in much more detail in Pelham's letter to shareholders and information circular), director Phillip Williams is, contrary to the current board's claims, not independent, yet, in addition to being put forward as the company's lead independent director he chairs Nickel 28's two-person compensation committee which has approved staggering compensation at substantial expense to the company and its shareholders.
• Nickel 28 director Maurice Swan is also the chairman of the board and serves on the compensation committee of Carbon Streaming Corp. (NEO: NETZ) (OTCQB: OFSTF) (FSE: M2Q) (CSC). Nickel 28 president and director Justin Cochrane is also a director and the chief executive officer of CSC, where both are provided excessive levels of compensation despite CSC's stock price falling roughly 75 per cent in the less than two years since its listing. Pelham believes that a properly advised board should deem this a material relationship, and that Mr. Swan should be considered a non-independent director of Nickel 28.

The current board has also failed to meet basic standards of governance, including:

• With its Dec. 8, 2021, stock-based compensation grant, the board violated the limits on its already generous stock-based compensation plan.
• The board has seemingly backdated its 2022 equity-based compensation grants from Dec. 15 to Dec. 7 to reduce the stated value of those grants in its disclosures to shareholders, which allowed them to claim that the grant value was less than it actually was, reducing reported compensation.
• For several years, and in violation of TSX Venture Exchange listing requirements as well as the company's own board mandate, the company had, at most, only one legally independent director and three non–independent directors. The company's disclosure, including their recently issued management information circular for use in connection with the meeting, is materially false in this regard, and the validity of any "independent determination" of the so-called "independent directors" of the company on a range of matters -– including historic compensation -- is called into serious question.

Egregious levels of compensation

Given the company's poor governance record it should come as no surprise that management receives egregious levels of compensation, paid for with the company's funds and at the direct expense of shareholders:

• Despite not directly operating any assets, Nickel 28 executives receive compensation in the 94th percentile when compared with peers, most of whom actively operate their assets;
• The company also has three redundant layers of management:
  • Craig Lennon (head of Asia Pacific at the company), handles the day-to-day management of the company's interest in the Ramu joint venture and the relevant relationships, as he has for many years and, as far as Pelham can tell, he does so skillfully.
  • Despite Mr. Lennon managing the company's interest in its only asset with active operations, the company's president, Justin Cochrane –- who works only part time at the company (due to the fact that Mr. Cochrane is also the CEO of another public issuer) -- was paid nearly $2.4-million last year ($4.8-million on a full-time equivalent basis or almost six times the peer median CEO compensation) for no discernible incremental effort.
  • On top of having both someone to directly manage the company's interest in its core asset and a president to oversee him, the company also has an executive chairman -– Anthony Milewski –- who was paid roughly $3.3-million last year (roughly five times the peer median compensation), despite the fact that, according to his own (currently public) Instagram account, he apparently spends the bulk of his time at luxurious vacation destinations.
• Conor Kearns, the company's part-time chief financial officer, was provided compensation valued at almost $700,000 last year (and well in excess of $1-million in 2021). The CFO of Nickel 28's predecessor, Cobalt 27 Capital Corp. (which owned all of Nickel 28's assets, and much more), was paid less than $150,000 in the last full year it was a public company.
• Nickel 28 directors are each paid approximately $270,000 a year to serve on a board that, according to the company's own management information circular, only had two full board meetings last year. To put this egregious compensation in context, the median compensation for directors of the Toronto-Dominion Bank (TD) –- Canada's second-largest publicly traded institution, with assets nearly 12,500 times greater than Nickel 28 –- was $275,000 last year. Instead of two meetings, the board of directors of TD had 16 full board meetings last year.

Unacceptable valuation

Under the current board's stewardship, which has been plagued by self-interested decision making, the market has routinely valued Nickel 28's stock at a dramatic discount to net asset values derived from the board and management's own disclosures. Pelham estimates that the company's shares have traded at an average of just 21 per cent of this management-informed net asset value since the company was listed. Given the problems detailed herein, Pelham believes that market concerns with the current board and management are the principal reason for this discount.

Efforts at entrenchment

The current board has made it clear they will not voluntarily undertake the changes to governance and compensation which are necessary to ensure that your company succeeds. When confronted with these problems, both privately and publicly, the board's reaction has been to undertake a concerted campaign of entrenchment. Entrenchment efforts to date include:

