UraniumSA (ASX: USA) has attempted to collar its own slice of the rocketing cobalt sector by initiating a takeover of private entity Nomad Explorations Pty Ltd, which owns six cobalt projects throughout Australia.
Via its proposed takeover of Nomad, UraniumSA will secure six cobalt-copper-nickel projects across New South Wales, the Northern Territory and Western Australia.
The market reacted positively to the news with the company’s share price climbing more than 128% in morning trade to touch A$0.013.
According to UraniumSA, all projects are in established mining regions and have access to all essential infrastructure.
The two NSW projects are within 40km of Broken Hill and include Perseus and Midas.
Perseus is close to tenements with proven cobalt resources in the region including Cobalt Blue’s (ASX: COB) Thackaringa project, which has 61,000 tonnes of contained cobalt, and Havilah Resources’ (ASX: HAV) Kalkaroo asset which hosts 23,200t of cobalt.
Midas is contiguous to Silver City Minerals’ (ASX: SCI) tenements where 25km of strike has been found prospective for copper and cobalt. Drilling at Silver City’s project returned 10.8m grading 0.09% cobalt and 41m grading 1.3% copper.
Contained cobalt at Wollogorang’s flagship Stanton deposit is now 1,200t.
Over in WA, UraniumSA has picked up the Rover project which is close to Leonora and St George Mining’s (ASX: SGQ) Mt Alexander project which has unearthed high-grade nickel, copper and cobalt including a notable 1.9m interval that graded 7.42% nickel, 3.45% copper and 0.23% cobalt.
“Taking a systematic and strategic approach, the board is delighted with the proposed acquisition of the Nomad assets,” UraniumSA non-executive chairman Alice McCleary said.
“Notably, the NSW projects are close to Broken Hill, which is emerging as a potential cobalt supply chain hub for global technology groups. Similarly, the NT and WA assets are in regions with evidence of demonstrable cobalt mineralisation,” Ms McCleary added.
Acquisition terms and funding
Under the acquisition terms, UraniumSA will purchase 100% of Nomad via a mixture of cash and shares including an initial A$50,000 non-refundable deposit and 30 million shares.
Further share and performance rights will be issued to Nomad’s vendors upon UraniumSA reaching various milestones and amount to 580 million fully paid ordinary shares (once the performance rights have been converted).
To fund the acquisition, UraniumSA will raise A$1.2 million before costs in a two-tranche placement.
The first placement will comprise the issue of 60 million shares at A$0.007 each, with the second placement including 111.5 million shares at A$0.007 per share.
Funds will also be used to advance exploration across UraniumSA’s existing and new assets.
UraniumSA’s takeover of Nomad and resultant capital raising remain dependent on shareholder and regulatory approvals.
Additionally, to reflect its new focus, UraniumSA will put a name change to a shareholder vote at the upcoming extraordinary general meeting at the end of June.
UraniumSA anticipates its acquisition of Nomad will be completed in early July.
By early afternoon trade, UraniumSA’s share price was up 71.43% at A%$0.012.