Vancouver, British Columbia--(Newsfile Corp. - November 29, 2017) - M2 Cobalt Corp. (TSXV: MC) (the "Company") is pleased to announce that it has entered into a series of definitive purchase agreements (collectively, the "Definitive Agreements") with 1126302 B.C. Ltd. ("1126302"), each of the shareholders of 1126302, 0972697 B.C. Ltd., Manuforty Holding Company Limited, and each of their respective subsidiaries (collectively, the "Vendors"), each arms length parties to the Company. The Definitive Agreements replace the letter of intent entered into by the Company and announced on November 7th, and give the Company the right to acquire a series of seven exploration licenses in the Republic of Uganda spanning approximately 1,564 square kilometers (the "Transaction").
In consideration for the acquisition of the licenses, the Company will issue 19,700,000 common shares (the "Consideration Shares") to the shareholders of 1126302 and will complete a series of cash payments totaling $1,100,000. Upon issuance, the Consideration Shares will be subject to a pooling arrangement from which they will be released in tranches every six months over a thirty-six month period, subject to acceleration in certain circumstances. In connection with completion of the Transaction, the Company intends to pay finders' fees of $425,000 (approximately 3.9% of consideration) to a party who assisted in facilitating the Transaction.
Completion of the Transaction remains subject to a number of conditions, including approval of the TSX Venture Exchange (the "Exchange"), and certain other closing conditions as are customary in transactions of this nature. The Transaction cannot be completed until these conditions are satisfied. As part of its due diligence process, and as required by the Exchange, the Company has commissioned a geological report on the seven licenses to be acquired. Once completed, a copy of the geological report will be available for review under the Company's profile on SEDAR (www.sedar.com). For further information concerning the Transaction and the licenses, readers are encouraged to review the Company's news release of November 7th. Trading in the Company's common shares will remain halted pending further filings with the Exchange in connection with the Transaction.
Private Placement
As previously announced, in connection with the Transaction, the Company is conducting a non-brokered private placement of subscription receipts (each, a "Receipt") at a price of $0.50 per Receipt. The proceeds of the placement will be held in escrow pending completion of the Transaction. Upon completion of the Transaction, each Receipt will automatically convert into one unit of the Company. Each "unit" will consist of one common share of the Company and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to acquire a further common share at a price of $0.80 per share for period of twenty-four months, subject to accelerated expiry in the event the common shares of the Company trade on the Exchange at a price of $1.40 or higher for ten consecutive trading days. The proceeds of the placement are intended to be used to advance exploration efforts in Uganda, and to satisfy working capital requirements of the Transaction.
Simon Clarke, Chief Executive Officer of the Company, commented "we are very pleased with the progress being made to finalize this Transaction which we believe positions the Company with the potential for the discovery of large scale cobalt deposits, and related metals, in areas which share many geologic features with the neighboring Democratic Republic of the Congo."
