TORONTO, July 15, 2019 /CNW/ - First Cobalt Corp. (TSX-V:
FCC, OTCQX: FTSSF) ("First Cobalt") notes that former key executive
and directors of eCobalt Solutions Inc. (TSX:ECS) ("eCobalt") have
disseminated the following press release opposing the proposed
merger with Jervois Mining Limited (ASX:JRV) ("Jervois").
The Company did not participate in the preparation of the letter
but believes it to be of interest to all eCobalt shareholders and
we have therefore reproduced it in its entirety:
"Letter From Concerned Former Executives of eCobalt
Solutions Inc.
Dear Shareholders,
We have profound concerns regarding the proposed nearly
"at-market" merger between eCobalt and Jervois and the disclosure
found in eCobalt's Management Information Circular dated
June 19, 2019 (the "Circular").
As shareholders who are the former President & CEO and a former
Vice President of eCobalt, we are writing this open letter to
communicate how we intend to vote in regard to the Arrangement
resolution at eCobalt's upcoming shareholders meeting on
July 19, 2019 and the reasons for
this decision. In a nutshell, we believe the proposed
"merger" is highly beneficial for certain key officers and
directors of both companies; however, we are not convinced that it
is in the best interest of current eCobalt shareholders for the
reasons to be addressed below.
It appears to us that the Jervois team has demonstrated they
are shrewd negotiators as they have secured the 'YES' votes from
all of eCobalt's Directors and Officers, as well as from one of
eCobalt's largest shareholders, Dundee Corporation. This was
accomplished while simultaneously ensuring that the current CEO of
eCobalt (who was apparently eCobalt's principal negotiator of the
deal) is expected to be further enriched as a Director of the "New
Jervois" merged entity with a position on the resulting issuer's
Board of Directors. eCobalt's CEO also received a timely
gratuitous change to his employment contract with eCobalt
(addressed in detail below) making it more advantageous for him to
endorse the merger transaction. The result of these shrewd
negotiating accomplishments was the achievement of a very insulated
merger deal where: Jervois did not have to face alternate bidders
in an auction process in regard to eCobalt; only a symbolic nominal
premium is theoretically to be paid to eCobalt's shareholders
utilizing recently depreciating shares of Jervois in order to
acquire control of eCobalt and its prized Idaho Cobalt Project; no
specific significant alternative transactions were disclosed as
being considered and developed by eCobalt; disclosure available to
eCobalt's shareholders in the Circular is brief and opaque (while
paradoxically being encased in a 382-page document); and the
definitive deal terms found in the Arrangement Agreement provide
for only a theoretical (rather than practical) potential that a
"superior proposal" could arise due to the existence of major cash
penalties - basically a hefty "break fee" in the millions of
dollars, to be effectively borne by the shareholders of eCobalt in
terms of the valuation any alternate bidder or investor would
attribute to eCobalt under such circumstances. Good for
Jervois, bad for eCobalt.
During the weeks after eCobalt announced the proposed
Arrangement (April 1, 2019), we were
contacted by Robert Quinn (another
eCobalt alumnus, who was a member of eCobalt's board for
approximately 18 years and is its former Chairman) and Jim Engdahl (another eCobalt alumnus, who was a
member of eCobalt's board for approximately 24 years). We
together raised questions amongst ourselves and tried to decipher
the merits of eCobalt's proposed merger with Jervois. We are
confident that Mr. Quinn and Mr. Engdahl share our current
concerns.
Some details about some of our concerns include:
1. Not
the Prettiest Dance Partner: Jervois is an Australian
company with a history of little cash and three early-stage mineral
property assets. Two of these properties are in separate
countries in Africa, both of which
are rife with corruption problems (according to Transparency
International's Corruption Perceptions Index), and the other is in
Australia. Jervois' Australian mineral property is not yet
advanced to the Pre-Feasibility Study (PFS) stage as Jervois only
has a Preliminary Economic Analysis (PEA) for its leading property
(as filed on SEDAR on April 5,
2019). A PEA is preliminary in nature, it includes inferred
mineral resources that are considered too speculative geologically
to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves, and there is no
certainty that a PEA will be realized. In regards to Jervois'
Australian property, we are concerned that potential, large, low
grade, open pit projects such as that can require unexpected
additional years of development and may take multi billions of
dollars in research, development and capital expenditures to reach
their full potential production.
