New World Cobalt acquires polymetallic asset in Arizona

New World Cobalt ASX NWC Grapevine cobalt project acquisition
New World Cobalt secures 100% of Grapevine cobalt project in the US

The chase for cobalt near large-scale manufacturers and end-user markets welcomes another contender in the form of New World Cobalt (ASX: NWC) acquiring the entirety of the Grapevine cobalt, nickel and copper project in Arizona for US$100,000 in cash and shares.

The project is thought to contain high-grade cobalt based on sample results from 1941.

New World Cobalt entered into an agreement to acquire 40 mineral claims from Grapevine Resources. The total sum for the project comprises an initial cash payment of US$40,000 and the issue of US$60,000-worth of New World Cobalt shares within the next 30 days.

Grapevine Resources will retain a 1% royalty on any production within two miles of the mineral claims and will be entitled to annual payments of US$25,000 cash and US$40,000 in shares “for as long as New World Cobalt holds an interest in mineral rights within the designated project area”.

This means that Grapevine Resources will continue to earn a trickle of recurring revenues from 40 claims within the project, but to a limited extent. New World Cobalt stated it has also pegged an additional 148 mineral claims (covering a further 3,000 acres) in the project area, to which it has sole rights without any future related payments.

Another important caveat stipulated in the deal is that Grapevine Resources’ team of experienced Arizona‐based geologists and mining engineers will continue to help implement work programs at the Grapevine project at “standard commercial rates”. According to New World Cobalt, “this ensures the company is positioned to continue to efficiently implement work programs across all of its projects.”

Cobalt in the US

Grapevine is around 25km east of Prescott in central Arizona with instances of cobalt mineralisation reported in at least five of the project’s multiple historic workings which encompass more than 1.5km of strike. In total, the project covers approximately 3,800 acres.

New World Cobalt says that previous assays have recorded cobalt instances as high as 7.5%, although the junior explorer will have to complete extensive exploration activities before any kind of resource is defined.

Immediately after securing the project, New World Cobalt said it intends to undertake low‐cost, systematic geochemistry and geophysical programs over the coming months to rapidly advance its understanding of the mineralised system, with a view to bringing targets to a drill‐ready stage.

The geological sequence hosting the mineralisation is known to be of a “gabbro” type – the same rock‐type that hosts some of the world’s largest nickel-cobalt‐copper deposits, including Voisey’s Bay and Sudbury in Canada and Norilsk in Russia which raises hopes of strong exploration results over the coming months.

In late afternoon trade, New World Cobalt’s share price was 9.2% higher at A$0.095.

    Join Small Caps News

    Get notified of the latest news, interviews and stock alerts.