MELBOURNE - Australian cobalt developer Jervois Mining said on Tuesday it has agreed to buy a Canadian cobalt explorer with operations in Uganda, as the hunt for quality mines in the battery materials sector gains pace.
Jervois, which is backed by ex-Glencore executives, is offering one of its shares for every share in M2 Cobalt, valuing the Canadian company at C$16.6 million ($12.5 million), a 4.5 percent premium at current share prices.
M2 Cobalt has tenements across a region that includes a former copper and cobalt mine run that was closed after being sold to the Ugandan government.
Jervois, which has applied for a prospecting licence in Tanzania, said the deal would complement its efforts to establish a presence in east Africa.
M2 shareholders would make up about 22 percent of the expanded company, and Jervois hoped to maintain a listing on Toronto's TSX Venture Exchange, giving it access to North American capital markets.
Jervois Chief Executive Bryce Crocker and Chairman Peter Johnston, both former executives of London-listed miner Glencore , will continue in their current roles.
Jervois is developing the Nico Young cobalt-nickel deposit in the Australian state of New South Wales.
($1 = 1.3316 Canadian dollars)
(By Melanie Burton; Editing by Richard Pullin)