2.
Ethically Sourced and US-Based Idaho Cobalt
Project: eCobalt's US-based, advanced, near-term,
permitted, Idaho Cobalt Project is considered an ethical source of
this critical metal. It is also classified as a potential
domestic source of this critical material, which is important in
this era of trade wars, protectionism and security-of-supply
concerns. Ethical and domestic sourcing by potential
customers is a value-added, crucially important consideration in
developing a cobalt mine and providing supply to North American
customers. It is also a consideration of many
financiers. However, if the resulting New Jervois owns a
portfolio of mineral properties, including two that are not
considered by many as being capable of supplying ethically sourced
minerals, then this may create potential future liabilities or
financing challenges for New Jervois and its shareholders.
3.
Destination = a Junior Stock Exchange: Jervois is
utilizing the proposed transaction with eCobalt to gain direct
entry to the North American capital markets through its listing on
the TSX Venture Exchange ("TSXV"). eCobalt is currently
listed on the more senior Toronto Stock Exchange ("TSX"). We
are concerned that an effective migration from the TSX to the TSXV
is a big step in the wrong direction for eCobalt
shareholders. We are concerned that a TSXV listing will
reduce analyst coverage and financing opportunities involving
investors who either require or prefer securities and companies
that are listed on the senior exchanges. We are also
concerned about the minority shareholder protections that will be
lost by eCobalt's shareholders in a transition from the TSX to the
TSXV. For example, issuer's listed on the TSXV are not
required to adopt a "majority voting policy". This policy
provides that, in a non-contested election of directors, voting
will be by ballot and, if the number of shares "withheld" for any
nominee exceeds the number of shares voted "for" the nominee, then,
notwithstanding that such director is duly elected as a matter of
corporate law, he or she shall tender his or her resignation.
eCobalt adopted a majority voting policy at its shareholders
meeting held on June 21, 2013.
This is an important protection and empowerment for eCobalt
shareholders who are now being asked to agree to a nearly
"at-market" merger with Jervois where collectively control of the
corporation will be lost and eCobalt shareholders will become
minority shareholders of New Jervois and will collectively hold
less than 50% of the outstanding shares. The loss of a
majority voting policy is a win for any directors who seek
entrenchment and the avoidance of shareholder democracy and
activism. Other protections such as enhanced disclosure
requirements and lower triggers for shareholder approvals for share
issuances and dilutive transactions will also be lost in a
transition from the TSX to the TSXV. All else being equal, a
company with less minority shareholder protections and less
minority shareholder empowerments will face a greater minority
interest discount in its day-to-day trading price as compared to
its peer with enhanced minority shareholder protections and
empowerments. More on the topic of a comparison between the
TSX and the TSXV will be addressed below.
4. Wow
- How Many Shares?: Should this proposed merger and
Jervois' recently announced conditional private placement financing
be completed (see #5 below), then we estimate that New Jervois will
have approximately 640,000,000 shares outstanding. While this
share count may be considered culturally acceptable and the norm in
Australian capital markets, by the TSX-community's standards that
many hundreds of millions of shares will be considered by many
participants to be a massive number of shares. Those
circumstances may result in it becoming prohibitive for New Jervois
to obtain additional equity financing. In addition, the
potential for and expectation of a pending share consolidation or
"reverse split" may overhang the stock with a negative sentiment
and thereby suppress its value. While we believe eCobalt
would also be expected to issue more shares and raise more equity
financing if it does not merge with Jervois, at least all of the
funds raised by eCobalt would be utilized for the Idaho Cobalt
Project; whereas, far less than a third of Jervois' current
conditional equity financing may be used for advancement of the
Idaho Cobalt Project. This is an example of suffering direct
dilution while the Idaho Cobalt Project only receives a minority of
the proceeds.
5.
Even More Shares: Since the date of the
announcement of the proposed transaction by eCobalt and Jervois
(April 1, 2019), and since the date
of eCobalt's Circular (June 19,
2019), Jervois has undertaken a private placement whereby
Jervois has accepted irrevocable subscriptions for the conditional
issuance of 82,500,000 ordinary shares at a price of A$0.20 per share. The closing of this
financing is conditional upon the completion of the eCobalt
merger. Therefore, if the eCobalt merger is approved and is
completed, then these 82,500,000 additional shares of Jervois are
expected to be issued. We estimate that will result in
eCobalt's shareholders owning only approximately 41% of New Jervois
as opposed to the pro forma 47% that is described in eCobalt's
Circular.
