Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) has received strong validation of its cobalt strategy incorporating downstream value-adding by way of a strongly supported capital raising that has boosted its finances by more than A$22 million.
The capital raising included a private placement, a 1 for 10 non-renounceable entitlement issue and a shortfall placement.
“Continued commitment”
CEO & executive director Joe Kaderavek said: “We’ve been delighted with the strong support from shareholders demonstrating their continued commitment to the company.”
The entitlement issue closed on December 1, 2022, with the company receiving applications for 28,123,088 new shares with a value of A$16,311,391.
With the maximum number of new shares that could be issued under this offer amounting to 33,040,534, taking into account ineligible foreign shareholders, the entitlement issue shortfall amounted to 4,917,442 shares, or A$2,852,116.
A sophisticated investor has taken up most of this shortfall and the company will issue 3,448,276 new shares to raise A$2 million.
Strong take-up
“The entitlement issue and shortfall placement represent 95% of the maximum amount available for issue,” Kaderavek said.
These initiatives follow a private placement last month that raisedA $4 million, before costs, with both having an issue price of A$0.58 per share.
The total funds raised under the placement, entitlement issue and shortfall placement will be A$22,311,391.
COB expects to issue new shares under the entitlement offer on December 7, 2022, and will also issue the shortfall placement shares on that date.
The expected date of commencement of trading of new shares under the entitlement issue and shortfall placement is December 8, 2022.
Use of proceeds
The company intends to use the capital-raising proceeds together with existing cash resources to advance activities through to the second half of 2023 in parallel with work on completing the definitive feasibility study (DFS) on the Broken Hill Cobalt Project (BHCP) in Far West New South Wales.
In addition to the DFS, the work will include:
- Initiation of Front-End Engineering Design (FEED) studies, to be executed post-delivery of DFS.
- BHCP Demonstration Plant maintenance and retention of operations staff beyond BHCP DFS test-work, which is likely to finish in Q1 2023, in order to retain a core of well-trained operators on staff through to commissioning of the BHCP (anticipated 2025).
- Cobalt in Waste Streams opportunities where current test-work is expected to be expanded, potentially requiring larger scale test-work at the existing Demonstration Plant in Broken Hill.
- Selective local commercial/industrial property purchases required to support future BHCP operations.
- General corporate activities including partner selection and project financing investigations.