Cobalt 27 is an electric metals investment vehicle offering exposure to metals used in key technologies related to the electric vehicle and battery energy storage markets. The company owns 2,982 metric tonnes (Mt) of physical cobalt and is acquiring the world’s first producing cobalt nickel stream, the Ramu nickel-cobalt mine.
Cobalt 27 (TSXV:KBLT,FWB:27O) reports it has closed its previously announced bought deal offering, representing a total of 30,800,000 common shares of the company sold at a price of C$9.75 per common share for aggregate gross proceeds of approximately C$300 million.
Cobalt 27 is an electric metals investment vehicle offering exposure to metals integral to key technologies of the electric vehicle and battery energy storage markets. The company owns 2,982 metric tonnes (Mt) of physical cobalt and is acquiring the world’s first producing cobalt nickel stream, the Ramu nickel-cobalt mine.
According to the company, the offering was underwritten by a syndicate of underwriters led by TD Securities (TSX:TD), Credit Suisse (Canada) (VTX:CSGN), BMO Capital Markets (TSX:BMO) and Scotiabank (TSX:BNS) as bookrunners, National Bank Financial (TSX:NA) as co-lead underwriter, and including RBC Capital Markets (TSX:RY), Haywood Securities Inc., Canaccord Genuity (TSX:CF), Cormark Securities and Eight Capital.
As quoted from the press release:
Cobalt 27 has also granted the underwriters an over-allotment option, exercisable in whole or in part, at any time up to 30 days following June 27, 2018, to purchase up to an additional 4,620,000 Common Shares at the issue price.
The net proceeds of the offering will be used, along with the company’s cash on hand, to fund the acquisition by the company of a US$300 million cobalt stream from a subsidiary of Vale (BVMF:VALE3). On June 11, 2018, the company announced it had entered into an agreement with Vale to acquire an amount of finished cobalt equal to 32.6 percent of the cobalt production from Vale’s Voisey’s Bay mine, including from the proposed Voisey’s Bay mine expansion, commencing January 1, 2021, for upfront cash consideration of US$300 million. The upfront cash consideration will represent a prepayment of a portion of the purchase price for the sale of cobalt to Cobalt 27. As at March 31, 2018, the Company had approximately C$195 million of cash on hand.
The common shares issued under the offering were issued pursuant to a short form prospectus dated June 21, 2018 that was filed with securities regulatory authorities in all provinces and territories of Canada, and also offered by way of private placement into the United States pursuant to Rule 144A and other jurisdictions where exempt from any prospectus, registration or other similar requirements.