Cazaly Resources’ strategy of being in the right place, at the right time with the right commodity continues with the purchase of an option to acquire the right to a 95% stake in Kaoko Kobalt copper -cobalt project in northern Namibia.
Investors welcomed the news with the ASX-listed explorer gaining as much as 21% to hit an intraday high of 5.8c in morning trade.
The project contains exploration licence EPL6667, which was granted to local Namibian owned company KDN Geo Consulting CC (KDN) last month for an initial three-year period.
Cazaly today announced it has picked up an option to purchase all the capital in Australian unlisted proprietary company Kunene North Pty Ltd which has an agreement with KDN to earn up to 95% interest in the project.
Importantly, the project abuts Celsius Resources Limited’s (ASX:CLA) Opuwo Cobalt project and hosts the probable continuation of the Opuwo cobalt-copper bearing Dolomite Ore Formation (DOF) horizon.
Celsius began exploring nearby in early 2017 and has recently stated that a maiden resource for the project is imminent. The host for the mineralisation is known as the DOF, a carbon rich, marly dolomite horizon.
A prime target for cobalt-copper mineralisation is highlighted by a 20km by 5km area of subdued magnetics, possibly due to alteration, coincident with anomalous copper-cobalt zinc-manganese uncovered from the regional soils survey at the Kamwe prospect.
“Kaoko Kobalt project ticks all the boxes,” Cazaly managing director Clive Jones said.
“It is located close to excellent infrastructure and adjoins Celsius Resources’ rapidly growing Opuwo cobalt – copper project within what appears to be a significant emerging cobalt bearing belt in Namibia.
There is no doubt that we are also experiencing a major inflection point in the demand for cobalt as cobalt prices continue to surge on the back of growing concern that future cobalt supplies may be unable to meet burgeoning demand. I look forward to updating investors as we seek to finalise this acquisition.”
In order to complete the transaction, Cazaly will be required to issue six million CAZ shares and be obligated to spend ~A$270,000 by 18 November 2020 on the project, issue 10.5 million fully paid CAZ shares once a JORC compliant resource containing at least 10,000t of contained cobalt (or other metal equivalent), and pay A$1 million (or issuing fully paid CAZ shares to that amount) upon a formal Decision to Mine.
News of the purchase comes as cobalt hits a fresh 10-year high on Friday 23rd March of US$94,500 per tonne, up 26 per cent since the beginning of the year.
Cobalt has a diverse range of metallurgical and chemical uses ranging from aircraft engines to rechargeable batteries with recent demand being driven by the requirements of the rapidly expanding electric vehicles (EV) sector. It is becoming very evident that cobalt supply is the major constraint on the growth of the battery market.