In a sign that the Cobalt, Ontario energy metals camp is ramping up in intensity, First Cobalt (FCC.V) will acquire all issued and outstanding shares in Cobaltech (CSK.V) to create an area dominating pure play cobalt exploration deal with a mill and property that contains 14 past producing mines in the area.
The deal will be priced at the equivalent of $0.20 a share for Cobaltech owners, a premium of 42% over the stock price prior to the announcement, and 17% up from the price today.
Cobaltech shareholders will still have to approve the deal, but that shouldn’t be a tough call considering the mark-up, and that the merged entity will be far stronger and more liquid in the marketplace.
Let’s get to the executive quote portion of the day:
“First Cobalt has a strong vision for the future of this region and this transaction will be beneficial to both to CobalTech shareholders and the community. We are pleased to have come to financial terms with First Cobalt and look forward to finalizing this transaction.” — Cobaltech CEO Bruce Bragagnolo
“We believe CobalTech’s assets at the north end of the Cobalt camp are complementary to our asset base at the south end of the camp, approximately 25 kilometres away. With an asset base consisting of 11 past-producing mines and a mill facility, CobalTech has assembled an excellent asset base in this historic mining district.” — First Cobalt President and CEO Trent Mell
The deal becomes even better for Cobaltech owners when you factor in that First Cobalt is in the midst of merger talks with the Paul Matysek/Bob Cross helmed Cobalt One (CO1:ASX).
Both Cobaltech and First Cobalt are Equity.Guru marketing clients, so we’ve talked to both ends of this deal extensively.
First Cobalt stocks is halted at the time of writing, but Cobaltech shares have been pushing upwards since the announcement was made.
— Chris Parry
FULL DISCLOSURE: The authors owns stock in both FCC and CSK, and both companies are Equity.Guru marketing clients.