Australian Mines (ASX: AUZ) has firmed up numerous exploration targets after a helicopter-borne electromagnetic survey identified a cluster of anomalies at its wholly-owned Thackaringa cobalt project in New South Wales.
The company’s Thackaringa project adjoins Cobalt Blue’s (ASX: COB) own Thackaringa project, which returned a thick drill intersection in December last year of 72m grading 0.11% cobalt. A JORC-compliant resource upgrade for Cobalt’s Thackaringa is due early next month.
At an earlier exploration stage than Cobalt Blue, Australian Mines’ helicopter-borne survey discovered 18 anomalies, with a consulting geophysicist pegging more than half of the anomalies for further ground investigation.
A high-resolution fixed loop electromagnetic survey has begun over the priority one targets, with a detailed surface sampling program underway across the entire landholding.
Australian Mines claims it is “acutely aware” that even small anomalies identified from the helicopter-borne survey could translate into “significant ore bodies”.
The company anticipates it will have the results from the fixed loop electromagnetic survey by May, with soil and surface sampling assays due by June.
A maiden drilling program for Thackaringa has been pencilled in for July. However, this is subject to Australian Mines gaining requisite landholder approvals.
Australian Mines managing director Benjamin Bell said with the company’s flagship Sconi cobalt, nickel and scandium project locked-in with a 100% offtake agreement covering cobalt and nickel, it has freed the company up to evaluate its other projects.
Sconi cobalt, nickel and scandium project
Australian Mines emerged from a trading halt in late February with news it had clinched a binding offtake agreement with global lithium-ion battery manufacturer SK Innovation for 100% of its expected cobalt and nickel production from Sconi.
For an initial sever year term, Korean-based SK Innovation has agreed to purchase all of Sconi’s annual cobalt production at 12,000 tonnes per annum. SK Innovation will also take 60,000tpa of nickel sulphate from Sconi.
The agreement also allows for a six-year extension.
SK Innovation will take delivery of the ore based on the preceding quarter’s average trading price on the London Metals Exchange.
The price will be adjusted in accordance with grade and impurities.
According to Australian Mines, should SK Innovation elect to purchase up to 19.9% of Australian Mines’ ordinary shares, then it would be eligible for a “modest commercial-in-confidence buyer discount on the base price”.
Subject to requisite approvals, the agreement between Australian Mines and SK Innovation is also dependent on Australian Mines securing the cash to develop Sconi by the end of the year, with mining to begin by the end of 2020.
Australian Mines’ stock price had risen almost 5% by early afternoon trade to A$0.11.