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Cobalt 27 agrees to streaming finance deal with Australian miner

  • Wednesday, May 23, 2018
  • Source:ferro-alloys.com

  • Keywords:Cobalt 27, deal,Australian miner
[Fellow]Cobalt 27 agrees to streaming finance deal with Australian miner

[ferro-alloys.com]Canada's Cobalt 27 Capital Corp said on Tuesday it has agreed to the world's first cobalt-nickel streaming finance deal on a producing mine with an Australian miner as the industry looks to bolster supplies of the key battery metal.

Streaming is a type of alternative finance that allows an investor to make an upfront payment in exchange for future production at a discounted price. The transaction is the world's first cobalt-nickel streaming deal on a producing mine, Cobalt 27 said in a statement.

The transaction comes as Brazilian miner Vale SA was seeking to sell cobalt from its Voisey's Bay mine in eastern Canada in a streaming deal worth around $500 million, Reuters reported in January.

Prices of cobalt, a critical component in rechargeable lithium-ion batteries for electric vehicles, have soared fourfold over the past two years to close to $100,000 a tonne on concerns of a shortfall as demand is forecast to spike.

Cobalt 27 said it had reached a C$145 million ($113.33 million) deal with Highlands Pacific Ltd to buy cobalt and nickel from a Papua New Guinea mine that the Australian miner has a stake in.

Cobalt 27, a small buyer of physical cobalt, is also in advanced talks with other owners of the Ramu mine on Papua New Guinea's north coast for a further $87 million stream, it said. Both transactions can be funded from cash or a new debt facility.

Under the transaction with Highlands, Cobalt 27 will purchase 55 percent of Highlands' share of cobalt production and 27.5 percent of its share of nickel output from the mine.

That will result in Cobalt 27 receiving an estimated 450,000 pounds of cobalt and 2.25 million pounds of nickel in concentrate a year from Ramu.

As a result of the deal, Highlands' ownership of Ramu will increase to 11.3 percent from 8.56 percent. The mine is majority-owned and operated by Metallurgical Corporation of China Ltd. Other shareholders include the Papua New Guinea government, landowners and other Chinese investors.

Cobalt 27 has also agreed to buy a 13 percent stake in Highlands, a Papua New Guinea-focused mining explorer, developer and producer.

  • [Editor:王可]

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