6.
Process, Process, Process (Part 1): It is concerning to
us that no alternative transactions or deliberate process to both
foster and optimize an outcome are specifically described in the
"Background to the eCobalt Arrangement" section of eCobalt's
Circular. While we expect that the names of any specific
parties would remain undisclosed due to confidentiality agreements,
we would have expected eCobalt to have fostered and procured at
least one or more feasible alternative transactions or alternative
parties to negotiate with when considering the sale or merger of
the entire company. However, there is no mention of any
structured approach that occurred in regard to creating
alternatives to choose from and/or involving other parties in the
process so as to foster an auction environment or otherwise require
counter parties to make their best offers and optimize the outcome
for eCobalt. There is no convincing information in this
section of the Circular that allows us to conclude that: (i) the
exchange ratio of 1.65 shares of Jervois for every share of eCobalt
is the best and highest price that Jervois would pay for eCobalt;
(ii) that another potential acquirer or merger partner would not
have been expected to pay more (or would have been able to pay with
superior consideration – being cash or non-speculative shares); or
(iii) that an alternative transaction (or even sticking with the
status quo) would not have been a superior decision in terms of
maximizing shareholder value and minimizing risk. We are
troubled that the Circular does not convincingly make these three
specific points.
7.
Process, Process, Process (Part 2): Our concerns
regarding #6 above are heightened because the "Background to the
eCobalt Arrangement" section of eCobalt's Circular leads us to
believe that eCobalt's CEO, Michael
Callahan, principally negotiated the deal with Jervois on
behalf of eCobalt. We are concerned about how the CEO's
conflicting interests were managed in that: (a) Mr. Callahan's
personal financial interests are not well aligned with eCobalt's
shareholders' interests (Mr. Callahan only owns 100,000 common
shares of eCobalt); (b) he was negotiating with Jervois regarding a
change of control share exchange arrangement effectively on behalf
of eCobalt's shareholders; while (c) at the same time expecting he
would soon be terminated from eCobalt and would become a director
of Jervois. In addition, we are concerned that his financial
interests were satiated and his conflicts of interests were
exacerbated when, according to page 51 of the Circular "on March
13, 2019 Jervois submitted a revised non-binding LOI which …
contemplated … severance or change control payments for those
eCobalt parties terminated as a result of the transaction."
These terminations included the termination of eCobalt's CEO.
According to page 86 of the Circular: "Based on Mr. Callahan's
October 1, 2018 employment agreement, Mr. Callahan would be paid
the sum of 1.5 years of base salary ($777,594 or US$570,000) in the
event of change of control. The change of control obligation was
subsequently amended to 2 years of base salary ($1,036,792 or
US$760,000) on March 14, 2019 and was retroactively effective on
October 1, 2018." It appears the revised LOI included a gratuitous
increase in the CEO's "golden parachute" severance package.
This is surprising since page 51 of the Circular states that on
February 20, 2019, eCobalt announced it had implemented cost
control measures to preserve cash and reduced or eliminated
non-essential corporate and site activities and
costs.
On March
14, 2019, eCobalt and Jervois executed and formally entered
into the revised LOI. It is not comforting to us that page 51
of the Circular indicates that on March 14,
2019 "The eCobalt Board of Directors also established a
special committee to provide oversight to the CEO and report to the
Board of eCobalt." A mandate "to provide oversight" and to
"report to the Board" is quite far from best practices. We
believe the Special Committee should have been engaged in the
process much earlier and should have had a more robust mandate so
as to ensure that the interests of the corporation and its
shareholders were properly taken into account. In this case,
eCobalt's Special Committee was created after the proposed
transaction had been substantially negotiated and it appears the
Special Committee was mostly passive since its role was limited to
"oversight" and providing a "report". The Circular certainly
does not state that the Special Committee: (i) took any active role
in the substantive negotiations (as would be evidenced by any
substantive changes to the proposed deal after the Special
Committee was created): or (ii) conducted a robust review of the
circumstances leading to the transaction, the alternatives to the
transaction that were available in the circumstances (including the
status quo), and the transaction itself. In fact, we are
concerned the Special Committee may have taken almost no active
role. According to pages 51-52 the Circular, it appears that
after the Special Committee was created on March 14, 2019, it only met on March 29, 2019 before meeting again on
March 31, 2019 to receive the
financial advisor's fairness opinion and finalize the terms of the
definitive Arrangement Agreement, which was then approved eCobalt's
Board of Directors the next day. The Circular states that
eCobalt's Special Committee consisted of three independent
directors, being Scott Hean (Chair),
Gregory Hahn and Monique Rabideau, with Michael Callahan (CEO) also participating as a
non-voting member. We believe that Mr. Callahan should not
have been a member of the Special Committee. Our confidence
in a special committee and its process is undermined unless it is
permitted to carry out its responsibilities clearly free from any
undue influence, whether express or even implied.
