A Toronto-based cobalt hunter wants to expand its holdings beyond northeastern Ontario and into Idaho.
First Cobalt announced March 14 it has entered into a definitive agreement to acquire all of the issued and outstanding shares of US Cobalt. It’s being termed a “friendly acquisition.”
In their sights is the Iron Creek Cobalt Project in Idaho with a historic mineral resource estimate (non-compliant with NI 43-101) of 1.3 million tons grading 0.59 per cent cobalt.
If completed, the proposed $149.9-million deal creates a combined company owned 62.5 per cent by First Cobalt shareholders and 37.5 per cent by US Cobalt shareholders.
Approval of the transaction requires two-thirds of the votes cast by US Cobalt shareholders at an upcoming shareholders meeting sometime in May. The deal is expected to close later that month.
First Cobalt has agreed to appoint a US Cobalt nominee to its board of directors at the closing of the transaction.
In a news release, First Cobalt said the Iron Creek project is advanced with “excellent near-term resource potential.”
Iron Creek, located in Lemhi County, Idaho, is considered among most prolific belts of cobalt mineralization in the States. There’s an exploration and mining history with about 30,000 feet of diamond drilling and the 1,500 feet of underground workings.
In Ontario, First Cobalt already has about 100 square kilometres of prospective property – roughly 10,000 hectares – in and around the town of Cobalt, with 50 historic silver mines in its possession.
Cobalt was a largely discarded waste by-product during the silver boom at the turn of the last century.
First Cobalt also owns a permitted refinery in the area, capable of producing lithium-ion battery-grade material for the electric vehicle and electronics markets.
The company, which began exploration drilling in the northeastern Ontario camp last year, is out to heighten its international position as a major cobalt producer not operating in the Congo.
In a statement, First Cobalt said having resource properties in Northern Ontario and Idaho puts them closer to electric vehicle and technology hubs in Michigan and California.
“We foresee a shortage of cobalt over the next five years yet there are few companies doing significant work to identify new sources of supply,” said First Cobalt president-CEO Trent Mell in a statement.
“This transaction creates a larger platform to discover and develop cobalt projects for the growing electric vehicle market by combining high quality North American assets in two of the best cobalt jurisdictions outside the DRC. US Cobalt’s Idaho project complements our Canadian Cobalt Camp properties, offering upside potential for shareholders of both companies.
"We view the First Cobalt Refinery as a strategic asset as it is the only permitted cobalt refinery in North America capable of producing battery materials. We look forward to working with the US Cobalt technical team as they complete drilling in support of a maiden mineral resource estimate expected later in 2018.”
