Perth cobalt explorer in Canadian takeover

A Canadian company has entered into an agreement to acquire Perth-based Cobalt One under an all-scrip deal that values the target at about $63 million.

Shareholders in Cobalt One, formerly known as Equator Resources, will receive 0.145 First Cobalt shares for every share they own, equivalent to 11 cents per share.

The tie-up would create a pure-play cobalt exploration company focused in Canada with a market cap of about $140 million.

The combined company’s board will include Cobalt One chairman Paul Matysek and executive director Jason Bontempo.

“This proposal represents an attractive opportunity for Cobalt One to expand and allow shareholders to benefit from being part of a larger company that is expected to have greater liquidity and access to capital from two of the world’s leading capital markets,” Mr Bontempo said.

“Cobalt One shareholders would have a meaningful position in the merged company.”

First Cobalt chief executive Trent Mell said he looked forward to welcoming the Cobalt One representatives onto the board.

“By creating what we believe to be the largest cobalt exploration company in the world, the new company will provide strong leverage to the growth of the electric vehicle market,” he said.

Cobalt One has been advised by Gilbert + Tobin in Australia while First Cobalt's advisers include Canaccord Genuity and jackson McDonald. 

The merged company would be listed on the ASX, the TSXV and the QTCQB.