November 29, 2017 – Vancouver, British Columbia – M2 Cobalt Corp. (the “Company”) (TSXV: ADP.V) is pleased to announce that it has entered into a series of definitive purchase agreements (collectively, the “Definitive Agreements”) with 1126302 B.C. Ltd. (“1126302”), each of the shareholders of 1126302, 0972697 B.C. Ltd., Manuforty Holding Company Limited, and each of their respective subsidiaries (collectively, the “Vendors”), each arms length parties to the Company. The Definitive Agreements replace the letter of intent entered into by the Company and announced on November 7th, and give the Company the right to acquire a series of seven exploration licenses in the Republic of Uganda spanning approximately 1,564 square kilometers (the “Transaction”).
In consideration for the acquisition of the licenses, the Company will issue 19,700,000 common shares (the “Consideration Shares”) to the shareholders of 1126302 and will complete a series of cash payments totaling $1,100,000. Upon issuance, the Consideration Shares will be subject to a pooling arrangement from which they will be released in tranches every six months over a thirty-six month period, subject to acceleration in certain circumstances. In connection with completion of the Transaction, the Company intends to pay finders’ fees of $425,000 (approximately 3.9% of consideration) to a party who assisted in facilitating the Transaction.
Completion of the Transaction remains subject to a number of conditions, including approval of the TSX Venture Exchange (the “Exchange”), and certain other closing conditions as are customary in transactions of this nature. The Transaction cannot be completed until these conditions are satisfied. As part of its due diligence process, and as required by the Exchange, the Company has commissioned a geological report on the seven licenses to be acquired. Once completed, a copy of the geological report will be available for review under the Company’s profile on SEDAR (www.sedar.com). For further information concerning the Transaction and the licenses, readers are encouraged to review the Company’s news release of November 7th. Trading in the Company’s common shares will remain halted pending further filings with the Exchange in connection with the Transaction.
As previously announced, in connection with the Transaction, the Company is conducting a non-brokered private placement of subscription receipts (each, a “Receipt”) at a price of $0.50 per Receipt. The proceeds of the placement will be held in escrow pending completion of the Transaction. Upon completion of the Transaction, each Receipt will automatically convert into one unit of the Company. Each “unit” will consist of one common share of the Company and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to acquire a further common share at a price of $0.80 per share for period of twenty-four months, subject to accelerated expiry in the event the common shares of the Company trade on the Exchange at a price of $1.40 or higher for ten consecutive trading days. The proceeds of the placement are intended to be used to advance exploration efforts in Uganda, and to satisfy working capital requirements of the Transaction.
Simon Clarke, Chief Executive Officer of the Company, commented “we are very pleased with the progress being made to finalize this Transaction which we believe positions the Company with the potential for the discovery of large scale cobalt deposits, and related metals, in areas which share many geologic features with the neighboring Democratic Republic of the Congo.”
On behalf of the Board,
M2 COBALT CORP.
Simon Clarke, Chief Executive Officer
Completion of the Transaction is subject to a number of conditions, including Exchange acceptance. The Transaction cannot close until the required approvals are obtained, and the outstanding conditions are satisfied. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release may contain certain “Forward-Looking Statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target, “plan”, “forecast”, “may”, “schedule” and other similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to regulatory or government requirements or approvals of the Transaction, the reliability of third party information, and certain other factors or information. Such statements represent the Company’s current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affections such statements and information other than as required by applicable laws, rules and regulations.