The two companies have executed a binding Heads of Agreement (HOA) which will result in dissolution of the Thackaringa Joint Venture (TJV) and provide COB with full control and continuing management of the project.
This agreement follows the Independent Expert Determination on Monday that confirmed that COB and BPL have 70:30 respective interests in the project.
Catalyst for discussions
COB and BPL have used the determination as a catalyst for discussion resulting in the HOA.
The suspension of trading in COB’s securities has now been lifted with shares up 21% to 17 cents.
Both companies said they were delighted that a commercial outcome had been reached that would allow the development of the project with benefits accruing to shareholders of both companies.
The Broken Hill Cobalt Project, which was formerly known as the Thackaringa Cobalt Project, is west of Broken Hill in the far west of NSW.
Under the binding HOA BPL will receive:
- $500,000 cash;
- 9 million COB fully paid ordinary shares at a deemed issue price of 15 cents per share;
- $1 million three-year convertible note at interest of 6% per annum payable in arrears, convertible with 20-cent conversion price and with COB having an option for early payout; and
- $3 million five-year promissory note, interest-free for years 1, 2 and 3, and interest of 6% per annum for years 4 and 5, payable in arrears. This note is to be secured over the title to the tenements.
As per the TJV, BPL retains the existing exploration base and precious metal rights and its existing 2% Net Smelter Royalty (NSR) on all cobalt production from the project.
COB and BPL are working together to complete all necessary documents.