First Cobalt Announces Friendly Acquisition of US Cobalt

First Cobalt Corp. (TSX-V: FCC, ASX: FCC, OTCQB: FTSSF) and US Cobalt Inc. (TSX-V: USCO, OTCQB: USCFF) (“US Cobalt”) announced they have entered into a definitive agreement (the “Arrangement Agreement”) whereby First Cobalt will acquire all of the issued and outstanding shares of US Cobalt pursuant to a plan of arrangement (the “Transaction”), further enhancing First Cobalt’s position as a pure-play North American cobalt company.

Under the terms of the Arrangement Agreement, all of the US Cobalt issued and outstanding common shares will be exchanged on the basis of 1.5 First Cobalt common shares for each US Cobalt common share issued and outstanding (the “Exchange Ratio”). The Exchange Ratio represents a 61.8% premium to US Cobalt’s closing price and a 58.5% premium based on both companies’ 5-day volume-weighted average trading prices, both as at March 13, 2018. As part of the Transaction, it is expected that (a) all US Cobalt stock options outstanding will be replaced with First Cobalt stock options and be exercisable for First Cobalt shares based on the Exchange Ratio for the remainder of their original term, and (b) all US Cobalt warrants outstanding will participate in the Transaction on a comparable basis to holders of US Cobalt common shares based on the in-the-money portion of those securities. This implies a total equity value of approximately C$149.9 million on a fully-diluted in-the-money basis.

Upon completion of the Transaction, existing First Cobalt and US Cobalt shareholders will own approximately 62.5% and 37.5% of the combined company respectively, on a fully-diluted in-the-money basis, assuming all US Cobalt options and warrants are exercised prior to completion of the Transaction.


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