VANCOUVER (miningweekly.com) – Cobalt direct investment vehicle Cobalt 27 has announced that it plans to add about 720 metric tonnes of physical cobalt metal to its current stockpile of just under 2 200 t.
The Toronto-headquartered company said on Thursday it has entered an agreement with a syndicate of underwriters co-led by TD Securities and Scotiabank, under which it will issue 8.1-million shares on a bought deal basis at an issue price of C$10.50 a common share, for total gross proceeds of about C$85-million. The underwriters will have an overallotment option to purchase up to a further 1.22-million common shares at the issue price.
Cobalt 27 will use the proceeds to buy the cobalt currently under option for $58-million, or $36.39/lb – a 10% premium to the Cobalt High Grade Metal Bulletin asking price of $33/lb on December 6.
“It is management's strong belief that this acquisition of additional physical cobalt will further strengthen Cobalt 27's balance sheet in advance of potential streaming investment opportunities in 2018. In addition, management believes the strengthened balance sheet, size and liquidity will reduce Cobalt 27's cost of capital as it transitions to capitalise on streaming investment opportunities in 2018,” the company said in a news release.
Cobalt 27’s current cobalt holdings are valued at about C$187-million – the largest cobalt holding outside of China. The company is not a miner or explorer, and was created specifically to give institutions and retail investors the opportunity to invest directly in the metal, excluding the significant exploration and development risks miners have to deal with.