First Cobalt (TSX-V:FCC, OTCQX:FTSSF) Corp said it has received notice of the full exercise of a US$7.5 million option by investors in its recently completed offering of 6.95% senior secured convertible notes due December 1, 2026.
The battery materials producer said it plans to use the net proceeds of the option exercise for capital expenditures associated with the expansion and recommissioning of its wholly-owned hydrometallurgical refinery in Ontario, including buildings, equipment, infrastructure, and other direct costs, as well as engineering and project management costs.
READ: First Cobalt granted second key permit for its North American battery materials refinery
Under subscription agreements entered into between First Cobalt and the investors in August, each investor had the right to subscribe for additional notes, pro rata, for an aggregate additional principal amount of up to US$7.5 million. The notes are expected to be issued on October 22.
"We are happy to have the continued support from the noteholders,” chief financial officer Ryan Snyder said in a statement.
“This is a great vote of confidence in the team's ability to create long-term shareholder value as we continue to move our refinery project forward toward commissioning, set for 4Q 2022; at which point we'll be North America's only source of high-quality, sustainable and traceable battery grade cobalt sulfate.”
First Cobalt's mission is to be a sustainable producer of battery materials. It owns a permitted North American hydrometallurgical refinery, a critical asset in the manufacturing of batteries for electric vehicles. First Cobalt also owns the Iron Creek cobalt-copper project in Idaho, US as well as cobalt and silver properties in the Canadian Cobalt Camp.
Contact the author at stephen.gunnion@proactiveinvestors.com