Cobalt 27 has agreed to acquire the remaining shares it does not already own in Highlands Pacific to increase its exposure to the Ramu nickel-cobalt mine in Papua New Guinea.
The Canadian battery minerals company formerly held the largest interest in Brisbane-based Highlands Pacific, with around 13 per cent.
Highlands Pacific said in an ASX statement that the acquisition had gone through “a long delay” and that it had made “a prolonged effort to close the streaming transaction” announced during May last year.
The company required formal approval from joint venture partners Metallurgical Corporation of China (MCC), Mineral Resources Ramu and Mineral Resources Madang, which has now been received.
MCC, Ramu’s lender and operator, holds a majority 85 per cent stake in the mine, and is considering a $US1.5 billion ($2.09 billion) expansion.
Highlands Pacific forecast Ramu to produce 3300 tonnes of cobalt and 34,000 tonnes of nickel in concentrate last year. The mine is now achieving record production rates, with the potential to deliver a mine life of over 30 years.
Cobalt 27 will receive a higher interest in Ramu, up from 8.56 per cent to 11.3 per cent, upon loan repayments to MCC.
Another primary Highlands Pacific asset is a 20 per cent interest in the Frieda River copper-gold project in Papua New Guinea.
Through the agreement, Highlands shareholders will receive a 44 per cent premium from Cobalt 27 over its closing price (7.3 cents) on December 24, 2018, implying an equity value of around $115 million.
Highlands’ largest shareholders plan to vote in favour of the acquisition “in the absence of a superior proposal”.