David Lenigas-led Clancy Exploration (ASX: CLY) has become another entrant to the cobalt arena after collaring key cobalt licences adjacent to Managem Group’s world-renowned Bou Azzer cobalt mine in Morocco, which has operated since the 1930s.
Clancy’s new tenements encompass 32 square kilometres, with two licences Tizi and Bou Amzil next to Managem’s cobalt mine.
The third licence Imdere is 20km north-east of Bou Azzer.
During its many years in operation, more than 50 deposits have been mined across Bou Azzer which is also prospective for nickel, silver and gold.
Since it began operations, more than 100,000t of cobalt has been produced from Bou Azzer, as well as thousands of tonnes of silver and a good amount of gold.
Current cobalt production at the mine is about 2,000tpa at an average grade of 1.3%.
As part of the acquisition, Clancy has 60 days to conduct due diligence across the licences.
Under the proposed transaction, Clancy will acquire the licences indirectly and will pay the vendors a A$25,000 exclusivity fee to carry out due diligence.
Clancy will then make further payments amounting to US$975,000 and 610 million shares to the vendors upon reaching various milestones.
The company’s chairman David Lenigas said exploration of the new tenements will begin “immediately” with an in-country exploration team already on the ground.
The dynamics for cobalt miners look good with mounting demand and tight supply driven by the lithium-ion battery sector.
Currently, cobalt mining is only just meeting demand and this has triggered the cobalt price to rise from US$22,000/t to US$91,000/t during the past two years.
However, prices are still short of the previous 2008 peak of US$115,000/t when cobalt was last in deficit.
David Lenigas’ portfolio
As part of Clancy’s move into the cobalt space, David Lenigas will transition from chairman to executive chairman to reflect his increased input.
Mr Lenigas is active in the small cap space and also heads up Pilbara-focused explorer Artemis Resources (ASX: ARV), which has exposure to several commodities including cobalt. Though, Artemis is perhaps better known for its role in the emerging Pilbara conglomerate story after it discovered numerous gold nuggets across its tenements in the region with joint venture partner Novo Resources (TSXV: NVO).
As well as Artemis, Mr Lenigas is executive chairman of UK-focused oil and gas play Doriemus (ASX: DOR), which is producing from its Lidsey and Brockham oil fields.
Mr Lenigas is also co-chairman of pot-focussed company LGC Capital, which is looking to produce up to 80,000kg of cannabis by 2020 from its investment portfolio.
LGC is working with Creso Pharma (ASX: CPH) and UK-based Baltic Beer Company on developing hemp-based alcoholic and non-alcoholic beverages.
In addition to the above companies, Mr Lenigas is co-founder and executive chairman of AfriAg plc, which is listed on London’s NEX Exchange.
AfriAg transports African fruit, vegetables and other cargo to countries around the world.
He was also sits on the board of Auroch Minerals as a non-executive director.
In addition to his current appointments, Mr Lenigas has served on the boards of many public listed companies across a variety of industries.
Prior to entering a trading halt, Clancy’s share price was at A$0.003.