8.
Process, Process, Process (Part 3): After recognizing our
concerns as described in #6 and #7 above, we were hoping to be
comforted by the Fairness Opinion that was provided to eCobalt by
its financial advisor. According to page 53 of the Circular,
the eCobalt Board requested its financial advisor to assess the
fairness, from a financial point of view, of the consideration to
be received by eCobalt Shareholders pursuant to the
Arrangement. Page 53 of the Circular states that, pursuant to
its engagement letter with financial advisor, eCobalt has agreed to
pay a fee for the financial advisor's services (irrespective of the
substance or conclusions of the Fairness Opinion). The body
of the Circular did not state whether the financial advisor's fee
was a flat fee or whether it was a success fee that is contingent
on the outcome of the proposed transaction. However, upon
reviewing the Fairness Opinion itself (found at Schedule "C" of the
Circular) it states that a portion of the fees that the financial
advisor will earn will be payable upon the delivery of the Fairness
Opinion and a portion of the fees payable by eCobalt to the
financial advisor are contingent on completion of the Arrangement
or certain other events. Therefore, it appears that eCobalt
choose to structure its contract with its fairness opinion provider
such that the provider is positioned to earn, in part, a contingent
success fee. While this is certainly legal, it is not
considered to be a best practice on the part of eCobalt due to the
theoretical conflict of interest that it creates for the financial
advisor. Importantly, we believe these circumstances
influence the weight, confidence and credence that should be placed
in the opinion. It would have been preferred by us if eCobalt
had of structured its engagements with its financial advisors such
that it obtained a fairness opinion from a financial advisor that
was only earning a flat fee and was therefore entirely
disinterested in the outcome of the proposed transaction.
Also, there are a couple of
other concerns related to the Fairness Opinion. Firstly,
related to #6 above, the Fairness Opinion expressly states that the
opinion does not address the relative merits of the Arrangement as
compared to other transactions or business strategies that might be
available to eCobalt. So, accordingly, we gain no comfort
from the Fairness Opinion in regard to our concerns described in #6
above. Secondly, the Fairness Opinion states that its
conclusion is conditional upon the completion of Jervois' royalty
sale occurring prior to the closing of the Arrangement. This
fact is also stated on page 79 of the Circular as part of the risk
disclosures. This royalty sale transaction by Jervois is a
non-dilutive fundraising transaction whereby Jervois plans to sell
a portfolio of royalties to Franco-Nevada Corporation for
$A3.6 million in cash. Jervois'
recent dilutive private placement is no substitute. This
royalty sale has not yet occurred and therefore this fact
influences a person's ability to rely upon the conclusion arrived
at in the Fairness Opinion. If the conclusion in the Fairness
Opinion is conditional upon the assumption that Jervois has
completed its non-dilutive royalty sale (along with other
assumptions) and that condition has not been met, then does the
Fairness Opinion provide any value to anyone until that condition
is met? If effectively there's no operative fairness opinion
at this time in support of the proposed Arrangement (or even when
the decision was made to enter into the Arrangement Agreement,
along with its break-fee terms and significant transaction costs)
then what were and are eCobalt's directors relying upon to comfort
themselves that the proposed significant and transformative
Arrangement transaction is in the best interests of eCobalt and
that the consideration that has been offered is fair and reasonable
in the circumstances? Are the Special Committee and eCobalt's
Board of Directors' recommendations effectively hollow? Given
the entirety of the concerns raised in #8, what is there that
eCobalt's shareholders can rely upon in regard to conducting their
own review when making a decision about approving the proposed
Arrangement?
