Cobalt 27 adds Aussie cobalt, scandium royalties to portfolio

Cobalt 27 Capital Corp. [KBLT-TSXV, 270-FSE], owner of the world’s largest stockpile of cobalt, said Monday May 7 that it has agreed to acquire a 1.5% gross revenue royalty on the Flemington cobalt-scandium-nickel project.

The project is located 370 km west of Sydney, New South Wales, Australia and held under option by Australian Mines Ltd. [AUZ-ASX].

“Large-scale nickel cobalt deposits such as the Flemington Project represent important, undeveloped sources of cobalt and nickel. With ongoing geopolitical uncertainty in the DRC [Democratic Republic of Congo], which accounts for approximately 65% of current global mined cobalt output, this Australian project provides development targets in politically stable, mining-friendly jurisdiction,” said Cobalt 27 Chairman and CEO Anthony Milewski.

“While management’s priority and principal focus is on securing cobalt streaming transactions, we continue to opportunistically purchase cobalt royalties as opportunities present themselves,” he said.

Cobalt 27 is setting itself up as an investment proxy on the electric vehicle revolution by offering investors pure play exposure to cobalt.

But rather than mine cobalt directly out of the ground, Milewski and his partners decided to take a different approach. In addition to owning 2,982 tonnes of physical cobalt, the company has opted to invest in a cobalt-focused portfolio of streams, royalties and direct interests in mineral properties containing cobalt.

Cobalt also said Monday it has agreed to acquire a 1.7% gross revenue royalty on the fully-permitted and construction-ready Nyngan scandium project. The Nyngan Project is owned by Scandium International Mining Corp. [SCY-TSX, SCYYF-OTC] and is located 500 km northwest of Sydney, 25 km west of the town of Nyngan. Outside existing by-product production in Russia and China, the Nyngan Project is the most advanced scandium development opportunity globally, with initial off-take contracts in place, the company said in a press release.

The Flemington Project hosts a maiden cobalt resource of 2.7 million tonnes at 0.101% of (1.010 ppm) cobalt with only 1% of the project area tested up to October, 2017.

SRK Consultants concluded in the October, 2017 maiden mineral resource estimate that mineralization underlying the Flemington Project is the direct continuation of CleanTeQ Holdings Ltd.‘s [CLQ-TSX, CTEQF-OTC] Sunrise Project, which holds one of the highest grade and largest nickel and cobalt deposits outside Africa.

Australian Mines is fast-tracking development of the Flemington cobalt-scandium-nickel project with an updated mineral resource in 2019 and pre-feasibility study scheduled to commence thereafter.

Cobalt 27 acquired the Flemington and Nyngan royalties from Jervois Mining Ltd. [JRV-ASX] for US$4.5 million, comprised of US$1.5 million in cash and US$3.0 million in common shares of Cobalt 27.

On Monday, Cobalt 27 shares eased 1.68% or $0.21 to $12.28. The 52-week range is $14 and $7.42.

Cobalt 27 recently acquired a 1.75% net smelter royalty on all future production of all metals from the Dumont nickel-cobalt project in the Abitibi region of Quebec.

Held by RNC Minerals [RNX-TSX], the Dumont Project contains the world’s largest undeveloped, permitted and construction-ready reserves of nickel and cobalt. Production is expected to commence in 2020.