The acquisitions to be reimbursed will include the recent leasing of metallurgical coal properties in Virginia holding 120 million tonnes, measured and indicated.

The facility will have a term of one year and bear interest at 10% per annum.

Under the arrangement, still subject to Toronto Stock Exchange approval and formal due diligence procedure, Cobalt will pay a $350,000 facility fee to the unnamed lender by the issuance of seven million common shares in the capital of Cobalt.

In March, the Calgary-based miner inked deals with two private firms to acquire mineral rights in the area and has closed the deal with a $700,000 payment and at $13 million promissory note at 5% per annum interest.

Cobalt’s non-arm’s length debt and the promissory will be subordinated to the facility.

The Virginia acquisition includes the 900-acre Mill Creek tract, which is reported to contain numerous coal seams and is already permitted for production and the construction of a wash plant.

Coal samples at Mill Creek used for quality analysis revealed a dry basis clean coal ash and high ash fusion temperature.