Canadian mining company First Cobalt has signed a $140m binding agreement to wholly acquire Cobalt One.  

The move comes after a non-binding agreement was signed by the parties last month.

Under the agreement, First Cobalt will offer 0.145 common shares to Cobalt One shareholders.

The merger will create a new pure-play cobalt exploration company (MergeCo) with a portfolio of exploration assets and a cobalt extraction refinery in the Ontario mining site.  

MergeCo is expected to have a proforma market capitalisation of $110m.

"MergeCo is expected to have a proforma market capitalisation of $110m."

Upon signing the non-binding agreement, Cobalt One executive director Jason Bontempo said: “This proposal represents an attractive opportunity for Cobalt One to expand and allow shareholders to benefit from being part of a larger company that is expected to have greater liquidity and access to capital from two of the world’s leading capital markets."

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Through the acquisition, First Cobalt will have access to greater liquidity, besides the prospect of market re-rating with improved scale.

Cobalt One has seven high-grade cobalt properties in Cobalt, Ontario, including Cobalt Town, Lorrain Valley Cobalt, Silver Centre Cobalt and Silverfields mine property.

With assets spanning around 3,000ha, First Cobalt has three former mines in the same area.