VANCOUVER (miningweekly.com) – On the same day that cobalt posted the highest-ever recorded price of $60 250/t – up some 127% since the start of 2017 – explorer First Cobalt (FCC) on Monday executed a definitive merger agreement with fellow TSX-V-listed CobalTech Mining.
The transaction, in combination with its separate acquisition of ASX-listed Cobalt One, will consolidate the Cobalt, Ontario mining camp under FCC and give the company control of about 10 000 ha for cobalt exploration and mining.
Following closure of both deals sometime during the second half of the year, FCC will have a portfolio of high-quality exploration assets, 11 former producing mines and a mill facility in the Cobalt, Ontario mining camp.
With an experienced management team based in Toronto, the increased scale of the combined company will enhance its capital markets profile as well as liquidity, provide greater access to capital across the exchanges, and provide for rerating potential.
“This transaction creates immediate value for CobalTech shareholders and allows them to participate in further upside within a larger, more liquid company. Our shared vision of exploring for bulk cobalt mining opportunities in the Ontario Cobalt camp will be facilitated with this merger,” commented CobaltTech CEO Bruce Bragagnolo in a statement on Monday.
“I am pleased to see our two companies coming together. The Cobalt camp has been underexplored for its cobalt potential and has never seen the meaningful land consolidation achieved through this merger and the proposed merger between First Cobalt and Cobalt One. These transactions are expected to create the largest pureplay cobalt explorer in the world and offers an opportunity to revisit this camp on a district scale for openpit mining potential,” added FCC president and CEO Trent Mell.
Under the terms of the agreement, FCC will acquire all issued and outstanding common shares of CobalTech through a court-approved plan of arrangement. CobalTech shareholders will receive 0.2632 of an FCC common share for each CobalTech common share, representing the equivalent of C$0.20 per CobalTech common share.
Completion of the transaction is subject to several conditions, including approval by the shareholders of CobalTech and the acceptance of all required regulatory approvals, including the approval of the TSX-V. The transaction cannot be completed until these conditions are satisfied and the required approvals are obtained, FCC advised.
The company’s stock has been subject to a cease-trade order since the transactions were first announced on June 26, while Canadian regulators review the transaction. FCC believes that trading could resume “in a matter of days”.