Mr. Mike Crowder reports
COBALT COAL LTD. ANNOUNCES CLOSING OF VIRGINIA PROPERTY ACQUISITIONS
Cobalt Coal Ltd. has closed the Virginia property acquisitions as previously disclosed in Cobalt's news releases of March 8, 2012, July 11, 2012, July 17, 2012, Nov. 19, 2012, and Nov. 20, 2012.
The property acquisitions involve the acquisition of metallurgical-coal-bearing leases in Virginia, United States, which were the subject of the National Instrument 43-101-compliant technical report entitled "Resource and Reserve Evaluation Including Pre-Feasibility Study, Steinman/ACIN Leases, Dickenson County, Commonwealth of Virginia, USA," which Cobalt filed on SEDAR on Nov. 19, 2012.
One of the tracts associated with the property acquisitions, the Mill Creek tract, is permitted for production and has received approval to allow for the construction of a coal preparation (wash) plant.
In connection with the closing of the property acquisitions, Cobalt received a loan of $700,000 from a non-arm's-length party which was used to finance the amount payable at closing. Additionally, the closing particulars are summarized as follows:
A payment of $700,000 was made to the vendors in connection with
- A promissory note in the amount of $13.25-million was granted to the
vendors on today's date that bears interest at a rate of 5 per cent per annum.
The promissory note is required to be repaid as:
- $1-million on or before Dec. 18, 2013;
- $5,625,000 on or before Dec. 18, 2014;
- $6,625,000 on or before Dec. 18, 2015;
- As part of the property acquisitions, Cobalt has committed to:
- Drill five test holes to additionally evaluate the coal-bearing strata
on the leased lands by July 31, 2013;
- Spend a minimum of $500,000 on mine improvements on the Mill Creek
tract before July 31, 2012, with a minimum of $250,000 having been
spent before May 31, 2013.
Additionally, Cobalt has committed to pay a finder's fee of $586,000 (U.S.) to an arm's-length party in connection with the property acquisitions, $136,000 (U.S.) of the finder's fee will be paid in cash and $450,000 (U.S.) will be paid in common shares in the capital of Cobalt to be issued at a deemed price of five cents per share. The payment of the finder's fee is subject to TSX Venture Exchange approval.
We seek Safe Harbor.
© 2014 Canjex Publishing Ltd. All rights reserved.