Cobalt Blue Holdings Ltd (ASX:COB) (OTCMKTS:CBBHF) (FRA:COH) has received strong validation for its cobalt Global Sample Partner Program by raising A$15 million in a private placement to institutional, sophisticated and professional investors.
Firm commitments have been received for the two-tranche placement which was well supported by a number of domestic and offshore institutional investors.
Fully funded for Demonstration Plant
Proceeds will be used to accelerate construction of a demonstration plant, which will follow the pilot plant sample program that is nearing completion.
The company is now fully funded to complete the construction of this larger plant to provide battery-grade cobalt sulphate to end-users and potential strategic partners.
These plants are both key parts of the company’s sample program centred on the Broken Hill Cobalt Project (BHCP) in Far West New South Wales.
“Strongly supported”
COB’s chief executive officer Joe Kaderavek said: “We welcome a number of highly regarded domestic and international institutional investors onto the Cobalt Blue register in what was a strongly supported capital raising that will fund the continued development of the Broken Hill Cobalt Project.”
The company expects to complete the entire pilot plant sample program over the next weeks and will report a program summary upon completion and the overall specifications of the Global Sample Partner Program.
Transition to larger plant
This placement will permit COB to transition to a larger-scale Demonstration Plant in Broken Hill and advance feasibility studies for the BHCP.
Proceeds will also be used to fund geological and site activities, approvals and permits, additional tenement acquisition, partner and financing investigations and working capital.
There will be 50 million new fully-paid ordinary shares issued at A$0.30 per share, including 25 million free attaching options exercisable at $0.45 each on or before August 15, 2022, on the basis of one option for every two placement shares issued.
Two tranches
The placement has two tranches:
- In the first tranche, COB will issue 25.9 million new shares and 12.95 million unquoted options, under its current placement capacity pursuant to ASX Listing Rule 7.1 and 7.1A, to raise approximately A$7.8 million before costs. Settlement of Tranche 1 is expected to occur on or around June 18, 2021.
- In the second tranche, COB will issue 24.1 million new shares and 12.05 million unquoted options, to raise approximately A$7.2 million before costs, subject to shareholder approval at a general meeting of shareholders which is expected to be held in early August 2021.
Shares issued under the placement will be fully paid ordinary shares in the company and will rank equally with shares currently on issue.
If all of the options are ultimately exercised, the company will raise a further A$11.25 million, which will be directed towards project development and general working capital purposes.
Blue Ocean Equities Pty Ltd and Canaccord Genuity acted as joint lead managers and bookrunners to the placement.