First Cobalt Corp. [FCC-TSXV; FTSSF-OTCQX] has closed its previously announced debt and equity financing for aggregate gross proceeds of approximately US$45-million. The financing consisted of a private placement offering to United States investors of US$37.5-million principal amount of 6.95% senior secured convertible notes due December 1, 2026, led by Cantor Fitzgerald & Co., as sole placement agent; and an overnight-marketed public offering led by BMO Capital Markets, as sole agent, of 38.15 million common shares of the company at a price of 25 cents per common share for total gross proceeds of over $9.5-million (approximately US$7.5-million).
The notes are convertible into common shares at an initial conversion rate of 4,058.24 common shares per US$1,000 principal amount of notes, subject to certain adjustments set forth in the indenture governing the notes.
“With the completion of this financing, the First Cobalt project team can now accelerate long lead equipment orders for our Canadian battery materials refinery as we pursue our vision of becoming the most sustainable producer of battery materials,” said president and CEO of First Cobalt, Trent Mell.
“Our immediate objective is to become the only producer of battery-grade cobalt in North America by Q4 2022. Thereafter, we intend to produce nickel, cobalt, lithium and other battery materials from recycled lithium-ion batteries. Longer term, we are pursuing the creation of a battery park around our low-carbon hydrometallurgical refinery, which would include nickel sulfate production from primary feeds and lithium-ion battery precursor manufacturing.”
The company intends to use the aggregate net proceeds of the offering for capital expenditures associated with the expansion and recommissioning of its wholly owned hydrometallurgical refinery located in Ontario, Canada, including buildings, equipment, infrastructure and other direct costs, as well as engineering and project management costs.
CIBC World Markets Inc. acted as financial advisers to the company with respect to the company’s refinery construction financing strategy. Concurrently with the closing of the equity offering and the note offering, the termination of the company’s at-the-market offering program became effective as of September 2, 2021.
In 2022, the company plans to commission North America’s only cobalt sulfate refinery, a critical asset in the development and manufacturing of batteries for electric vehicles. First Cobalt also owns the Iron Creek cobalt-copper project in Idaho, U.S., as well as several significant cobalt and silver properties in the Canadian cobalt camp.