Join our daily newsletter At The Bell to receive exclusive market insights
- European Cobalt has entered exclusive option agreements to acquire Maroon Gold
- Maroon Gold is a developer focused on the Charter Towers Goldfield region in northern Queensland
- The company plans to leverage Maroon’s significant ground position to extend the resource base and evaluate mining opportunities
- The proposed acquisition takes place through the issue of over 900,000 shares and a cash payment of 100,000, repaying a $2 million convertible note and assuming US$18.3 million of Maroon’s debt position
- After today’s announcement, European Cobalt’s shares have plummeted 30.3 per cent and are trading for 2.3 cents each
European Cobalt has entered exclusive option agreements with Maroon Gold to acquire 100 per cent of its issued capital.
Maroon Gold is a private equity-backed gold developer focused on the Charter Towers Goldfield region in northern Queensland.
Company managing director Elect Glenn Baldwin is pleased with the acquisition deal.
“Maroon Gold has established a high-quality portfolio of near-term development assets combined with the requisite processing infrastructure to capitalise on the strong gold price environment,” Glenn said.
Maroon recently completed tribute mining and processed material from Laneway Resource’s Agate Creek Gold Mine. It also has the Blackjack Processing Plant under its belt.
Maroon has a total resource base of 250,000 ounces of gold across three resources.
Additionally, the developer has a landholding of 245 square kilometres with multiple drill-ready targets defined.
“Through leveraging Maroon’s strategic ground position in the Charters Towers region and the skillset of Maroon’s team, the mineral resources can be rapidly evaluated to determine the feasibility of development,” Glenn added.
The agreement to acquire Maroon Gold is conditional and subject to shareholder approval.
The proposed acquisition is through the issue of 900,279,150 shares, payment of A$100,000 cash, repayment of a $2 million convertible note and assuming a working capital liability of approximately $2 million.
Additionally, European Cobalt will repay A$26.8 million (US$18.3 million) of Maroon’s outstanding debt for its acquisition of the Blackjack Plant, refurbishment and the acquisition of mining assets.
Unless deferred, the company has until March 27, 2021 to pay the debt in five interest repayments.
Once the acquisition is complete, the cobalt company’s short term strategy involves determining the feasibility of resource economic development, resource definition drilling, identifying mining and processing opportunities within the region and a processing expansion study to define the scalability of the plant and infrastructure.
Following the acquisition, European Cobalt will be rebranded as Mojo Minerals.
After today’s announcement, European Cobalt’s shares have plummeted 30.3 per cent and are trading for 2.3 cents each at roughly midday trade AEDT.
