Announcement of Intention to Publish a Registration Document and Expected Intention to Float on the Main Market of the London Stock Exchange
Cobalt Holdings plc, a company created primarily to purchase and hold physical cobalt and the only company offering public equity investors pure-play direct exposure to the price of cobalt, today announces its intention to raise approximately US$230 million through its Global Offer and the possible admission of its Ordinary Shares to the Equity Shares category of the Official List of the Financial Conduct Authority and trading on the Main Market for listed securities of the London Stock Exchange plc. Admission is expected to occur in June 2025.
Cobalt Holdings Highlights:
· Cobalt Holdings will be the only company offering public equity investors pure-play exposure to cobalt, a “Strategic Raw Material”, without the direct risks and liabilities associated with cobalt exploration, development or mining operations
· Current oversupply in the cobalt market presents a significant opportunity to acquire cobalt below long-term average prices, with demand expected to increase from multiple end-use industrial applications such as the production of high-performance batteries: a core component of electric vehicles (“EVs”), portable electronics and energy storage systems (“ESS”)
· Glencore International AG (“Glencore”) and certain entities and affiliates managed by Anchorage Structured Commodities Advisor, L.P. (together, “Anchorage”), have agreed to participate as cornerstone investors, agreeing to invest, in aggregate, an amount representing approximately 20.5% of the Shares to be offered pursuant to the Global Offer
· Six-year supply contract secured with Glencore, providing guaranteed supply of premium-grade cobalt worth up to US$1 billion and a further supply contract to acquire up to 1,500 tonnes of cobalt from Anchorage in 2031
· Initial $200 million purchase of 6,000 tonnes of cobalt from Glencore at a discount to today’s spot price[i]
· Led by a high quality, experienced management team and board of directors (the “Board”), including Jake Greenberg, the CEO, who was part of the founding team of Yellow Cake plc
· Outsourced, low-cost operating model to maximise efficiency for investors
Jake Greenberg, CEO of Cobalt Holdings, said:
“Our strategy is simple: to provide equity investors with direct, pure-play exposure to the price of cobalt through a low-risk, low-cost business model that sees us buying physical cobalt and holding it for the long-term.
We believe NOW is the right time to build a strategic stockpile of cobalt. The long-term price of cobalt has historically been well above the prevailing spot price. The DRC has begun to impose export restrictions, reducing metal supply, while demand for cobalt more than doubled between 2015 and 2024, and is expected to rise by more than 54% between 2024 and 2031, primarily on the back of accelerating EV battery demand growth.
This year, Cobalt Holdings will acquire 6,000 tonnes of cobalt, equating to approximately 33% of the cobalt surplus supply in 2025, according to Benchmark Mineral Intelligence. We anticipate that supply and demand will come back into balance over the coming years and will create the necessary conditions to incentivise investment in new mines and refining capacity in the West, all of which are essential to deliver the energy transition.
We are delighted to have received the support of Glencore and Anchorage as cornerstone investors. Having two cobalt market experts partnering with us is a great validation of the merits of our strategy, timing, and business model.”
Company Highlights
Cobalt Holdings is the only company offering public equity investors pure-play exposure to cobalt, a “Strategic Raw Material”, with demand expected to increase from multiple end-use industrial applications
· Following completion of the Global Offer, the Company would be the only listed company in the world offering public equity investors direct exposure to cobalt prices, given that a majority of cobalt is produced as a by-product of the extraction of mostly copper and nickel.
· Cobalt is an energy transition and technology-enabling metal used extensively in electronic devices and renewable energy storage. As a result, cobalt is an element that is critical to the global energy transition and has been recognised by the European Union as a “Strategic Raw Material” in accordance with the CRMA adopted by the European Council on 18 March 2024.
· From 2015 to 2024, global cobalt demand more than doubled, increasing from approximately 94,000 tonnes to 239,000 tonnes per annum. Looking forward, Benchmark Minerals forecasts global cobalt demand to rise more sharply to 369,480 tonnes by 2031.
· Whilst cobalt has multiple end-use applications, its key use is in the production of high-performance batteries, a core component of EVs, portable electronic devices and energy storage systems, as cobalt is known to significantly enhance the stability and performance of batteries. Its key beneficial qualities include a high melting point (thermal stability), ferromagnetism, as well as resistance to oxidation and corrosion.
