Ausmon Resources (ASX: AOA) has bagged two new exploration licences into its portfolio in New South Wales with a further approval for a third tenement expected imminently.
Ausmon’s subsidiary, New Base Metals Pty Ltd, was granted rights to two licences (EL 8745 and EL 8746) for a period of 6 years by the NSW Government Planning and Environment Department.
The polymetallic explorer believes it has a strong chance of striking cobalt mineralisation in both Queensland and NSW as part of an Australian-based operation to supply the battery market.
Ausmon scooped up New Base Metals and its three cobalt projects spread across two states last month as part of a concerted move to break into the battery minerals supply chain that’s currently buzzing to the tune of growing electric vehicle adoption around the globe.
According to the associated terms of the tenement grants announced today, Ausmon said it will now issue a total 7,142,856 fully paid ordinary shares to the vendor of New Base Metals in accordance with the acquisition agreement.
With two out of three license applications now granted, Ausmon says it intends to dive into exploration as soon as feasibly possible in search of cobalt mineralisation with its eyes firmly on the third approval of licence EL5639 which will ultimately form the crux of the Broken Hill cobalt-nickel project in far-west NSW.
Testing for progress
The target areas have never been tested for cobalt which means early geochemical surveys and initial assay results could prove to be pivotal for Ausmon’s near-term future (and market valuation). Today’s news saw the company’s share price jump 30% higher up to $0.013 per share.
Ausmon said that its first assay results would assist in formulating its broader exploration plans in the region and added that an airborne survey is also planned to delineate any prospective “cobaltiferous pyrite horizons” on the tenement currently awaiting approval (ELA 5639).
Drilling is expected to commence within a few weeks of the tenement being granted.
The Broken Hill project is near the Thackaringa cobalt project where Cobalt Blue Holdings recently announced a major cobalt resource upgrade as well as a partnership with multinational conglomerate LG International.
Recent exploration done by Cobalt Blue has demonstrated that the Broken Hill region is highly prospective for high-grade cobalt deposits which gives Ausmon an encouraging working background.
Ausmon’s market strategy is based on carrying out exploration within its four existing exploration licences in NSW with the addition of 2 new licences announced today. Assuming it receives its final licence grant, its total of 7 licences could enable the explorational junior to move into further exploration and firm assessments of cobalt prospectivity.
The company also said that as exploration expands with increasing funding requirements, it may consider farming out part of its current interests in the granted licences to farm-in joint-venture partners to contribute to the costs of the exploration programs as part of a “prudent risk management strategy”.
The other prong of its exploration strategy is to onboard additional polymetallic assets into its portfolio with overseas resources projects also being considered, according to Ausmon.
The explorer did say however that it “may have to raise further new capital, debt or equity” including the issuance of new shares, to proceed with future acquisitions.