First Cobalt Proposes Friendly Merger with Cobalt One

First Cobalt Proposes Friendly Merger with Cobalt One

TORONTO, ON — (June 21, 2017) – First Cobalt Corp. (TSX-V: FCC, OTC: FTSSF) (the “Company”) is pleased to announce it has delivered a proposal to Cobalt One Ltd., which is listed on the Australian Securities Exchange, for the merger of Cobalt One and First Cobalt. Under the proposal, First Cobalt would acquire all of the outstanding common shares of Cobalt One which would result in the shareholders of Cobalt One holding approximately 60% of the equity in the merged entity and the shareholders of First Cobalt holding the remaining 40%.

If concluded, this merger would consolidate the two largest land packages in the Cobalt camp into a single landholder with over 10,000 hectares (Figure 1). First Cobalt would also become 100% owner of the Yukon refinery, previously a joint venture option between the two companies.

The proposal delivered to Cobalt One includes the following elements:

  • Cobalt One shareholders would own 60% of the merged entity and First Cobalt shareholders would own the remaining 40%, prior to giving effect to any subsequent equity issuances by either company;
    • The merged entity would be based in Toronto, a five-hour drive from the Cobalt mining camp;
    • First Cobalt would maintain its TSXV listing and seek to obtain a secondary listing on the ASX of CHESS Depositary Interests; and
    • It would be a condition of the transaction that the Board of Directors of the merged entity would include Cobalt One Chairman Paul Matysek, Cobalt One CEO Jason Bontempo as well as Bob Cross and some or all of the current First Cobalt Board members.

Trent Mell, President and CEO commented,

“First Cobalt previously concluded a partnership with Cobalt One on the Yukon refinery near Cobalt, Ontario and we shared a common vision for the Cobalt Ontario camp. Both companies believe that a rebirth of this historic mining district will occur through the application of modern geoscience, a better understanding of disseminated cobalt mineralization and ultimately, bulk mining methods. A consolidation of properties, the refinery and the permitted property upon which the refinery is situated offer the potential to significantly shorten the pathway to production. This transaction will benefit shareholders in both companies, while creating one of the largest cobalt exploration companies in the world.”

Cobalt One’s properties are in Canada, adjacent to First Cobalt’s properties, making First Cobalt’s Canadian-based management team (with their experience in this region) the ideal choice to manage the merged entity. Consolidating the land package could facilitate new discoveries in this camp, which is unique for its cobalt-silver mineralization, and provide meaningful future cobalt production in a politically stable, mining-friendly jurisdiction. The refinery is a unique asset in this area and the permitted facility could meaningfully accelerate permitting of a future mining and processing operation. First Cobalt also believes Cobalt One is an attractive counterparty due to its Australian Securities Exchange listing and strong institutional shareholder support in that market.

First Cobalt has engaged Canaccord Genuity Corp., Toronto, as financial advisors and Cassels Brock and Blackwell, LLP, Vancouver, as legal advisors on any transactions entered into by the Company. 

About Cobalt One

Cobalt One Ltd. is an ASX-listed exploration company focused on cobalt. The company holds a significant land package of 7,272 hectares in the Cobalt region of Ontario Canada. Many of Cobalt One’s holdings are adjacent to those of First Cobalt. Cobalt One currently owns the Yukon refinery, located in the Cobalt camp. 

 

Figure 1 – First Cobalt and Cobalt One land packages in Cobalt camp, Ontario

Readers are cautioned that the proposal provided to Cobalt One is non-binding, and that completion of any transaction is subject to a number of conditions, including but not limited to, completion of due diligence, negotiation of definitive agreements in respect of the transaction, and receipt of any required Board, regulatory and shareholder approvals. A transaction cannot be completed until these conditions are satisfied. There can be no assurance that any transaction will be completed as proposed or at all.

About First Cobalt

First Cobalt is focused on building a diversified global portfolio of assets that are highly leveraged to the cobalt market. The Company’s current assets include almost 3,000 hectares and three former mines in the Cobalt camp in Ontario, Canada. Cornerstone assets include an option for the former producing Keeley-Frontier mine, a high-grade mine that produced over 3.3 million pounds of cobalt and 19.1 million ounces of silver from 301,000 tonnes of ore, as well as a joint venture on a fully permitted cobalt refinery in Cobalt, Ontario.  The Company also has interests in seven prospective copper-cobalt properties covering 190 square kilometres in the Democratic Republic of the Congo, all with known surface mineralization.

On behalf of First Cobalt Corp.

Trent Mell
President & Chief Executive Officer

For more information visit www.firstcobalt.com or contact:

Heather Smiles

Investor Relations

info@firstcobalt.com

+1.416.900.3891

 

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Statements

This news release may contain forward-looking statements and forward-looking information (together, "forward-looking statements") within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as "plans", "expects', "estimates", "intends", "anticipates", "believes" or variations of such words, or statements that certain actions, events or results "may", "could", "would", "might", "occur" or "be achieved" and include all statements related to the possibility of a merger between Cobalt One and First Cobalt. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance and opportunities to differ materially from those implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include the reliability of the historical data referenced in this press release and risks set out in First Cobalt’s public documents, including in each management discussion and analysis, filed on SEDAR at www.sedar.com. Although First Cobalt believes that the information and assumptions used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, First Cobalt disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.



 

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First Cobalt Proposes Friendly Merger with Cobalt One