Ausmon Resources (ASX: AOA) has secured itself a slice of the battery minerals space after executing an agreement to scoop up New Base Metals Pty Ltd and its three cobalt projects across Queensland and New South Wales.
The move is part of Ausmon’s strategy to edge into the battery minerals sector to take advantage of the growing electric vehicle market around the world.
Ausmon stated cobalt was one of the better minerals for this space, due to its projected future demand and restricted supplies.
Since April last year, the cobalt price on the London Metals Exchange has risen from US$55,000 per tonne to US$91,00/t.
The projects total 628 square kilometres and include the Broken Hill project in NSW, and Greenvale and Mount Tewoo in Queensland, which are close to Australian Mines’ (ASX: AUZ) advanced Sconi project and Aus Tin Mining’s (ASX: ANW) Mt Cobalt deposit where high-grade cobalt has been intersected.
As part of its acquisition of private entity New Base Metals, Ausmon will pay the vendor A$40,000 and carry out due diligence within 30 days.
Once electing to continue with the purchase, Ausmon will issue the vendors 35.7 million shares at A$0.007 each to raise A$250,000. Ausmon will also place almost 4.3 million shares atA$0.007 to the vendors’ nominees, which will raise about A$30,000.
Further shares will be issued to the vendors in stages once the seven outstanding exploration licences have been granted.
According to Ausmon, this will top up its cash reserves to A$1.1 million and provide funding for the company’s first year work program. However, Ausmon noted, if any of the projects warranted fast-tracking, it would explore carrying out further capital raisings.
Cobalt and nickel projects
Ausmon will undertake due diligence across the three projects to secure its 100% stake.
The Broken Hill project in NSW covers 174sq km and is in the same region as Cobalt Blue (ASX: COB) and Broken Hill Prospecting’s (ASX: BPL) Thackaringa project where the duo recently secured a US$6 million deal with battery manufacturer LG.
Over in Queensland, the Greenvale project is 276sq km of prospective land about 20km from Sconi, which is purportedly Australia’s most advanced cobalt project. One of Korea’s largest listed companies SK Innovation recently executed an offtake contract for Sconi’s anticipated initial cobalt production.
Mount Tewoo is 15km from Aus Tin Mining’s Mt Cobalt deposit and Pembroke nickel sulphide discovery.
The project encompasses 178sq km and is 25km from Gympie.
Ausmon’s share price rocketed to finished yesterday at A$0.016 – up from A$0.006 on 3 April.