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Global Cobalt And IMHL Lock Up Spinoff Agreement

|Includes: Global Cobalt Corp (GLBCF)

Global Cobalt (TSX-V:GCO) (OTCPK:GLBCF) and its largest shareholder, Imperial Mining Holding Limited ("IMHL") have agreed to terms on a binding agreement to spin off certain North American mineral exploration projects to a newly incorporated company ("SpinCo").

Under the agreement, first disclosed on April 9, Global Cobalt plans to split its Russian and North American operations forming two separately listed companies as part of a major reorganization.

As a condition of the terms, IMHL, which currently owns 27.8 percent of Global Cobalt's issued share capital, and its affiliates have agreed to waive their rights to receive common shares, warrants and/or options in SpinCo.

"We are pleased that IMHL has agreed to endorse and vote in favour of the Plan of Arrangement. This support brings us one step closer to achieving our vision of creating a strong and viable global energy metals focused company for our shareholders, partners and investment community, while continuing to provide exposure to the Karakul and Satellite projects for shareholders," said Global Cobalt's CEO Erin Chutter.

Under the agreement, shareholders, other than those held directly and indirectly by IMHL, will receive shares in the new company on a 1:1 basis to their Global Cobalt holdings prior to the close of the Transaction date.

The spinout company would focus on M&A and Project Development in Battery Metals Projects such as their Iron Creek and Werner Lake projects while Global Cobalt will focus on the Karakul and the Altai Satellite projects in Russia.

Global Cobalt's Werner Lake property (the "Ontario Property") and the Iron Creek property (the "Idaho Property") and associated technical data will be transferred to SpinCo in consideration for common shares of SpinCo having a market value equal to the aggregate value of the Ontario Property and the Idaho Property.

In addition, under the binding agreement terms, Global Cobalt will acquire a significant interest in a qualifying mineral property, meeting the TSX-V initial listing requirements for a Tier II mining issuer and obtain a NI 43-101 compliant technical report thereon should Karakul not meet these requirements.

In 2014, Global Cobalt acquired the Iron Creek cobalt property in Idaho to gain a foothold in the famed Idaho Cobalt Belt as some investors had expressed concerns about its significant Russian exposure. As a result, it has reached out to bring in new projects, while continuing to maintain Karakul.

The proposed spinoff company should please those investors worried about perceived Russian risk, which would create difficulty in accessing funds because of the current geopolitical environment.

After months completing a 45-hole drilling campaign at Karakul, the company delivered a strong NI 43-101 technical report for the project, after the maiden compliant resource showed larger-than-expected tonnages in both the indicated and inferred categories.

Global Cobalt has focused on becoming a consolidator in the cobalt market, prioritizing development funding at the project level, not just at the corporate level, to minimize shareholder dilution while rebuilding value.