With a placement completed and rights issue underway, Northern Cobalt (ASX: N27) will have an extra $1.5 million to underpin the next round of exploration and drilling at its Snettisham and Wollogorang projects.
Northern Cobalt has already received firm commitments for $450,000 from investors under the placement.
Meanwhile, under the rights issue, Northern Cobalt is offering investors one new share at $0.05 for every three held to raise up to $1.04 million.
The rights issue reflects an 18% discount to the company’s one month volume weighted average share price.
Snettisham vanadium-gold project
Northern Cobalt pegged the Snettisham project in Alaska’s south late last year, as part of its move into vanadium.
Historic data has confirmed vanadium is present with previous chip samples assaying up 0.56% vanadium.
The historic data review has also noted the project is prospective for gold, with the tenements located within Alaska’s 7 million ounce Juneau gold belt.
Northern Cobalt managing director Michael Schwarz told Small Caps part of Snettisham’s appeal to the company was its proximity to infrastructure including the Snettisham hydroelectric power plant and a deep-water channel for shipments.
The project is also accessible all year round and is only 50km from Alaska’s capital city of Juneau, which has a population of 35,000 people and a strong mining culture.
Additionally, because Snettisham was not subject to a claim, Northern Cobalt was able to simply peg-up the ground which comprises 48 mineral claims.
“We are looking there for titaniferous magnetite-type deposits – essentially iron deposits that have both vanadium and titanium in them,” Mr Schwarz explained.
“There’s really good indications of that style of mineralisation at the project. The United States Geological Survey drilled it back in the late 1950s early 1960s. However, they missed the main magnetite bodies. But, since then, we’ve flown a magnetic survey over the project and been able to really nail down where the main concentration of magnetite is.”
“We’ve now completed a 3D model of that target.”
The 3D model outlined a large magnetite body about 2.5km long, 600m wide and 2km deep – extending 50m from surface.
“It’s those three drill holes that we are going to put that initial funding into to test the extent of magnetite mineralisation and titanium and vanadium along with that as well.”
“We’ve planned three drill holes diamond drill holes going down to 200-250m.”
Northern Cobalt has scheduled drilling to begin at Snettisham before the end of June.
Mr Schwarz told Small Caps that although the project was originally pegged for its vanadium potential, the company was actively looking to unlock the project’s gold potential as well.
“It’s in a known gold district, so we should look at the gold potential.”
He added Snettisham itself hosts three historic gold mines.
The Juneau gold belt is home to Coeur Mining’s Kensington gold mine, which has 675,000 ounces in resources. One of the closest active operations to Snettisham is Hecla Mining Company’s Greens Creek polymetallic silver, gold, zinc and lead mine, which has 840,000oz of gold.
There are numerous other historic mines in the area including the Alaska Juneau and Treadwell mines that produced 3Moz of gold.
Northern Cobalt has likened the lode gold mineralisation to that of Kirkland Lake Gold’s high-grade Fosterville mine in Victoria.
Mr Schwarz said the company was actively firming up gold targets for drilling in the future.
Wollogorang copper-cobalt project
With copper predicted to be one of the most sought-after minerals on the back of the electric vehicle revolution, Northern Cobalt struck it lucky by uncovering thick and high-grade copper mineralisation at its Wollogorang project in the Northern Territory while exploring for cobalt last year.
Shallow drilling at the Running Creek prospect revealed 55m at 0.78% copper from surface, with the intersection ending in mineralisation.
Higher-grade intervals within that intersection were 33m at 1.08% copper from 11m and 13m at 2.01% copper from 11m.
To follow this potential further, Northern Cobalt carried out an induced polarisation survey which revealed a chargeable target beneath the mineralisation.
Over at the Gregjo prospect, another chargeable anomaly has been identified. Drilling at the prospect returned up to 4.24% copper.
Mr Schwarz said the company planned to drill three holes in each anomaly down to at least 200m depths.
He said the rights issue would fund this exploration and the company hoped to get on the ground at the prospects before the end of June.
During March, Mr Schwarz put his own money into Northern Cobalt with two on-market share purchases.
In the first purchase, Mr Schwarz scooped up 60,000 shares for $4,568. A few days later, he bought 29,715 shares for $2,175.