First Cobalt Announces Friendly Acquisition of US Cobalt...

First Cobalt Announces Friendly Acquisition of US Cobalt
TORONTO, ON — (March 14, 2018) – First Cobalt Corp. (TSX-V: FCC, ASX: FCC, OTCQB:
FTSSF) (“First Cobalt”) and US Cobalt Inc. (TSX-V: USCO, OTCQB: USCFF) (“US Cobalt”) are
pleased to announce they have entered into a definitive agreement (the “Arrangement
Agreement”) whereby First Cobalt will acquire all of the issued and outstanding shares of US
Cobalt pursuant to a plan of arrangement (the “Transaction”), further enhancing First Cobalt’s
position as a pure-play North American cobalt company.
Under the terms of the Arrangement Agreement, all of the US Cobalt issued and outstanding
common shares will be exchanged on the basis of 1.5 First Cobalt common shares for each
US Cobalt common share issued and outstanding (the “Exchange Ratio”). The Exchange Ratio
represents a 61.8% premium to US Cobalt’s closing price and a 58.5% premium based on
both companies’ 5-day volume-weighted average trading prices, both as at March 13, 2018.
As part of the Transaction, it is expected that (a) all US Cobalt stock options outstanding will
be replaced with First Cobalt stock options and be exercisable for First Cobalt shares based
on the Exchange Ratio for the remainder of their original term, and (b) all US Cobalt warrants
outstanding will participate in the Transaction on a comparable basis to holders of US Cobalt
common shares based on the in-the-money portion of those securities. This implies a total
equity value of approximately C$149.9 million on a fully-diluted in-the-money basis.
Upon completion of the Transaction, existing First Cobalt and US Cobalt shareholders will own
approximately 62.5% and 37.5% of the combined company respectively, on a fully-diluted
in-the-money basis, assuming all US Cobalt options and warrants are exercised prior to
completion of the Transaction.
Transaction Highlights
• Clean Cobalt: Strategically positions First Cobalt as a leading non-DRC cobalt
company with North American projects located in close proximity to infrastructure as
well as electric vehicle and technology hubs such as Michigan and California
• Vertically Integrated: Pure-play North American cobalt company with three
significant North American assets
1. Ontario: 50 historic mines across 100 km2 in the Canadian Cobalt Camp
2. Idaho: Iron Creek Cobalt Project in the U.S. with a historic mineral resource
estimate (non-compliant with NI 43-101).
3. Refinery: The only permitted cobalt refinery in North America capable of
producing battery materials
• Revaluation Opportunity: Combined entity will have an enhanced capital markets
profile with a global institutional shareholder base, a strong balance sheet and a proven
management team