Cobalt 27 arranges $85-million bought deal offering
Cobalt 27 Capital Corp. has arranged an $85-million bought deal offering of 8.1 million shares at $10.50 per share. It plans to use the proceeds to buy up to 720 metric tonnes of physical cobalt.
COBALT 27 Capital Corp. has entered into an agreement with a syndicate of underwriters co-led by TD Securities Inc. and Scotiabank pursuant to which Cobalt 27 will issue 8.1 million common shares on a bought deal basis at an issue price of $10.50 per common share for total gross proceeds of approximately $85-million.
Cobalt 27 has granted the underwriters an overallotment option, exercisable in whole or in part at any time up to 30 days following the closing of the offering, to purchase up to an additional 1,215,000 common shares at the issue price.
Cobalt 27 will use the net proceeds from the offering to purchase up to 720 metric tonnes of physical cobalt currently under option for a total purchase price of approximately $58-million (U.S.) (approximately $75-million), representing an average price of $36.39 (U.S.) per pound of cobalt, a 10-per-cent premium to the cobalt high-grade metal bulletin ask price of $33 (U.S.) per pound on Dec. 6, 2017. 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 capitalize on streaming investment opportunities in 2018.
The common shares will be issued pursuant to a prospectus supplement that will be filed with securities regulatory authorities in all provinces and territories of Canada (excluding Quebec) under the company’s base-shelf prospectus dated Oct. 17, 2017, and may also be offered by way of private placement into the United States pursuant to Rule 144A. Closing of the offering is subject to customary regulatory and stock exchange approvals and is anticipated to occur on or about Dec. 19, 2017.
About Cobalt 27 Capital Corp.
Cobalt 27 Capital is a minerals company that offers pure play exposure to cobalt, an integral element in key technologies of the electric vehicle and battery energy storage markets. The company owns over 2.16 million tonnes of physical cobalt and manages a portfolio of seven cobalt royalties. The company intends to continue investing in a cobalt-focused portfolio of streams, royalties and direct interests in mineral properties containing cobalt, while potentially adding to its cobalt physical holdings when opportunities arise.
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