(TheNewswire)
HIGHLIGHTS
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- Jervois closes its US$160 millionacquisition of Freeport Cobalt, with the final purchase priceincluding working capital but excluding cash being approximatelyUS$192 million to reflect higher cobalt inventory acquired
- Acquisition aims to consolidate thetransformation of Jervois into a global, vertically integrated cobaltand nickel company of scale
- Jervois has purchased an operatingglobal leader in the cobalt industry, with an established marketplatform that is diversified by product and value chain segment
- A$313 million equity raise closedwith final settlement of the A$177 million retail entitlement offertranche, fully underwritten by UBS and Jefferies
- AustralianSuper invests a furtherA$73.9 million; Mercuria, one of the world’s largest energy andcommodity traders, invests A$45.7 million
- Jervois Directors and Managementsubscribe for an additional A$3.57 million to support thetransaction
1 September 2021 – TheNewswire- Jervois Global Limited (“ Jervois ” or the“ Company ”, formerly Jervois Mining Limited) (ASX:JRV) (TSXV:JRV)(OTC:JRVMF) confirms it has closed its previously announcedacquisition of 100% of Freeport Cobalt by purchasing all the shares ofFreeport Cobalt Oy and four affiliated entities from KobolttiChemicals Holdings Limited (“ KCHL ”) (the " Acquisition ").
The Acquisition has the potential to transform Jervoisinto the second largest producer of refined cobalt outside China,building on existing assets of Jervois’ Idaho Cobalt Operations(“ ICO ”) in the United States, expected to come into productionfrom mid-2022, and the São Miguel Paulista (“ SMP ”) nickel andcobalt refinery in São Paulo, Brazil which Jervois has agreed toacquire.
The Acquisition is expected to transform Jervois into aglobal, vertically integrated cobalt and nickel company of scale, ledby a highly experienced management team. Jervois is diversifiedacross multiple products and value chain segments with significantrelevance to leading cobalt producers and end-users.
Jervois’ acquisition of Freeport Cobalt also providesthe Company with an established global market platform from which tooperate. The industrial logic and strategic rationale for theAcquisition is compelling, with value for Jervois shareholdersexpected to be created through technical and commercial synergies withICO and SMP operations.
On 30 August 2021, Jervois announced the successful completion of the retail component of itsunderwritten 1 for 1.56 accelerated non-renounceable entitlement offer(“ Retail EntitlementOffer ”) of new fully paid ordinary shares(“ New Shares ”) announced to ASX on Tuesday, 27 July 2021.
The Retail Entitlement Offer closed at 5:00pm (Sydneytime) on Wednesday, 25 August 2021 and raised a total of approximatelyA$178 million at A$0.44 per New Share (the “ Offer Price ”). Together with the institutional placement and institutionalcomponent of the entitlement offer(“ Offer ”), Jervois issued a total of 711,429,832 New Shares at theOffer Price for aggregate gross proceeds of approximately A$313million.
It is intended that proceeds from the Offer will beused to fund the acquisition of Freeport Cobalt, for ICO developmentexpenditure and for general corporate purposes, including advancementof feasibility studies at the SMP nickel cobalt refinery in Brazil.
Jervois insiders and principals have contributed A$3.57million to the Offer, which includes A$1.0 million from Mr DavidIssroff, who Jervois has proposed to appoint to its Board followingcompletion of its acquisition of Freeport Cobalt.
Insider participants include:
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-- Peter Johnston, Non-ExecutiveChairman (A$0.374 million, 850,000 New Shares)
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-- David Issroff, Non-ExecutiveDirector (proposed) (A$1.0 million, 2,272,727 New Shares)
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-- Greg Young, Executive GeneralManager (“ EGM ”) – Commercial (A$1.335 million, 3,080,830 NewShares)
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-- James May, Chief FinancialOfficer / EGM – Finance (A$0.4 million, 909,091 New Shares)
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-- Ken Klassen, General Counsel /EGM – Legal (A$0.3 million, 681,818 New Shares)
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-- Brian Kennedy, Non-ExecutiveDirector (A$0.05 million, 113,636 New Shares)
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-- Bryce Crocker, Chief ExecutiveOfficer and Executive Director (A$0.045 million, 102,272 NewShares)
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-- Craig Morrison, Group FinancialController (A$0.05 million, 113,636 New Shares)
The New Shares issued to Mr. Ken Klassen have beenissued pursuant to exemptions from the Canadian prospectusrequirements and will be subject to a four month and one day holdperiod.