Significant opportunity given the cobalt market is currently in oversupply, with cobalt prices below long-term averages
· The cobalt market has seen a significant ramp-up in supply from Indonesia and the Democratic Republic of Congo (“DRC”). Benchmark Minerals estimates 2024 global mined supply at 253,689[ii] tonnes and 2024 global refined supply at 221,868 tonnes. While global cobalt supply is expected to continue to rise from increased mining globally, Benchmark Minerals forecasts rising global cobalt demand on the back of EV battery needs to ultimately outpace supply and drive a widening deficit long-term. Benchmark Minerals forecasts the emergence of a cobalt supply deficit of 22,649 tonnes by 2033 expanding to 45,756 tonnes by 2035.
· The long-term price of cobalt has historically been well above the prevailing spot price.
· Jake Greenberg, the current sole director of the Company (the “Director”), believes that now is an opportune time to purchase cobalt when cobalt is trading below long-term average prices, providing investors with exposure to the cobalt price as the market is expected to turn from oversupply to deficit in the coming years.
· The Company’s Initial Purchase of 6,000 tonnes accounts for approximately 33% of the 2025 forecast surplus, according to Benchmark Mineral Intelligence.
· The Directors believe that supply and demand will come back into balance over the coming years and will create the necessary conditions to incentivise investment in new mines and refining capacity in the West.
Six-year supply contract secured with Glencore, providing guaranteed supply of premium-grade cobalt worth up to US$1 billion, with additional up to 1,500 tonnes of supply agreed with Anchorage for 2031
· The Company has entered into an agreement for the sale and purchase of cobalt with Glencore (the “Glencore Supply Contract”), pursuant to which the Company will purchase an initial quantity of cobalt worth US$200 million (the “Initial Purchase”) and will have the right to make five annual subsequent purchases of US$160 million (the “Subsequent Purchases”), providing the Company with access to up to US$1 billion of cobalt.
· The Initial Purchase of 6,000 tonnes of cobalt from Glencore will be at a discount to today’s spot price. i
· The Company has the right to purchase cobalt from third parties once the Company has completed the Initial Purchase and satisfied its annual amount under the Subsequent Purchases, though Glencore has a right of first refusal to sell any such additional quantities to the Company.
· As one of the world’s leading industrial producers and traders of cobalt, Glencore is an ideal counterparty for the Company. As the contract is with Glencore’s marketing arm, the cobalt will be sourced from multiple suppliers of cobalt, reducing any exposure to individual assets.
· The Company will only accept delivery of brands of cobalt which the London Metal Exchange has approved, or are constituents of the Fastmarkets cobalt index, in order to ensure quality, liquidity, and sustainability of supply. Glencore also undertakes audits to demonstrate responsible sourcing practices and transparency across the supply chain.
· The Company also has an agreement with Anchorage, for Anchorage to supply a further up to 1,500 tonnes of cobalt to the Company in 2031 (the “Anchorage Supply Contract”).
The Company provides investors with exposure to cobalt without the direct risks and liabilities associated with cobalt exploration, development or mining operations
· Nearly all other public companies that provide equity investors with exposure to the price of cobalt in some form also expose investors to direct exploration, development and operational risks associated with mining and refining operations.
· As the Company has been created primarily to purchase and hold cobalt for the long-term, it is not involved in, nor does it control, the operational decisions relating to the mining or production of cobalt, cobalt mining projects or cobalt exploration efforts. The Company is, therefore, not directly exposed to the risks faced by mining operations or cobalt refining companies.
· The Company has committed to store its cobalt in secure facilities located in Belgium, Netherlands, Singapore and South Korea, reducing geopolitical risk.
· The Company also has stock only insurance which covers all interests, primarily metals, handled by the Company during their business operations or in their care, custody, or control.
Led by a high quality, experienced management team and Board
· The Company’s management team has decades of combined commodities, trading and financing experience.
· Jake Greenberg, Chief Executive Officer of the Company, was part of the founding team of Yellow Cake plc, a publicly listed company that focuses on buying and holding physical uranium, aiming to realise returns on investment through the appreciation of its uranium holding and which has seen a material increase in value since its AIM IPO in 2018. Jake is also a founding member of 308 Services, an advisory company to Yellow Cake plc.
· David Haughie, Chief Financial Officer of the Company, was a Managing Director and Head of Principal Investments for Mercuria Energy Group, from which he brings a significant global network across upstream, midstream, and downstream (wholesale) energy and mining.
