Upon completion of the deal, which has been approved by both boards, existing Jervois shareholders will own 77.9% of the new company while 22.1% will be owned by current M2 Cobalt shareholders.

In late 2017, the company completed a board and management transformation with a focus on battery metals. Demand for electric vehicles (EV) continues to grow, with cobalt and nickel forming critical components of the cathodes in lithium ion batteries used in such vehicles.

Jervois’ senior management includes a number of former Glencore and Xstrata executives, including its chief executive officer Bryce Crocker, chairman Peter Johnston, non-executive directors Brian Kennedy and Michael Rodriguez, and group manager David Selfe. After the transaction,

the new entity’s board will comprise three directors from Jervois and one from M2 Cobalt. Crocker and Johnston will remain in their respective roles as CEO and chairman.

Jervois’ core project is the 100%-owned Nico Young nickel-cobalt laterite deposit in New South Wales, Australia, which is in the pre-feasibility stage. The company is in discussions with investment and offtake partners for Nico Young.

Jervois has also applied for a prospecting license for the Kabanga Nickel project in Tanzania, and has a 4.54% interest in eCobalt Solutions, a Toronto Stock Exchange-listed primary cobalt developer in Idaho, the United States.

But the company has turned its sights on East Africa, where M2 Cobalt has 100% ownership of properties in Uganda. It has five exploration licenses along the strike of the historical Kilembe mine, which Falconbridge operated for over 20 years between 1956 and 1977.

Falconbridge, the Canadian base metals company subsequently purchased by Xstrata in 2006, sold the mine to the Ugandan government during the political instability of the 1970s and the operation has since been closed.

M2 Cobalt also controls the Bujagali project, which consists of six exploration licenses in south central Uganda including Democratic Republic of Congo-style mineralization with copper-cobalt anomalies.

“Jervois has reviewed a significant number of investment opportunities in cobalt globally and is enthusiastic regarding the exploration potential of M2 Cobalt’s portfolio of tenements,” the company said.

“Uganda has a continuation of geological trends from neighboring DRC, as well as a history of copper-cobalt production, but with greater political and regulatory stability,” it added.

The new entity will retain a primary listing on the Australian Securities Exchange, where Melbourne-based Jervois is currently listed, and will also list on TSX Venture Exchange, where M2 Cobalt shares currently trade.

Cobalt prices soared after the EVs story gained ground but have moderated since. With suppliers eager to destock amid limited buying appetite from consumers in Europe, Fastmarkets MB assessed the price of standard-grade cobalt, in-warehouse Rotterdam, at $19-21.40 per lb on Wednesday January 23, down 25.7% from the end of December and 37.5% from the end of November. The latest price level is also at the lowest since February 2017.