TSX Venture: KBLT
OTCQX:
CBLLF
FRA: 27O
TORONTO, May 6, 2019 /CNW/ - Cobalt 27 Capital
Corp. ("Cobalt 27" or the "Company") (TSXV:
KBLT)(OTCQX: CBLLF)(FRA: 27O), a leading
battery metals investment vehicle offering exposure to cobalt and
nickel, is pleased to announce the National Court of Papua New Guinea approved the scheme of
arrangement (the "Scheme") on May 2,
2019, under which Cobalt 27 will acquire all the issued
share capital of Highlands Pacific
Limited ("Highlands"). Shares of Highlands have been
suspended from trading on both the Australian Securities Exchange
(ASX) and the Port Moresby Stock Exchange (POMSoX) effective
May 3, 2019, pending completion of
the Scheme.
"We are pleased to receive the approval of the National Court of
Papua New Guinea and look forward
to completing the acquisition of Highlands. We are also
pleased to announce an amendment to our previously announced credit
facility which will provide Cobalt 27 with a reduction in stand-by
fees and enhanced flexibility including the ability to increase the
facility for the right cash-flowing acquisition opportunity from
our extensive pipeline of investment opportunities. The
facility is an endorsement of our acquisition of Highlands which
further diversifies Cobalt 27's asset base and commodity
exposure. We look forward to working with majority owner and
operator Metallurgical Corporation of China, as well as the Government and
Stakeholders of Papua New Guinea,"
said Anthony Milewski, Chairman and
CEO, Cobalt 27.
Amended Credit Facility
Cobalt 27 announces
that it has entered into an amended and restated revolving term
credit facility (the "Amended Credit Facility"), whereby the
Company will have access to a US$100
million credit facility and a US$50
million accordion facility which replaces its undrawn credit
facility announced on October 24,
2018. National Bank of Canada, Bank of Montreal and The Bank of Nova Scotia acted as Joint-Lead Arrangers with
National Bank of Canada acting as
Sole Bookrunner and Administrative Agent. The Amended Credit
Facility is secured by the Company's assets, including its physical
cobalt inventory, its streaming and royalty investments, and the
ordinary shares of Highlands to be acquired under the Scheme.
The Amended Credit Facility has an initial term of three
years, which is extendable by mutual consent of the lenders and
Cobalt 27. An initial drawdown under the Amended Credit
Facility will be subject to the satisfaction or waiver of certain
conditions precedent customary for a financing of this type.
Following the closing of the Highlands acquisition and the
anticipated PanAust buyback agreement, the Company expects to have
drawn approximately US$40 million
under the facility, paying interest quarterly currently at a rate
of LIBOR plus 375 basis points.
Highlands Scheme of Arrangement
Under the
Scheme, Cobalt 27 will acquire all of the issued and outstanding
ordinary shares of Highlands that it does not already own (the
"Scheme Shares") for an all-cash offer price of A$0.105 per share (the "Base Purchase
Price"). In addition, if before December 31, 2019, the London Metal Exchange
official closing cash settlement price for nickel is US$13,220 per tonne or higher for a period of 5
consecutive trading days, Cobalt 27 will also pay additional
contingent consideration of A$0.010
per Scheme Share in cash (the "Contingent Purchase Price"). The
Base Purchase Price consideration offered for all of the Scheme
Shares is valued at approximately US$65
million, which is anticipated to be funded with cash on hand
and available credit under the Amended Credit Facility. The
Contingent Purchase Price consideration of US$6 million will be funded in escrow and funded
with available credit. The transaction is expected to close
on or about May 17, 2019.
About Highlands Pacific
Highlands is a mining
and exploration company listed on the Australian Stock Exchange and
the Port Moresby Stock Exchange in PNG. Highlands' primary
assets include an 8.56% interest in the producing Ramu mine and a
20% interest in Frieda River Copper-Gold Project, both located in
PNG. Highlands also holds the Star Mountains Copper Gold
exploration project in PNG and has exploration tenements on
Normanby Island (Sewa Bay).
About Cobalt 27 Capital Corp.
Cobalt 27
Capital Corp. is a leading battery metals streaming company
offering exposure to metals integral to key technologies of the
electric vehicle and energy storage markets. The Company owns
physical cobalt and a 32.6% Cobalt Stream on Vale's world-class
Voisey's Bay mine, beginning in 2021. Cobalt 27 is
undertaking a friendly acquisition of Highlands Pacific which is
expected to add increased attributable nickel and cobalt production
from the long-life, world-class Ramu Mine. The Company also
manages a portfolio of 11 royalties and intends to continue to
invest in a cobalt and nickel focused portfolio of streams,
royalties and direct interests in mineral properties containing
battery metals.
For further information please visit the Company website at
www.cobalt27.com or contact:
Betty Joy LeBlanc, BA, MBA
Director, Corporate Communications
+1-604-828-0999
betty@cobalt27.com
Forward-Looking Information
This news
release contains certain information which constitutes
'forward-looking statements' and 'forward-looking information'
within the meaning of applicable Canadian securities laws.
Forward-looking statements in this news release include, without
limitation: statements pertaining to the anticipated completion of
the Scheme, the PanAust buyback agreement, and the respective
timing of each; and statements pertaining to the timing and amounts
of cash consideration related to the acquisition of Highlands.
Forward-looking statements involve known and unknown risks
and uncertainties, most of which are beyond the Company's control.
For more details on these and other risk factors see the Company's
most recent Annual Information Form on file with Canadian
securities regulatory authorities on SEDAR at www.sedar.com under
the heading "Risk Factors". Should one or more of the risks or
uncertainties underlying these forward-looking statements
materialize, or should assumptions underlying the forward-looking
statements prove incorrect, actual results, performance or
achievements could vary materially from those expressed or implied
by the forward-looking statements. Accordingly, undue reliance
should not be placed on these forward-looking statements.
The forward-looking statements contained herein are made as
of the date of this release and, other than as required by
applicable securities laws, the Company does not assume any
obligation to update or revise it to reflect new events or
circumstances. The forward-looking statements contained in this
release are expressly qualified by this cautionary
statement.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release. No securities regulatory authority has
either approved or disapproved of the contents of this news
release.
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SOURCE Cobalt 27 Capital Corp