9. The
Adequacy of eCobalt's Disclosure: Given our concerns
in #1 through #8 above, we were hoping to find sufficient
disclosure in eCobalt's 382-page Circular to allow us to make an
informed decision about the merits of the proposed Arrangement and
how we should vote. However, even though the Circular is
voluminous, it is very brief and opaque in regard to information
that addresses our concerns. Specifically:
1)
Alternative Transactions: The Circular does not address
any specific alternative transactions that were considered by
eCobalt. Not even the types of possible alternative
transactions were disclosed (for example, a rights offering, which
we believe may have been a feasible alternative, if managed
well). We believe the Circular should have disclosed the
reasoning and analysis of the Board of Directors and/or the Special
Committee in regard to the search for and the analysis of
alternative transactions (including maintaining the status quo) and
the pros and cons of each alternative (including the
Arrangement).
2) Financial
Analyses: Either the information was not considered, or
eCobalt chose not to disclose the financial analysis information
that the Special Committee or eCobalt's Board of Directors reviewed
when determining the reasonableness of the proposed Arrangement (as
compared to the alternatives) and when it made the decision to
enter into the Arrangement Agreement and recommend it to
shareholders. In regard to the Arrangement, we believe that
both analyses and comparisons of the en bloc values of both eCobalt
and Jervois would have been required in order to properly assess
the merits of the merger and determine an acceptable share exchange
ratio that should be agreed to. While a formal valuation is
not legally required to be disclosed, we believe the Circular
should have disclosed at least the valuation approach and
methodologies that were considered, including the rationale for
selecting a particular valuation methodology and a summary of the
key factors considered. For example: (A) Did the analyses
include a discounted cash flow analysis? If yes, what was the
outcome and what were the discount rates? Who provided the
forecast(s)? Was any due diligence conducted or skepticism
applied in regard to the forecast(s)? (B) Was there a
comparable companies analysis? If yes, which companies were
in the peer group for eCobalt and which companies were in the peer
group for Jervois? Which ratios or statistics were considered
important and why? (C) Was there a comparable transactions
analysis? If yes, which M&A transactions were considered
as precedent or comparable transactions? Which ratios or
statistics were considered important and why? Was an implied
control premium of 5.9% (based on the closing prices of eCobalt's
and Jervois' shares on March 29,
2019) a reasonable premium based upon the comparable
transactions analysis? The Circular contains no description
of the specific valuations, appraisal work or financial analyses
that were performed or relied upon by anyone in support of
eCobalt's decision or its Board of Directors determination to
recommend the transaction to shareholders.
3) Very
Little Emerging Market Issuer Risk Disclosure: eCobalt's
operations and business experiences have traditionally been in
the United States and
Canada. Jervois' three mineral properties are located outside
of North America and two of the
properties are located in emerging markets in Africa.
Although the Circular is voluminous, only a brief paragraph
regarding the risks related to Uganda and Tanzania appears in the Circular beginning on
page 78. We would have liked for eCobalt to disclose more
information in the Circular about the risks associated with these
circumstances with reference to the concerns identified in OSC
Staff Notice 51-719 - Emerging Markets Issuer Review. This
information would help us to understand the suitability of the
investment risk we would face as shareholders of New Jervois and
how the company is handling such circumstances.
4) No
Detailed Disclosure About the Minority Shareholder Protections Lost
as a Result of the Migration from the TSX to the TSXV:
Although the Circular does in Schedule "J" contain some disclosure
comparing the rights of eCobalt shareholders as compared to Jervois
shareholders pursuant to corporate law and otherwise, we would have
liked to have been provided with more information about the
minority shareholder protections, governance requirement
differences and continuous disclosure differences that will result
from exchanging shares of eCobalt (a TSX-listed issuer) with
Jervois (an ASX and TSXV listed issuer). These considerations
are important to us since, collectively, the current eCobalt
shareholders will all become minority shareholders of Jervois
pursuant to the proposed Arrangement.
