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Cobalt 27 Closes Acquisition of Highlands Pacific.

MANews-(C)2009-2019

20 May 2019 - Canada-based metals investment company Cobalt 27 Capital Corp. (TSX Venture: KBLT) (OTCQX: CBLLF) (FRA: 27O) has closed the acquisition of all the issued share capital of Australia-based mining company Highlands Pacific Ltd (ASX: HIG) (POMSoX: HIG), Cobalt 27 said.

Shares of Highlands have been suspended from trading on both the Australian Securities Exchange and the Port Moresby Stock Exchange (POMSoX) effective May 3, 2019, pending completion of the scheme.

Cobalt 27 acquired all of the issued ordinary shares of Highlands that it does not already own for an all-cash offer price of AUD 0.105 per share.

If before December 31, 2019, the London Metal Exchange official closing cash settlement price for nickel is USD 13,220 per ton or higher for a period of five consecutive trading days, Cobalt 27 will also offer a contingent consideration of AUD 0.010 per Scheme Share payable in cash.

Under the terms of the Scheme, Cobalt 27 will acquire all of the issued ordinary shares of Highlands that it does not already own for an all-cash offer price of AUD 0.105 per share.

The base purchase price consideration offered for all of the shares is valued at approximately USD 70m (CDN 96m).

The transaction creates a high-growth, diversified battery metals streaming and royalty company that expands and diversifies its portfolio with increased nickel and cobalt exposure.

Highlands' key asset is its 8.56% interest in the Ramu nickel-cobalt mine located near Madang on the north coast of PNG. Following repayment of Highlands' attributable Ramu construction and development loans, Highlands' ownership would increase to 11.3%.

Cobalt 27 said the acquisition of Highlands will allow Cobalt 27 to gain a direct interest in the Ramu nickel-cobalt mine and materially increase its attributable exposure to the mine's nickel production from 27.5% to 100% and cobalt production from 55% to 100%, relative to the previously announced Ramu Cobalt Nickel Stream.

The Ramu mine was financed and constructed by MCC for USD 2.1bn. MCC is evaluating a potential expansion of the Ramu mine, which could cost approximately USD 1.5bn. Ramu is a large scale nickel-cobalt mine with total estimated reserves of 1bn pounds of nickel and 100m pounds of cobalt.

Scotiabank and Argonaut are acting as financial advisors to Cobalt 27. Stikeman Elliott LLP and Piper Alderman are acting as legal counsel to Cobalt 27.

Highlands Pacific is a mining and exploration company listed on the Australian Stock Exchange and the Port Moresby Stock Exchange in PNG. Highlands' primary assets include an 8.56% interest in the producing Ramu mine and a 20% interest in Frieda River Copper-Gold Project, both located in PNG.

Highlands also holds 49% interest in a joint venture with Anglo American on the Star Mountains Copper Gold exploration project in PNG and has exploration tenements on Normanby Island (Sewa Bay).

Cobalt 27 Capital Corp. is an electric metals investment vehicle offering exposure to metals integral to key technologies of the electric vehicle and battery energy storage markets.

Country: Australia

Sector: Metals/Mining

Target: Highlands Pacific

Buyer: Cobalt 27 Capital Corp

Vendor:

Deal size in USD: 70m

Type: LBO

Financing: Cash

Status: Closed

Buyer advisor: , ,

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Publication:M & A Navigator
Date:May 20, 2019
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