Cazaly Resources is seeking to acquire an 85 per cent stake in a highly prospective copper-cobalt project in Namibia.
The Tsumkwe project – located in north eastern Namibia 750km by road from the capital of Windhoek – consists of a single exploration licence granted to Namibia-owned company Gemco Investments in August 2017 for an initial three-year period.
Cazaly has secured a 4-month option to acquire 85 per cent stake in the project with Gemco.
The project – which covers an area of 200 square kilometres –was previously owned by Mount Burgess Mining and has only been lightly explored in the past.
Mount Burgess conducted some base metals and rare earth exploration in 2011, announcing a significant cobalt result from drilling of a strong magnetic anomaly.
First hole into the anomaly was drilled to 110 metres and returned an intercept of 71 metres at 0.38 per cent cobalt from 10 to 81 metres (analyses did not extend past 81m) and a coincident intercept of gallium from 37 to 81m of 45m at 17.11g/t gallium.
However, Cazaly are unsure whether the results- taken from an XRF analyser – were ever verified at the lab.
Meanwhile, an infill soil geochemical survey conducted by Mount Burgess found a coincident copper-cobalt anomaly – located around 3km to the south west of the drill intercept – covering a strike length of 3km with cobalt values in the range of 500 to 690 parts per million and copper from 120 to 160ppm.
As part of its due diligence, Cazaly will verify the cobalt gallium intercept by twinning the drillhole as well as drill the extensive copper-cobalt anomaly named Makuri Vlei.
“Cazaly are currently in the process of engaging local consultants with a view to kick-off due diligence on the project early in the new year,” Cazaly managing director Nathan McMahon said.
Cazaly has paid Gemco US$60,000 for a 4-month exclusive option and due diligence period. It can then elect to take the 85 per cent stake by paying US$650,000 cash and issuing US$250,000 worth of Cazaly stock, subject to shareholder approval.
Cobalt has witnessed a surge in price this year thanks to strong demand for rechargeable batteries with demand forecast to continue to increase as batteries are increasingly adopted in households and vehicles.
Gallium demand has grown as demand for hand-held and communication electronics, particularly smart phones, has increased in recent times and accounts for approximately three-quarters of demand.
Shares in Cazaly have soared 72 per cent or 3.1c to 7.4c by 11:55am AEDT.