5)
Disclosure Regarding Fees to Financial Advisors: Page 100
of the Circular states that eCobalt will incur C$1,632,000 in fees payable to its financial
advisors. As expressed above, due to the potential nature of
those payments (fixed vs contingent) and the reliance that
eCobalt's Board of Directors and Special Committee may have placed
on the advice that was provided, we believe that additional and
more specific information regarding these fees should be provided
in the Circular to help us understand the services provided as well
as the financial incentives and other circumstances that existed
regarding eCobalt's relationships with its two financial
advisors. These fees seem high to us if the financial
advisors did not procure the proposed transaction, run a structured
process to ensure that an optimal transaction and price was
proposed, and provide detailed analyses regarding the proposed
transaction and the alternatives thereto.
6) Conflicts
of Interest Disclosure: Page 78 of the Circular states that
"Certain officers and directors of eCobalt may have interests in
the eCobalt Arrangement that may be different from, or in addition
to, the interests of eCobalt Shareholders generally." We
believe that eCobalt should provide specific disclosure about the
specific officers and directors that it is referring to and should
include information regarding how eCobalt managed and assessed
these conflicts.
We observe that Mr. Callahan joined eCobalt on October 1, 2018 when there was more than
C$18.3 million in cash in eCobalt's
treasury. As of March 31, 2019,
eCobalt's cash position was C$3.1
million, which is barely enough to pay the break fee on the
proposed merger. Certainly, just enough to pay severance
packages on existing and gratuitously "modified" employment
contracts. Even given pre-existing work commitments, a
C$15.2 million reduction in cash over
6 months in a depressed metals market is a questionable burn
rate.
We understand that the current cobalt markets are depressed,
but we also understand as loyal eCobalt shareholders, the value of
the Idaho Cobalt Project. We also understand that this is a
cycle that will certainly change. The world is moving to the
electrification of vehicles utilizing cobalt bearing lithium ion
batteries. It will likely take many months, but not years,
before the Idaho Cobalt Project, with the right leadership, could
excel into a primary cobalt producer. Given the concerns we
have expressed above, we are NOT convinced that now is the right
time, with the right partner, to enter into a dilutive arrangement
effectively giving up control of eCobalt's primary asset. Our
company and the Idaho Cobalt Project have been through worse times
than this, while still being able to advance the project nearer to
production status. Successful projects such as the Idaho
Cobalt Project are rare and special, they also take time and
patience to advance to production status. eCobalt has made a
name for itself by being tenacious and determined to see the Idaho
Cobalt Project through to production. As shareholders, we are
not willing to let management give up this unique 100% owned
opportunity without a proper process and a proper financial return
– that's why we are voting "Against" the proposed
Arrangement.
Sincerely,
Paul Farquharson Rick
Honsinger"
What You Can Do
We urge shareholders to VOTE AGAINST the plan of
arrangement and all related proposals to be voted upon at the
Special Meeting. The proposed transaction requires the support of
662/3% of total votes cast at the eCobalt
Special Meeting and the deadline to vote is July 17, 2019 at 10:00 am
Pacific time.
EVEN IF YOU HAVE ALREADY VOTED ON THE PROXY CARD SENT TO YOU BY
eCOBALT, YOU CAN STILL CHANGE YOUR VOTE BY SIMPLY RECASTING YOUR
VOTE. ONLY YOUR LATEST DATED PROXY CARD WILL COUNT.
If you have any questions, or need help voting, contact
Gryphon Advisors Inc. at: 1-833-335-6118 or 1-416-661-6592 or
email inquiries@gryphonadvisors.ca. There is a team standing by
to assist you.
About First Cobalt
First Cobalt is a North American cobalt company and owner of the
only permitted primary cobalt refinery in North America. The Company is exploring a
restart of the First Cobalt Refinery in Ontario, Canada, which could produce over
5,000 tonnes of contained cobalt in sulfate per year from third
party feed. First Cobalt's main cobalt project is the Iron Creek
Cobalt Project in Idaho, USA,
which has an inferred mineral resource estimate available on the
Company's website. The Company also controls a significant land
package in the Canadian Cobalt Camp, spanning over 100
km2 which contains more than 50 past producing
mines.
On behalf of First Cobalt Corp.
Trent Mell
President & Chief Executive Officer
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.
Information in Support of Public Broadcast
Solicitation
First Cobalt is relying on the exemption under section 9.2(4) of
National Instrument 51-102 – Continuous Disclosure
Obligations ("NI 51-102") to make this public broadcast
solicitation. The following information is provided in accordance
with securities laws applicable to public broadcast
solicitations.
