First Cobalt Corp. [FCC-TSXV, ASX; FTSSF-OTCQB], a company that is backed by Swiss commodities trader Glencore AG, said Friday January 31 that it has increased the size of a previously announced non-brokered private placement to accommodate demand. It said the offering has been increased to 14.3 million units at 14 cents each for gross proceeds of $2 million.
First Cobalt is the largest land owner in the historic Cobalt, Ontario region. The company controls over 10,000 hectares of prospective land and 50 historic mines as well as a mill and a facility that it has described as the only permitted cobalt refinery in North America capable of producing battery metals.
Its Kerr Lake area properties include the past producing Juno, Drummond, Kerr Lake, Lawson and Conisil mines, all of which operated primarily as silver mines.
Glencore AG recently agreed provide a US$5 million loan to fund the recommissioning of the companyâ€™s Ontario cobalt refinery, which could produce over 25,000 tonnes of cobalt sulphate annually from third party feed, First Cobalt has said.
Upon completion of a positive definitive feasibility study for a 55-tonnes-per day refinery expansion in the first quarter of 2020, and subject other terms and conditions, Glencore is prepared to advance an additional US$40 million to recommission and expand the refinery, said First Cobalt in an August 26, 2019 press release.
Meanwhile, under the terms of the upsized offering, each unit will consist of one common share of First Cobalt and one common share purchase warrant. Each warrant will entitle the holder to purchase one additional common share at 21 cents for a period of two years.
Proceeds of the offering will be used by the company to fund the advancement of the refinery as well as for general corporate purposes.
On Friday, First Cobalt shares rose 3.6% or $0.005 to 14.5 cents. The shares are currently trading in a 52-week range of 12 cents to 25 cents.
The warrants are subject to accelerated expiry if the closing price of the common shares is equal to or greater than 37 cents per share for a period of 10 consecutive days. In that case, the company will have the option, but not the obligation to accelerate the expiry to 20 calendar days from the date of notice.
First Cobalt enhanced its position as a pure-play North American cobalt company by acquiring all of the issued and outstanding shares of US Cobalt Inc. [USCO-TSXV; USCFF-OTCQB]. The acquisition positioned First Cobalt as a leading non-Democratic Republic of Congo (DRC) cobalt company with North American projects located in close proximity to infrastructure as well as electric vehicle and technology hubs such as Michigan and California.
The combined entity has projects in Ontario, and Idaho, which, once they reach the production stage, could be major cobalt suppliers for the electric vehicle market, which now depend mostly on supply from the DRC.
First Cobaltâ€™s main cobalt exploration project is the Iron Creek cobalt project in Idaho. Iron Creek has an Indicated Resource of 2.2 million tonnes of 0.32% cobalt equivalent (0.26% cobalt and 0.61% copper, containing 12.3 million pounds of contained cobalt and 29 million pounds of copper.
On top of that is an Inferred Resource of 2.7 million tonnes at 0.28% cobalt equivalent (0.22% cobalt and 0.68% copper) containing 12.7 million pounds of contained cobalt and 40 million pounds of copper.