Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) is eyeing off funds of up to $6.08 million, before costs, in a pro-rata non-renounceable rights issue of one new share for every five shares at $0.072 per share.
The entitlement issue opens on Tuesday, November 26, 2024, and is expected to close on Thursday, December 12, 2024, with the price representing a 10% discount to the closing price of $0.08 on November 15, 2024, and between 20-23% to the 10 and 15-day VWAP, respectively as of that date.
Use of funds
Cobalt Blue intends to use the proceeds from the entitlement issue together with existing cash resources to fund the following:
- Kwinana Cobalt Refinery (KCR) work programs – including the KCR engineering program (delivered by Tetra Tech (NASDAQ:TTEK)), permitting/approvals, financing, offtake/feedstock programs, as well as legal support work;
- Broken Hill Cobalt Project (BHCP) strategic review studies;
- ReMine+ opportunities, including desktop studies and/or test work at the Broken Hill Technology Development Centre; and
- General corporate activities.
The company will use its existing cash balance plus R&D tax rebate funds of $2.3 million, which are expected this quarter, to service the debt obligations related to the outstanding promissory note.
READ: Cobalt Blue welcomes Tasmania’s sustainable mining initiative
Eligible shareholders
All shareholders on the company's share register at the record date and whose registered address is in Australia and New Zealand will be entitled to participate in the entitlement issue.
This issue will allow eligible shareholders to take up new shares proportional to their shareholding and mitigate the effect of dilution and eligible shareholders can choose to take up all, part or none of their entitlement.
Those who do not take up their entitlement in whole or in part will not receive any value in respect of those entitlements not taken up.
Issue details
The entitlement is non-renounceable and cannot be traded on ASX or any other exchange, nor can it be privately transferred.
Settlement of the new shares issued under the entitlement issue is expected to occur on Wednesday, December 16, 2024.
New shares issued under the entitlement issue will rank equally with the existing shares then on issue.
The entitlement issue is not underwritten and Blue Ocean Equities Pty Ltd has been appointed as lead manager to the issue.
Further details of the entitlement issue will be provided to eligible shareholders in the offer booklet, which is expected to be despatched or made available to shareholders on Tuesday, November 26, 2024.