· In addition, the Company has entered into a services agreement with Cobalt Metal Management (“CMM”), an advisory company led by a management team who are highly experienced in both financial and commodity markets. Pursuant to the services agreement, CMM will, at the Company’s request, advise the Company on and arrange cobalt acquisitions, sales and storage contracts, and will, at all times, monitor the market to identify such opportunities for consideration by the Directors. CMM will always act at the direction of the Board. The CMM team also has significant experience in commodities trading and logistics. The CMM team includes Peter Sugarman, who has approximately three decades of experience in the financial services industry, and Gonzalo Cuadra, who has more than three decades of experience in the metals market.
· The Board comprises, as at the date of this announcement, Jake Greenberg as the sole director. Each of Josephine Bush, Andreas Hansson, Nicolaos Paraskevas and Sarah Maryssael will be appointed to the board ahead of Admission. In accordance with the UK Corporate Governance Code, on Admission, the Board will be predominantly comprised of independent non-executive directors. The proposed Board brings extensive corporate and commercial expertise across financial matters, commodities, prior UK public company experience, and a diversity of backgrounds and perspectives.
Outsourced, low-cost operating model to maximise efficiency
· The Company’s management team is deliberately lean in order to minimise corporate overhead costs and to maximise efficiency and returns for investors.
· In order to maintain the low-cost management structure, the Company has entered into commercial agreements with: (i) CMM, to provide operational and technical advice regarding, inter alia, commodity pricing and logistics in relation to the cobalt acquisitions, sales and storage contracts (ii) Pacorini and Steinweg-Handelsveem B.V., for the provision of storage in warehouses located in Belgium, Netherlands, Singapore and/or South Korea, and (iii) Glencore and Anchorage, for the supply of cobalt.
Cornerstone Investor Agreements
Cobalt Holdings has entered into cornerstone agreements with each of Glencore and Anchorage, as well as certain side agreements as detailed below:
· Glencore has agreed to participate as a cornerstone investor, investing approximately US$24.3 million, equivalent to an approximately 10% stake in the Company following Admission.
· Anchorage has agreed to participate as a cornerstone investor, investing approximately US$23 million, equivalent to an approximately 9.5% stake in the Company following Admission.
· Additionally, the Company and Anchorage have agreed to agree and execute documentation for Anchorage to provide a NAV correction facility, whereby Anchorage will provide the Company with debt financing of up to $23 million on an as-needed basis to allow the Company to repurchase the Company’s shares, if the Company’s shares trade at a 5% or greater discount to the inventory value of the cobalt held by the Company.
· In connection with the NAV correction facility, the Company has agreed to issue warrants to Anchorage exercisable over a further 9,000,000 Shares, exercisable at a 20% premium to the Global Offer issue price for a period of two years from Admission.
· In addition, the Company and Anchorage have also agreed to agree and execute the documentation pursuant to which Anchorage shall provide a loan for up to the aggregate purchase price under the Anchorage Supply Contract to be drawn by the Company at its discretion, on an as-needed basis to fund its purchase of cobalt under the Anchorage Supply Contract in 2031.
Potential Global Offer highlights
Should Cobalt Holdings proceed with the Global Offer, the current expectation is that:
· the Company’s shares would be admitted to the Equity Shares (Commercial Companies) category of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange;
· the Global Offer would be a targeted offering to institutional investors outside of the United States pursuant to Regulation S and to QIBs in the United States pursuant to Rule 144A under the United States Securities Act of 1933 (the “Securities Act”), alongside an offering to retail investors in the United Kingdom by RetailBook through its network of retail brokers, wealth managers and investment platforms;
· any additional details in relation to the Global Offer, together with any changes to corporate governance arrangements, would be disclosed in a Confirmation of the Intention to Float announcement and/or the prospectus, if and when published; and
· the Company has engaged Citigroup Global Markets Limited (“Citi”) as Sole Sponsor, Sole Global Co-ordinator, and Joint Bookrunner, and Canaccord Genuity Limited as Joint Bookrunner in the event the Company proceeds with the Global Offer.
For more information, please visit www.cobaltholdingsplc.com or contact the following:
Cobalt Holdings plc
Jake Greenberg, Chief Executive Officer
David Haughie, Chief Financial Officer