• After having ignored, for six months, Pelham's privately written concerns that the board was not in compliance with its own board mandate which requires at least three independent directors, the board appointed Lance C. Frericks to the board less than 48 hours after it became apparent that Pelham's criticism would become public. Mr. Frericks appears to have no public board experience or skills relevant to the company's business. Despite Pelham's questions, the company has not explained why and how he was chosen.
• The board instituted a poison pill despite the fact that management collectively owned enough stock to trigger the poison pill. To make sure they would not have to "eat their own cooking" management included grandfather provisions to ensure management, as a group, would not trigger the pill.
• The board set the record date for the meeting one day prior to the expiry of Pelham's tender offer in a transparent effort to hinder Pelham's ability to vote the shares Pelham purchased in the tender offer. Normally, the company holds its meeting in the late summer but, this year, management moved it up to mid-June and provided no prior notice of the record date. Pelham believes the structuring of the meeting was intended to impede Pelham's director recruitment and nomination efforts and hinder Pelham's ability to vote shares with which it could hold management accountable.
• The board rejected, without any attempt at engagement, a settlement offer Pelham made (Pelham's second formal private attempt at engagement which followed numerous public requests for engagement) that would have provided for the current board members to retain two seats and have substantial discretion over the composition of the remainder of the board. It is cynical and false for the company to claim that a proxy contest was unavoidable inasmuch as Pelham tried, on multiple occasions, to get the board to address its glaring governance and compensation problems voluntarily.
• Concerned that hollow attacks would not work, and in an affront to shareholder democracy, the board is attempting to use a flimsy pretext to deny you the ability to even consider Pelham's alternative slate of highly qualified and truly independent director nominees. Pelham is addressing these legal shenanigans head on and intends to vigorously defend the right of shareholders to have a say on who is elected to the board.
• To date, the company and members of the board have, together, hired several advisers to assist them in their efforts to avoid accountability. These include at least four law firms, a financial adviser, a strategic shareholder adviser and at least one strategic communications adviser. All of these firms, who are working with an entrenched board at the company's expense, represent a waste of shareholder resources.

Pelham has a plan to substantially improve the value of your investment

Contrary the current board's false assertion, Pelham has a credible, actionable and straightforward plan to greatly increase the value of your investment.

For more details on Pelham's plan and how it expects that its nominees will lead the company into a brighter future for all shareholders, please see Pelham's letter to shareholders and information circular.

To be clear, Pelham's truly independent director nominees will act with discipline as they methodically assess and steward the company as the elected representatives of shareholders with both eyes clearly focused on protecting the interests of all shareholders.

If elected, Pelham expects that its nominees will undertake a forensic investigation into the activities of management both prior to and during Pelham's involvement as an activist and will hold former directors to account for any breaches of duty and other acts of self-dealing or corporate malfeasance that they authorized or permitted to occur on their watch. Pelham expects that this investigation would include challenging the validity and legality of any change of control payments that may have been authorized by management in breach of their fiduciary duties to the company.

Vote only the yellow proxy for a better future for Nickel 28

This vote is of critical importance to all shareholders of the company and it is up to shareholders to protect the value of their investment in Nickel 28. Next year, management will, through vesting of stock it has already awarded itself (for no cash consideration), gain ownership over approximately an additional 5 per cent of Nickel 28 and, if history is any guide, management will continue to further increase its ownership interest at shareholder expense. Pelham fears that if shareholders do not replace the incumbent board this year, the situation will become unsalvageable given management's prospective ownership interest.

Pelham welcomes the unsolicited expressions of support it has received from so many shareholders to date but, in order to drive needed change, this support must translate into votes. Every vote counts. Nickel 28 shareholders are urged to vote using only the yellow proxy -– Pelham's form of proxy.

Pelham's yellow form of proxy has been prepared as a universal proxy, meaning that all of Pelham's nominees, as well as the nominees of management, are included as voting options. Pelham determined to provide shareholders with a universal proxy as the practice of utilizing a universal proxy in a contested meeting is becoming increasingly recognized as a governance best practice. Even though management was in possession of the identities of Pelham's nominees and was made aware that the meeting would be contested by Pelham, the board chose not to provide for Pelham's nominees on their form of proxy (for reasons that should be readily apparent to shareholders). Accordingly, shareholders are able to vote for Pelham's nominees or management's nominees (or any combination thereof), on the yellow proxy only. Pelham urges shareholders to vote only the yellow proxy, regardless of how you intend to vote and disregard any proxies or voting instruction forms received from management.

Time is of the essence. In order to ensure your vote is counted at the meeting, please ensure it is received prior to the proxy voting deadline of 9 p.m. (Eastern time) on June 7, 2023.

Even if you have already voted using a blue management proxy or voting instruction form, you have every right to change your vote and support the nomination of our nominees. A later-dated yellow form of proxy or voting instruction form automatically revokes any and all previously submitted forms of proxy or voting instruction forms.

Shareholder questions

For any questions or voting assistance, shareholders should contact Pelham LP's strategic shareholder communications adviser and proxy solicitation agent, Laurel Hill Advisory Group, at 1-877-452-7184 (416-304-0211 outside North America) or by e-mail at assistance@laurelhill.com. Shareholders can also visit savenickel28.com for more information, and sign up to stay up to date.

About Pelham Investment Partners LP

Pelham Investment Partners is private investment firm located in New York, managed and founded by Edward (Ned) Collery in 2021. The company is long-term and value-oriented investors. Pelham, the single-largest shareholder of the company, has held an investment in Nickel 28 since the firm's founding in 2021.

We seek Safe Harbor.