First Cobalt Corp. has entered into an agreement to acquire all of the issued and outstanding shares of US Cobalt. Once the transaction is complete, First Cobalt shareholders will own 62.5% and US Cobalt shareholders will own 37.5% of the combined company.

Under the terms of the agreement, all of the US Cobalt issued and outstanding common shares will be exchanged on the basis of 1.5 First Cobalt common shares for each US Cobalt common share issued and outstanding. As part of the transaction, it is expected that all US Cobalt stock options outstanding will be replaced with First Cobalt stock options and be exercisable for First Cobalt shares based on the Exchange Ratio for the remainder of their original term, and all US Cobalt warrants outstanding will participate in the transaction on a comparable basis to holders of US Cobalt common shares based on the in-the-money portion of those securities. This implies a total equity value of approximately $149.9 million.

According to First Cobalt, this transaction positions it as a leading non-Democratic Republic of the Congo cobalt company with North American projects located close to infrastructure as well as electric vehicle and technology hubs such as Michigan and California.

Three significant North America assets included are 50 historic mines across 100 km2 in the Canadian Cobalt Camp in Ontario; the Iron Creek cobalt project in Idaho with a historic mineral resource estimate of 1.3 million tons grading 0.59% cobalt; and the only permitted cobalt refinery in North America capable of producing battery materials.

“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,” Trent Mell, First Cobalt president and CEO said. “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 CEO Wayne Tisdale said, “The transaction offers our shareholders an opportunity to benefit from a larger North American cobalt company with a portfolio of high-quality assets and a strong balance sheet. US Cobalt shareholders will have meaningful ownership in a vertically integrated pure-play cobalt company with a proven and experienced management team that shares our commitment to creating long-term sustainable value.”

The transaction is expected to close by the end of May.