This press release and any solicitation made by First Cobalt in
advance of the Special Meeting is, or will be, as applicable, made
by First Cobalt and not by or on behalf of the management of
eCobalt.
First Cobalt has filed a copy of this press release containing
the information required in section 9.2(4) of NI 51-102 on
eCobalt's company profile on SEDAR at www.sedar.com. All costs
incurred for any solicitation will be borne by First Cobalt,
provided that, subject to applicable law, First Cobalt may seek
reimbursement from eCobalt of First Cobalt's out-of-pocket
expenses, including proxy solicitation expenses and legal fees,
incurred in connection with the Special Meeting. The anticipated
cost of First Cobalt's solicitation is estimated to be C$30,000 plus disbursements and customary
fees.
First Cobalt has retained Gryphon Advisors Inc. ("Gryphon") as
its proxy solicitor. Gryphon's responsibilities will principally
include providing strategic advice and advising First Cobalt with
respect to any solicitations made by or on behalf of First Cobalt
in relation to the Special Meeting. Any proxies solicited by or on
behalf of First Cobalt, including by Gryphon, may be solicited by
way of public broadcast, including through press releases, speeches
or publications and by any other manner permitted under applicable
laws. A proxy may be revoked by instrument in writing executed by a
shareholder or by their attorney authorized in writing or, if the
shareholder is a body corporate, by an officer or attorney thereof
duly authorized or by any other manner permitted by law.
First Cobalt is not currently proposing any transaction with or
involving eCobalt. However, First Cobalt has in the past proposed,
and may in the future propose, a transaction with or involving
eCobalt.
The head office of eCobalt is 1810-999 West Hastings Street,
Vancouver, British Columbia,
Canada.
Important Disclosure Information
This press release contains our current views on the value of
securities of eCobalt and Jervois. Our views are based on our own
analysis of publicly available information and assumptions we
believe to be reasonable. There can be no assurance that the
information we considered and analyzed is accurate or complete. The
actual performance and results of eCobalt and Jervois may differ
materially from our assumptions and analysis. Our views and our
holdings could change at any time. We may sell any or all of our
position or increase our exposure by purchasing additional
securities. We may take any of these or other actions regarding
eCobalt and Jervois without updating this letter or providing any
notice whatsoever of any such changes (except as otherwise required
by applicable law). The information contained above is not and
should not be construed as investment advice and does not purport
to be and does not express any opinion as to the price at which the
securities of eCobalt and Jervois may trade at any time. Investors
should make their own decisions regarding eCobalt and Jervois and
their prospects based on such investors' own review of publicly
available information. Neither First Cobalt nor any of its
affiliates accepts any liability whatsoever for any direct or
consequential loss howsoever arising, directly or indirectly, from
any use of the information contained above.
Cautionary Note Regarding Forward-Looking Statements
This letter and news release may contain forward-looking
statements and forward-looking information (together,
"forward-looking statements") within the meaning of applicable
securities laws. All statements, other than statements of
historical facts, are forward-looking statements. Generally,
forward-looking statements can be identified by the use of
terminology such as "plans", "expects", "estimates", "intends",
"anticipates", "believes" or variations of such words, or
statements that certain actions, events or results "may", "could",
"would", or "might" "occur" or "be achieved". In this press
release, forward-looking statements include, but are not limited
to, statements concerning the benefits to First Cobalt of merging
or otherwise engaging in a business transaction with eCobalt.
Forward-looking statements involve risks, uncertainties and other
factors that could cause actual results, performance and
opportunities to differ materially from those implied by such
forward-looking statements. Factors that could cause actual results
to differ materially from these forward-looking statements are set
forth in the management discussion and analysis and other
disclosures of risk factors for First Cobalt, filed on SEDAR at
www.sedar.com. Although First Cobalt believes that the information
and assumptions used in preparing the forward-looking statements
are reasonable, undue reliance should not be placed on these
statements, which only apply as of the date of this news release,
and no assurance can be given that such events will occur in the
disclosed times frames or at all. Except where required by
applicable law, First Cobalt disclaims any intention or obligation
to update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise.
SOURCE First Cobalt Corp.