Today Swiss firm Pala Investments announced that it intends to buy Cobalt 27 Capital Corp. (TSXV: KBLT) for C$501 million ($375 million). Subsequently, a new company named Nickel 28 Capital Corp. will be created to hold Cobalt 27’s assets and projects.
Cobalt 27 currently owns a joint venture interest (8.56%) in Ramu, a producing nickel-cobalt mine located near Madang on the north coast of Papua New Guinea. The mine was financed, constructed and commissioned by majority-owner and operator Metallurgical Corporation of China in 2012 for $2.1 billion, which at the time was China’s largest overseas mining investment. Last year Ramu achieved production of 35,355 tonnes of nickel and 3,275 tonnes of cobalt.
Cobalt 27 also holds streams and royalties on various projects across Canada. The company previously acquired a cobalt stream on Vale’s Voisey’s Bay mine in Newfoundland and Labrador, which allows Cobalt 27 to receive 32.6% of the mine’s production beginning in 2021. Its royalty portfolio includes a 2% net smelter return on the Turnagain project in British Columbia, one of the largest undeveloped nickel-cobalt sulphide deposits in the world.
Pala will inject $5 million into Nickel 28 upon its inception and retain a 4.9% interest in the new company. The current Cobalt 27 leadership team will continue as the board and management of Nickel 28, according to today’s press release.
Shares of Cobalt 27 rose by close to 20% during Tuesday’s trading session. The company has a market capitalization of approximately C$346 million.