In exchange for the settlement, the company will issue 1.047 million common shares of Global Cobalt at a price of 5 cents apiece.
"This debt settlement is important for the company, as it continues the process of clearing the company's balance sheet of debt," said president and chief executive officer, Erin Chutter.
"Members of the company's Board as well as officers of the company are participants in the share for debt settlement, underscoring their confidence in the company's future."
The company said that it determined the best way to satisfy the outstanding debt was to issue shares so as to preserve cash for operations, project advancement and the consideration of potential acquisitions.
Global Cobalt is developing its advanced-stage Karakul cobalt project in Russia, but recently expanded its horizons by acquiring the Iron Creek cobalt property, giving it a foothold in the famed Idaho Cobalt Belt.
The company's chief executive says the move was borne partly from a response to concerns of shareholders, who were worried about its significant Russian exposure. As a result, it has reached out to bring in new projects, while continuing to maintain Karakul.
Global Cobalt also owns the Werner Lake cobalt property in Ontario where it recently hired consultants to complete a resource model and technical report, and is looking to bring in other projects to achieve its primary goal of becoming a consolidator in the cobalt industry.