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Diversified battery metals streaming and royalty company is the result of the acquisition which will be leading high-growth. Its exposure increases with increased nickel exposure to a large, long-life, low cost, high-growth nickel-cobalt mine and diversifies and expands an existing portfolio. The acquisition is accretive to Cobalt 27 shareholders and has an attractive re-rating potential.
The transaction value for the acquisition of the US $70 million out of which the amount anticipated to be funded with cash consideration is the US $61 million. All-cash consideration of A$0.105 per share of Highlands Pacific Limited that is not already owned by PanAust Limited or by Cobalt 27 this represents 30% premium to the 20-day VWAP and a premium of 44% to Highlandsâ closing price on December 24, 2018.
PanAust would transfer to Highlands legal and beneficial ownership of 128,865,980 Highlands shares currently held by PanAus in return for Highlands transferring to PanAust all the shares in Highlands Frieda Limited and an estimated US$0.3 million in cash and agree to the cancellation of any outstanding liabilities owed by Highlands to PanAust. The scheme requires approval by most Highlandsâ shareholders under the PNG Companies Act.
In the absence of a higher proposal, the directors of Highlands have stated that they intend to vote shares that they own in favor of the Scheme. Also, in the absence of a superior proposal, the shareholders holding an aggregate of approximately 30% of Highlandsâ shares outstanding have stated an intention to vote in favor of the Scheme. Funds associated with LIM Advisors Limited, and Tribeca Investment Partners Pty Ltd. comprise PanAust. The complete transaction is expected to close in Q2 2019.
Highlands Pacific is an ASX-listed battery metal producer and developer. Both located in Papua New Guinea, Primary assets are a 20% interest in the Frieda River Copper-Gold Project and 8.56% interest in the Ramu Mine. Ramu partner loans are non-recourse and have a balance of US $115 million. Ramuâs operator is investigating a ~US $1.5 billion expansion of the mine, the Metallurgical Corporation of China, Cobalt 27 will participate in the expansion and increase its production.
The proposed transaction requires the sale of Highlandsâ interest in Frieda River to PanAust, Cobalt 27 to acquire interests in Star Mountains and Sewa Bay and will evaluate strategic alternatives. Highlands Pacific Limited (ASX:HIG) currently under suspended status last traded at a market price of $3.290 which is -1.791% lower than the previous day close.
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