Taruga Gold (ASX: TAR) has broken into the cobalt space after agreeing to acquire a 60% stake into several projects believed prospective for cobalt and copper in the Democratic Republic of Congo.
The acquisitions were identified with known experts Klaus Eckhof and Mark Gasson acting as strategic consultants.
With the assistance of Mr Eckhof and Gasson, Taruga executed an agreement with a consortium that includes the Government of Lualaba Province and local company Mint-Master.
Under the agreement, Taruga has the right to earn 60% in the Mwilu and Kamilombe cobalt and copper projects, which are within the Kolwezi mining district.
Mwilu is about 3.36 square kilometres and, according to Taruga, a number of artisanal miners have extracted cobalt from the area at shallow levels.
Meanwhile, Kamilombe encompasses 2.37sq km and has been subjected to similar artisanal mining.
Historic drilling at Kamilombe returned 46.8m grading 2% cobalt, 32.2m grading 3% cobalt and 33.6m grading 2% cobalt.
The agreement includes a six-month due diligence period and Taruga plans to carry out its own drilling to enhance its knowledge of the mineralisation.
Prior to executing the agreement, Taruga’s channel samples from the artisanal workings returned up to 13% cobalt.
Taruga also has the first right of refusal to assess and develop any of the consortium’s other cobalt and copper licences.
The initial terms for the acquisitions includes a US$150,000 payment. After due diligence, and Taruga’s election to proceed with the purchase, then Taruga will pay the consortium US$2 million and fund exploration through to the completion of a bankable feasibility study.
As well as the abovementioned projects, Taruga has entered an option agreement with Madini to secure a 70% interest in a further four copper and cobalt licences in the area, plus a 100% equity in another tenement, with the combined landholding totalling 116sq km.
In return for the 70% interest in the four Madini tenements, Taruga will pay US$117,000 in cash and US$117,000 in shares, with an aggregate total of US$780,000 upon completion of due diligence and a decision to proceed with the purchase.
For the 100% equity in Madini’s other tenement, Taruga will pay US$100,000 after a 60-day due diligence period for an initial 65% stake. Further payments will be required upon completion of milestones for Taruga to achieve 100% ownership.
All of the tenements are situated within the DRC’s central African copper belt.
To fund the acquisitions and exploration, Taruga has announced its intent to raise A$1.35 million through the placement of 13.5 million shares at A$0.10 each.
The agreements remain subject to shareholder approvals and satisfactory due diligence.
Taruga’s stock price shot up 188% in trade to hit A$0.36 by late afternoon.