Northern Cobalt (ASX: N27) has scooped up highly prospective gold ground in Alaska, with this latest acquisition for brownfields tenements surrounding Northern Star Resources’ (ASX: NST) high-grade Pogo project which has produced more than 4 million ounces of the precious metal.
The company revealed today it has entered a US$20 million binding agreement with TSX-listed Millrock Resources to earn up to 80% of the brownfields Goodpaster project, which is along strike of Northern Star’s own Goodpaster discovery and has been described as “outstanding” by executive chairman Bill Beament.
Speaking with Small Caps about Northern Cobalt’s Goodpaster acquisition and its proximity to Northern Star’s discovery founding director and newly installed managing director Duncan Chessell said it was a “super exciting” acquisition.
Mr Chessell was integral to executing the agreement and noted the potential camp scale of the gold system across Goodpaster puts the project “head and shoulders” above the rest of projects he had evaluated.
Proximity is key
At its own Goodpaster discovery, Northern Star has firmed up 2.3km of strike, which remains open in all direction.
Highlight drill results from the prospect have included 4m at 67.5g/t gold, 5.2m at 15.7g/t gold, 0.3m at 129g/t gold, and 2.1m at 44.5g/t gold.
Mr Chessell pointed out that Northern Star has had three-to-four drill rigs on site for 18 months within 450m of Northern Cobalt’s new tenements.
Additionally, Northern Star’s operating Pogo mine possesses more than 6Moz of gold resources and reserves and produces about 300,000oz per annum of gold at an average grade of 13.6g/t.
There’s no sign of these production levels abating with Northern Star also announcing a planned 30% expansion at the project for a $30 million capital outlay.
Goodpaster gold acquisition
Goodpaster lies within the Tintina gold province which hosts more than 80Moz in gold, including the massive 45Moz Donlin Creek deposit.
Earlier this year, Millrock commissioned a Controlled Source Audio Magneto Tellurics (CSAMT) survey across the project with results indicating conductive zones of potential gold mineralisation along strike of Northern Star’s discovery.
Mr Chessell said he was “excited” by the geophysics results which line up with other geological and structural information gleaned to-date.
“We have at least two of the strike directions from Northern Star’s Goodpaster discovery covered on our own Goodpaster tenements,” he added.
As a result, high priority targets have already been identified at the new project.
Initially, the focus will be the West Pogo area, but Northern Cobalt plans to assess the entire tenement package and will look at potentially acquiring more ground adjacent to the new package if warranted.
“The all year mine-road access available to this project is a huge logistical and cost saving advantage over typical summer only – helicopter supported projects in Alaska,” Mr Chessell added.
“Our project partners Millrock with their local presence, staff and geology teams, plus our Australian exploration team make a strong combination for improving the odds for discovery success.”
With the gold price hovering at all time highs, Mr Chessell said he was “very comfortable” with the medium to long-term price outlook – particularly in a world struggling for stability.
He said Goodpaster also provided diversification and added value to the company’s battery metals portfolio.
“The Tintina province is a great place to be for the next big gold discovery,” he added.
Northern Cobalt has 100 days to complete due diligence on the project.
The company can then elect to proceed with the acquisition, which comprises a total of $20 million in project expenditure to lock-in 60% of the asset over four years.
Northern Cobalt will also pay a total of $200,000 in cash upon reaching various milestones over the period in addition to 38 million shares.
The company can then elect to secure 70% of the asset by sole funding a bankable feasibility study, with US$3 million payable on a decision to mine.
To cement 80% of the asset, Northern Cobalt will carry Millrock to first production including securing the loan required for any capital outlay.
Name change, placement and new managing director
As part of Northern Cobalt’s new focus, the company plans to change its name to Great Northern Metals and will seek shareholder approval at the upcoming AGM.
Additionally, the company will have an extra $1.5 million in cash after PAC Partners and Taylor Collision noted they have received firm commitments for the placement of 42.9 million shares at $0.035 each.
Proceeds from the placement will be used towards exploring Goodpaster and the progressing the acquisition.
To steer Northern Cobalt in its new direction, Mr Chessell has stepped into the role of managing director.
Mr Chessell has many years’ experience working in climates such as Alaska in addition to gold exploration and development.
He will head up a team of highly experienced geologists who have been part of some world class discoveries.