Cobalt Blue to Raise Up to $6.08 Million in Rights Issue

2 min read | November 18, 2024 02:02 PM AEDT | By Team Kalkine Media

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Cobalt Blue to Raise Up to $6.08 Million in Rights Issue — Image source: shutterstock

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Highlights

Cobalt Blue Holdings Ltd plans to raise $6.08 million through a rights issue.

Proceeds will support Kwinana Refinery programs, strategic reviews, and general operations.

Eligible shareholders in Australia and New Zealand can participate proportionately.

Cobalt Blue Holdings Ltd (ASX:COB) has announced a pro-rata, non-renounceable rights issue aimed at raising up to $6.08 million before costs. The issue allows shareholders to purchase one new share for every five held at a price of $0.072 per share. This represents a 10% discount to the company’s closing price of $0.08 on November 15, 2024, and a 20-23% discount to the 10 and 15-day volume-weighted average price (VWAP), respectively, as of that date.

The offer will open on November 26, 2024, and close on December 12, 2024. Settlement for the new shares is expected to occur on December 16, 2024. These new shares will rank equally with existing shares upon issuance.

Use of Funds

Cobalt Blue plans to use the funds from the rights issue to support key initiatives, including the Kwinana Cobalt Refinery (KCR) work programs. These efforts will cover engineering, permitting, financing, and legal support, as well as agreements related to feedstock and offtake. The company also plans to allocate proceeds to strategic review studies for the Broken Hill Cobalt Project (BHCP) and explore new opportunities through ReMine+ initiatives.

Additionally, the funds will be used for general corporate activities and debt obligations. This includes utilizing an R&D tax rebate of $2.3 million expected this quarter, alongside existing cash reserves, to address an outstanding promissory note.

Eligibility and Participation

Shareholders registered by the record date, with an address in Australia or New Zealand, can participate in the offer. Eligible shareholders may subscribe for new shares proportional to their current holdings. Those who do not participate will experience a dilution of their shares and will not receive any value for unclaimed entitlements.

The entitlement issue is non-renounceable, meaning the rights cannot be traded or transferred. Further details will be provided to shareholders in an offer booklet expected to be dispatched on November 26, 2024.

This initiative reflects Cobalt Blue’s strategic efforts to secure funding for its ongoing projects and strengthen its operational capacity.

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