First Cobalt secured a $45-million debt and brokered equity financing for the construction of refinery

First Cobalt financing the construction of refinery

First Cobalt Corp. is proud to inform that it has achieved a joint secured convertible debt and brokered equity financing deal of roughly $45 million to help fund the building of its hydrometallurgical refinery in Ontario, Canada. The Note and Equity Offerings will take the place of the debt financing procedure that the Company reported on March 31, 2021.

Cantor Fitzgerald & Co led a $37.5 million principal balance of 6.95% senior secured convertible notes payable December 1, 2026 offering, and BMO Capital Markets led an immediately public offering of common shares for net revenues of C$9.5 million.

The funding conditions and limitations specified are preferable to the debt financing the Company was originally considering, according to the Company’s management and board of directors.

Following the conclusion of this transaction, the Company will move forward with talks on a non-dilutive working capital arrangement to meet a minimum liquidity demand of US$5 million, as well as cobalt hydroxide feed acquisitions until cobalt sulfate is sold to market. Holders of Notes (Noteholders) will have the opportunity to demand for the Company to release a pro rata sum of an extra US$7.5 million principal amount of Notes, issued at par, for a period of 60 days.

Note Offering and Equity Offering

For the Note Offering, that is being done on a private placement arrangement, the Company hired CF&Co to act as the exclusive placement manager. The Note Offering comprises of US$37.5 million in principal amount of 6.95% convertible senior secured notes due December 1, 2026, with an option to extend the principal amount.

The Notes, along with any additional Notes, will carry an annual interest rate of 6.95%, payable in cash semi-annually in instalments in February and August of every year, and will expire on December 1, 2026. BMO Capital Markets will act as the sole agent for the equity offering. The Company plans to engage into an agency arrangement with the Agent in accordance with the Equity Offering.

The Equity Offering is set to end on or around September 1, 2021, subject to normal closing circumstances, such as receipt of all required regulatory approvals, along with the TSXV’s permission. The closure of the Equity Offering is also contingent on the Note Offering being completed.

In connection with the financing package, the Company informed Cantor Fitzgerald Canada Corporation (‘CFCC’) on August 23, 2021 of its decision to discontinue its at-the-market offering program (the ‘ATM Program’), which will take effect on September 2, 2021. On February 22, 2021, the ATM Program was created, allowing the Company to issue Common Shares with a value of up to C$10 million from treasury to the public at its disposal.

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