First Cobalt has signed a definitive merger agreement with CobalTech Mining in order to create a pure-play cobalt exploration company.

The latest move comes after the companies signed a binding letter of intent in June.

Once the transaction is completed, the combined entity is expected to have exploration assets, 11 former producing mines and a mill facility in the Cobalt, Ontario mining camp.

CobaltTech CEO Bruce Bragagnolo said: “This transaction creates immediate value for CobalTech shareholders and allows them to participate in further upside within a larger, more liquid company.

“Our shared vision of exploring for bulk cobalt mining opportunities in the Ontario Cobalt Camp will be facilitated with this merger.”

"Our shared vision of exploring for bulk cobalt mining opportunities in the Ontario Cobalt Camp will be facilitated with this merger."

Pursuant to the agreement, First Cobalt is expected to acquire all issued and outstanding common shares of CobalTech through a court-approved plan of arrangement.

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First Cobalt will offer 0.2632 of a common share to CobalTech shareholders in exchange for each common share of the latter.

First Cobalt president and CEO Trent Mell said: “The Cobalt Camp has been under-explored for its cobalt potential and has never seen the meaningful land consolidation achieved through this merger and the proposed merger between First Cobalt and Cobalt One.

“These transactions are expected to create the largest pure play cobalt explorer in the world and offer an opportunity to revisit this camp on a district scale for open pit mining potential.”

The closure of the transaction is subject to several conditions, including approval by the shareholders of CobalTech and receipt of all necessary regulatory approvals.