Jervois Mining kicks off raise ahead of second cobalt merger
Jervois Mining kicks off an equity raise ahead of its merger with eCobalt next month and following its first completed merger with M2 Cobalt.
Australian battery minerals developer Jervois Mining (ASX: JRV) has launched a $15 million equity raising ahead of its merger with eCobalt Solutions Inc, which is set to make it the world’s third largest cobalt miner.
The company’s shares have been placed in a trading halt, pending an announcement.
BW Equities was seeking bids for 75 million new shares at $0.20 each to raise the $15 million by Wednesday morning.
Terms sent to potential investors priced the raising at an 8.1% premium to the last close and at a 10.3% discount to the 10-day volume weighted average price.
Funds are expected to be used to recapitalise the company following last week’s completed merger with M2 Cobalt and its upcoming merger with eCobalt, anticipated for completion in late July.
BW Equities was reportedly calling for bids into the placement by midday on Thursday, with the placement remaining conditional on completion of the eCobalt merger.
ECobalt merger
In April, Jervois announced its intentions to acquire 100% of TSX-listed Canadian advance-stage development company eCobalt in an at-market merger.
The deal is currently in progress and is expected to complete late next month.
The move will see Jervois take on a global asset pipeline including eCobalt’s flagship Idaho cobalt project, believed to be the only near-term, environmentally-permitted primary cobalt deposit in the United States.
It follows Jervois’ merger with M2 Cobalt, which was completed last week.
When this second merger goes through, Jervois will be a US$100 million company and the third largest cobalt company in the world.
M2 Cobalt merger
Last week, shareholders gave the go-ahead for Jervois to merge with TSX-listed M2 Cobalt. This deal was part of a bigger plan for Jervois to get its hands on the historic Kilembe copper-gold mine and other exploration landholdings in Uganda.
M2 Cobalt has already firmed up multiple drill targets at Kilembe and other projects in the region, which are prospective for nickel, copper, cobalt and gold.
Earlier this week, Jervois announced it was progressing exploration on the Ugandan prospects with a work program including ground geophysics and infill sampling at Kilembe and Bujagali.
Drilling is also underway at the Bujagali project, targeting the Bombo nickel, copper, cobalt and Waragi copper and cobalt anomalies. Jervois said drilling results are expected in the third quarter.
Following the M2 Cobalt merger, Jervois also appears to be in a strong position to obtain a prospecting licence over the giant Kabanga nickel-copper project in Tanzania.
This project has a current JORC resource of 57 million tonnes at 2.62% nickel, 0.2% cobalt and 0.35% copper with significant regional exploration potential.
Jervois believes having both projects in its asset portfolio would be “transformational” for the company and said having a base in Uganda (through the M2 Cobalt merger) provides good regional access to help support Kabanga.
Board capability
Jervois is backed by a strong board largely made up of directors with former Glencore and X-Strata roles under their belts.
Jervois chairman Peter Johnston used to be Glencore International’s head of global nickel assets and sat on its executive management committee.
Other non-executive directors Brian Kennedy and Michael Rodriguez also worked for Glencore.
Jervois chief executive officer Bryce Crocker (ex-X-Strata) said “junior companies are not typically organisationally-setup to execute projects.”
“With our board and our contingent being largely ex-Xstrata and Glencore, we are set up to focus on getting into production, generating cashflow and differentiating ourselves in the market as fast as we can,” he said.