CALGARY, ALBERTA--(Marketwire - Feb. 11, 2013) - Cobalt Coal Ltd. ("Cobalt" or the "Corporation") (TSX VENTURE:CCF) is pleased to announce that it intends to complete a private placement of up to $7,000,000 of units (the "Units") at a price of $1,000 per Unit (the "Offering"). Each Unit will be comprised of $1,000 principal amount of secured redeemable debentures (the "Debentures"), which will mature thirty-six months from the date of issuance and 4,000 common shares in the capital of the Corporation. The Debentures will bear interest at a rate of 10% per annum payable quarterly from the date of closing.
The Debentures will be secured by a charge to be registered on all of the mining equipment to be acquired from time to time with the proceeds of the Offering.
Cobalt may engage finders or agents to act as agents of Cobalt in connection with the Offering, and in connection therewith may pay the finders and agents a cash commission of up to 8% of the proceeds of the Offering that result from such parties efforts, subject to compliance with applicable securities laws. The agents may also be granted broker warrants to purchase up to 8% of the number of Units sold under the Offering, with each Broker Warrant entitling the holder to purchase one Unit at $1,000 per Unit for a period of 18 months from the closing of the Offering.
The net proceeds made available through the sale of the Units will be used:
- to complete mine face up work on the Mill Creek tract; and
- to acquire mining equipment
to commence production from the first of the 5 tracts that comprise the newly acquired Virginia properties ("Virginia Properties"), that being the Mill Creek tract which is already permitted for production and the construction of a wash plant; and
- to drill 5 evaluation holes on the Virginia Properties; and
- for general working capital purposes.
The Offering is subject to the approval of the TSX Venture Exchange. Pursuant to applicable securities laws, all securities issued pursuant to the Offering will be subject to a hold period of four months following the closing of the Offering.
In addition to the Offering described herein, management of Cobalt is engaged in discussions with various parties with a view to negotiating a joint venture arrangement for the recently acquired Virginia properties. In the event that such discussions are successful, additional capital may be made available to Cobalt to accelerate development on the Virginia properties in exchange for a participating interest in a joint venture to be established regarding the Virginia properties.
Cobalt is a publicly traded coal acquisition and production company headquartered in Calgary, Alberta, Canada with a regional office Virginia, USA. Cobalt was created to capitalize on opportunities in the metallurgical coal mining industry.
The securities of Cobalt being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.
Statements in this news release may contain forward-looking information including the use of proceeds from the Offering, the closing of the Offering and ongoing joint venture discussions. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Corporation. These risks include, but are not limited to, the risks associated with the coal mining industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to, operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on these forward-looking information.