Shareholders give green light for Jervois Mining, M2 Cobalt merger

Shareholders have given the green light for Jervois Mining’s (ASX: JRV) merger with TSXV listed M2 Cobalt to go ahead, giving Jervois a “transformational” foothold in Uganda and the historic Kilembe copper-gold mine.

Subject to securing court approvals and completing customer closing conditions, Jervois will now acquire all of M2 Cobalt’s outstanding shares – issuing M2 Cobalt holders one Jervois share for every M2 Cobalt share held.

Jervois anticipates the transaction will be finalised this week, with the merged entity to trade as JRV on both the ASX and TSXV.

eCobalt acquisition

The merger precedes a separate previously highlighted deal with eCobalt Solutions, which is expected to go through in July.

Jervois and TSX-listed eCobalt have agreed for Jervois to acquire all the shares in eCobalt that values the company at C$0.36 per share.

Under the agreement, eCobalt holders will receive 1.65 Jervois shares for every eCobalt security held.

Combined entity

Once both mergers are complete, Jervois will be the world’s third largest cobalt company with a market cap of US$100 million.

Jervois shareholders will own 40% of the combined entity, with M2 Cobalt holders possessing 11.4% and eCobalt 47%.

The combined entity will own numerous cobalt, nickel, copper and gold assets in Uganda, the US and Australia.

eCobalt brings to the party its wholly-owned Idaho cobalt project in the US with a NI43-101 measured and indicated resource of 3.87 million tonnes at 0.59% cobalt and 0.85% copper. The deposit is open along strike and at depth.

The asset is de-risked with existing surface infrastructure including water, power and haul roads.

Meanwhile, M2 Cobalt contributes its strong established presence in Uganda and several exploration licences along strike of the Kilembe copper-gold mine.

M2 Cobalt has firmed up multiple drill targets at Kilembe and its other projects in the region, which are prospective for copper, gold, nickel and cobalt.

Uganda’s geology is similar to the Democratic Republic of Congo where more than 60% of the world’s cobalt is produced.

According to Jervois, despite Uganda’s stable government, transparent mining code and British-based legal system, the region remains underexplored – particularly for cobalt.

Jervois’ expertise and Kabanga

Running the combined entity will be a highly capable board of ex Glencore and Xstrata executives with decades of experience running exploring, developing and operating nickel, copper and cobalt assets in Australia and Africa.

Jervois expects its expertise will give it an edge in its current bid to secure ownership of the giant Kabanga nickel-cobalt project in Tanzania.

Jervois directors officially met with Tanzania’s new Minister for Minerals the Honourable Doto Biteko to discuss ownership of Kabanga.

Although confidential, Jervois chief executive officer Bryce Crocker told Small Caps he was pleased with the outcome of the company’s discussions with the minister.

Glencore and Barrick Gold previously owned Kabanga and had invested more than US$250 million on advancing the asset before crashing nickel prices caused the project to be mothballed.

The Tanzanian Government cancelled 11 retention licences including Kabanga in early 2018 – putting the project up for grabs.

Kabanga is believed to be one of the world’s most attractive undeveloped nickel sulphide deposits.