Global Cobalt (CVE:GCO) (OTCBB:GLBCF) has offered a settlement to Imperial Mining to amend the current option agreement between the two parties, which would give the company a clean balance sheet and continued access to the Karakul project in Russia.
The terms of the deal include a settlement of the amount outstanding on the exploration expenses owed to Global Cobalt, as an offset for the current outstanding loan amount owed to Imperial Mining.
Global Cobalt said that details of the offer, including consideration, are currently under discussion.
"We are very pleased with the spirit of cooperation with IMHL on these matters and look forward to continued partnership," said president and chief executive officer of Global Cobalt, Erin Chutter.
Earlier this month, Global Cobalt granted an extension to the standstill agreement with Imperial Mining (IMHL) announced last November. The agreement was with respect to Global Cobalt's option deal to acquire a 100 percent interest in the Karakul cobalt property in Russia, with the standstill put in place so as to allow time for Imperial to resolve internal title issues.
The standstill remains in effect until at least March 31st in order for IMHL to engage in settlement negotiations for Karakul's title.
As per the terms of the option deal signed in 2013, Global Cobalt is required to make staged exploration payments of at least US$15 million on the properties by December 30 this year, in order to earn its initial 74.9 percent interest.
The company said the settlement offer will remain in place until February 28.
Global Cobalt spent months completing a 45-hole drilling campaign at Karakul, and last summer surprised even management with the strength of the NI 43-101 technical report, after the maiden compliant resource showed larger-than-expected tonnages in both the indicated and inferred categories on the historic project.