AustralianSuper Pty Limited (“ AustralianSuper ”)has subscribed for 53,567,731 New Shares (at an aggregate subscriptionprice of approximately A$23.6 million) in connection with theshortfall of the Retail Entitlement Offer. This is in addition tothe A$50.3 million invested by AustralianSuper in the institutional placement and institutional component of theOffer tranches. Overall AustralianSuper hasinvested an additional A$73.9 million into Jervois to support theacquisition of Freeport Cobalt and advancement of both ICO andSMP.
Under Canadian securities laws, each of the individualslisted above (aside from Mr. Craig Morrison) and AustralianSuper is a“related party” of the Company within the meaning of that termdefined in Multilateral Instrument 61-101 – Protection of Minority Shareholders inSpecial Transactions (“ MI 61-101 ”) as theyare either a Director or senior officer of the Company, or they holdgreater than 10% of the Company’s outstanding shares, respectively(“ Related PartyParticipation ”). The Related PartyParticipation in the Offer constitutes a “related partytransaction” within the meaning of MI 61-101. Pursuant to Sections5.5(a) and 5.7(1)(a) of MI 61-101, the Company is exempt fromobtaining a formal valuation and minority approval of the Company’sshareholders in respect of the Related Party Participation due to thefair market value of the Related Party Participation being below 25%of the Company’s market capitalization for purposes of MI 61-101. The Company will file a material change report in respect of closingof the Offer. However, the material change report will be filed lessthan 21 days prior to the closing of the Offer, which is consistent with market practice and the Companydeems reasonable in the circumstances.
As part of the Offer, Mercuria Energy Trading(“ Mercuria ”) one of the world’s largestintegrated energy and commodities companies with approximately US$120billion annual turnover, has acquired a significant equity position inthe Company, via the investment of A$45.7 million. Mercuria andJervois have agreed to work together to advance their commercialfootprint and leverage rising demand for nickel and cobalt products. Mercuria has indicated it stands ready to commit additional capitalto support expansion of Jervois’ activities across ICO, SMP,Freeport Cobalt and future growth initiatives. Any such investmentwill be subject to a definitive agreement to be entered into by theCompany and Mercuria at the time of such investment.
UBS AG Australia Branch and Jefferies (Australia) PtyLtd acted as joint lead managers and underwriters of the Offer. Clarksons Platou Securities AS acted as a manager. Totalinvestment banking fees will be 3.09% of total Offer proceeds.
On behalf of Jervois Global Limited
Bryce Crocker, Chief Executive Officer
For further information, please contact:
Investors and analysts: James May Chief Financial Officer Jervois Global jmay@jervoismining.com.au | Media: Nathan Ryan NWR Communications nathan.ryan@nwrcommunications.com.au Mob: +61 420 582 887 |
Forward-LookingStatements
This news release may containcertain “Forward-Looking Statements” within the meaning of theUnited States Private Securities Litigation Reform Act of 1995 andapplicable Canadian securities laws. When used in this news release,the words “anticipate”, “believe”, “estimate”,“expect”, “target, “plan”, “forecast”, “may”,“schedule”, “expected” and other similar words or expressionsidentify forward-looking statements or information. Theseforward-looking statements or information may relate to the effects ofclosing the Acquisition, the expected benefits of the combined assetsof the Company, expected production at ICO, acquisition of SMP,relationship with Mercuria and certain other factors or information.Such statements represent Jervois’ current views with respect tofuture events and are necessarily based upon a number of assumptionsand estimates that, while considered reasonable by Jervois, areinherently subject to significant business, economic, competitive,political and social risks, contingencies and uncertainties. Manyfactors, both known and unknown, could cause results, performance orachievements to be materially different from the results, performanceor achievements that are or may be expressed or implied by suchforward-looking statements. Jervois does not intend, and does notassume any obligation, to update these forward-looking statements or information to reflectchanges in assumptions or changes in circumstances or any other eventsaffections such statements and information other than as required byapplicable laws, rules and regulations.
Neither TSX Venture Exchange nor itsRegulation Services Provider (as that term is defined in policies ofthe TSX Venture Exchange) accepts responsibility for the adequacy oraccuracy of this release.
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