M2 Cobalt to merge with Australia's Jervois Mining to boost East African operations

M2 Cobalt Corp (CSE:MC) (OTCMKTS:MCCBF) and Jervois Mining Limited (ASX:JRV) announced on Tuesday that they plan to merge in an at-market transaction. 

According to the proposed agreement, Jervois will acquire all of the issued and outstanding common shares of M2 Cobalt.

The merger will lead to an “enlarged company with greater scale, liquidity and diversification with significant re-rating potential,” according to a statement from both companies. 

READ: M2 Cobalt awaiting results from first phase drilling work in Uganda

M2 Cobalt focuses on discovering and developing world-class cobalt assets in Uganda, East Africa. It will provide an existing platform and presence in Uganda for opportunities at the Kilembe copper-cobalt mine and Kasese cobalt refinery and will complement Jervois’ East African ambitions.

Jervois is expected to enter the North American capital markets via a TSX Venture Exchange listing. 

Each common share of M2 Cobalt will be exchanged for one common share of Jervois, with an offer price of C$0.262 based on the closing price of Jervois’ common shares on the Australian Stock Exchange on January 21, 2019, and C$0.247 based on the 10-day volume weighted average price.

Upon completion deal, ownership of the enlarged company will be 77.9% existing Jervois shareholders, and 22.1% M2 Cobalt existing shareholders.

“Jervois has reviewed a significant number of investment opportunities in cobalt globally and is enthusiastic regarding the exploration potential of M2 Cobalt’s portfolio of tenements,” said the company in a statement. “Uganda has a continuation of geological trends from neighbouring Democratic Republic of Congo, as well as a history of copper/cobalt production, but with greater political and regulatory stability.”

–Contact Katie Lewis @[email protected]

Story by ProactiveInvestors