PERTH (miningweekly.com) – ASX-listed Jervois Mining has struck a friendly merger agreement with TSX-listed eCobalt.
Under the terms of the agreement, each eCobalt share will be exchanged for 1.65 common shares in Jervois, representing an implied offer price of C$0.36 an eCobalt share.
The transaction will see Jervois issue some 262.4-million new shares, and if all eCobalt options and warrants were exercised, a further 47-million shares.
eCobalt has entered into an agreement with Dundee Resources to raise C$2-million through the issue of 6.3-million units, which each comprise one common share and one common share purchase warrant. The Dundee transaction is subject to TSX approval.
On the close of the transaction, and taking into effect the Dundee placement, Jervois shareholders will hold a 40% interest in the newly combined company, with eCobalt shareholders holding a 47% interest. TSX-listed M2 Cobalt will retain an 11% interest in the company.
Jervois in January announced an at-market merger with M2 Cobalt, exchanging one of its own shares for every M2 Cobalt share held.
Jervois said on Monday that some 50% of M2 Cobalt’s outstanding shares have signed voting agreements in support of the merger, while Jervois shareholder approval was not required. The M2 Cobalt merger will proceed and will be completed ahead of the eCobalt transaction.
Jervois told shareholders that the merger with eCobalt would result in an enlarged company with greater scale, liquidity and diversification with a re-rating potential.
The new Jervois will have assets in Australia, East Africa and the US, which will include the Idaho cobalt project, along with increased capital market exposure through listings in both Australia and Canada.
eCobalt has previously spent some C$135-million on the Idaho cobalt project, which has a resource of some 45.7-million pounds of cobalt grading at 0.59% in the measured and indicated categories.
A feasibility study for the project is currently under way.
Jervois for its part holds the Nico Young cobalt/nickel deposit, in New South Wales, where the company has reported an inferred mineral resource of 167.8-million tonnes at 0.59% nickel and 0.06% cobalt.
The company has also applied for a prospecting licence over the Kabanga nickel project, in Tanzania and is looking at entry into Uganda through its M2 Cobalt merger.