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Global Cobalt Corp. (TSXV:GCO) announced a non-brokered private placement or up to CAD $250,000, consisting of up to 5,000,000 units at $0.05 per Unit. Each Unit will be made up of one common share of Global Cobalt and one common share purchase warrant that entitles the holder to acquire an additional common share for 24 months after the closing date. at $0.07 per Warrant Share.
As quoted in the press release:
The Offering is expected to close, subject to approval from the TSX Venture Exchange, on or about May 1, 2015 or such other date as the Company may determine. Proceeds from the Offering will be used to complete the plan of arrangement and spin-out transaction (the “Transaction”) announced on April 7th, 2015.
The non-brokered private placement will consist of the Company issuing up to 5,000,000 Units at a price of $0.05 per Unit. Each Unit consists of one common share of the Company (a “Share”) and one common share purchase warrant (a “Warrant”) entitling the holder to acquire an additional common share of the Company (a “Warrant Share”) for a period of 24 months following the Closing Date at an exercise price of $0.07 per Warrant Share.
In connection with the Offering, the Company may pay finder’s fees to arm’s-length third parties consisting of: (i) cash commission of up to 8% of the gross proceeds of the Offering; and (ii) broker warrants (“Broker Warrants”) in an amount up to 8% of the total number of Units under the Offering. Each Broker Warrant will expire 24 months from the date of issue (the “Broker Warrant Expiry Date”) and will entitle the holder thereof to purchase one Unit of the Company at a price of $0.07 per Unit at any time up until the Broker Warrant Expiry Date.
As announced on April 20th, 2015, Global Cobalt’s majority shareholder, Imperial Mining Holding Limited (“IMHL”), agreed to sign a lock-up arrangement with Global Cobalt fully supporting the plan of arrangement and spin-out of the new energy metals focused company. Key to this lockup is that IMHL, with a 27.8% holding of the Company, has agreed to waive its right to receive securities in SpinCo effectively reducing SpinCo’s outstanding shares and strengthening shareholder’s equity.
Equally important is that all other shareholders of Global Cobalt common shares on the effective date of the Transaction, other than those held directly and indirectly by IMHL, will be entitled to received one SpinCo Share for each common share of Global Cobalt held on the Effective Date.
The spinout transaction should also maximize shareholder value by not only providing exposure to SpinCo’s North American assets and future acquisition initiatives but also through their continued position in Global Cobalt and the interest in its project portfolio in Russia.
In addition to allowing the company to continue to focus efforts on securing and developing Karakul, the company is confident that having a separately financed and managed mineral exploration business will accelerate the development of Werner Lake and Iron Creek, and give scope for new acquisitions in the energy metals sector.
The securities issued in the private placement will be subject to a hold period of four months plus one day following the issue date, under applicable Canadian securities legislation.
The private placement is subject to TSX Venture Exchange approval.
A shareholders’ meeting to consider and vote on the Plan of Arrangement amongst other matters will be held on June 11th, 2015. Additional details of the spin-out transaction will be included in an information circular to be mailed to shareholders of Global Cobalt in connection with the Company’s shareholders meeting referred to above.
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