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International Cobalt unveils plan to merge with Africa-focused resource group Tantalex

Tantalex is focused on the exploration and development of lithium, cobalt, tantalum properties in Africa
International Cobalt unveils plan to merge with Africa-focused resource group Tantalex
Tantalex has entered into a letter of intent with International Cobalt

International Cobalt Corp (CNSX:CO) announced Monday a plan to merge with Tantalex Resources Corp (CNSX:TTX), which is focused on the exploration and development of lithium, cobalt, tantalum properties in Africa.

The combined company, dubbed "Amalco", will be deemed to be valued in the basis of half Tantalex and half International Cobalt, or 50 % each.

As part of a Letter of Intent for the deal, all previously issued and outstanding stock options for each of Tantalex and International Cobalt will be cancelled and replaced by stock options of the newly merged entity.

READ: International Cobalt kicks off 2,000m diamond drill programme at Ramsay

They will then be issued under a new stock option plan to be implemented by Amalco.

The 50:50 ratio of the new firm may, however, be increased or decreased for Tantalex and/or International Cobalt should certain conditions occur. For example, if Tantalex does not deliver a mineral resource of a minimum of 15 million tons at 0.65% lithium oxide (Li2O), a 50% portion of the Tantalex shares under a definitive agreement will be cancelled.

In addition, on closing the deal, International Cobalt's cash position and the value of certain prepaid services and contributed into Amalco shall be a minimum of $8 million

If International Cobalt fails to deliver and contribute to Amalco such minimum cash position, International Cobalt's participation into the combined company will be reduced proportionally.

To finance Tantalex's continuing operations until closing this deal, International Cobalt will provide a bridge loan of $1 million by subscribing to a Tantalex convertible debenture bearing an interest of 12% due on maturity, which is one year from the date of issue and convertible into shares.

Other operations

International Cobalt has projects in the Idaho cobalt belt and in Atlantic Canada, where there is a rich history of mine development and operation.

Last month, International Cobalt says it started a 2,000-meter diamond drilling program at the Ramsay project in New Brunswick, Canada.

Spektra Drilling of Val d’Or, Quebec will carry out the work, which is designed to test for potential extensions of cobalt intercepts found by previous operators. Its Blackbird Creek project in  Idaho is now at "drill-ready" status as it has received and compiled all sampling results from the summer program.

Crews completed a systematic program, which resulted in 2015 soil samples and 293 rock chip samples.

The company has now identified four distinct prospects for follow up.

International Cobalt shares were unchanged in Toronto at $0.065.

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