Victory Mines (ASX: VIC) emerged from a trading halt this morning with news it had acquired four cobalt and scandium projects across New South Wales and Western Australia.
The news caused the company’s share price to soar 190% in morning trade.
Victory Mines will gain the projects via a takeover of the current owner Cobalt Prospecting. Under the acquisition terms, Victory Mines will issue Cobalt Prospecting more than 357 million shares at $0.007 each plus further share issues upon milestone achievements including a 2% net smelter return royalty and $200,000 to cover costs. The purchase will account for 31.5% of Victory Mines’ expanded issued capital.
Additionally, Victory Mines plans to undertake a capital raising via two tranches totalling 300 million Victory shares and one-for-two attaching listed options to raise A$2.1 million (pre-costs).
Cobalt Prospecting owns 100% of Malamute and Husky in New South Wales. The tenements cover 244 hectares and are near Australian Mines’ (ASX: AUZ) Flemington cobalt-nickel-scandium project and Clean TeQ’s (ASX: CLQ) Syerston ore body.
Additionally, the tenements have nearby infrastructure including roads, power and local towns for labour, service and equipment.
Meanwhile, the two Western Australian projects, Peperill Hill and Galah Well, include exploration licence applications encompassing another 244 hectares 100km west of Leonora.
Similar to the New South Wales projects, Peperill Hill and Galah Well are in cobalt prospective areas with accessible power, roads and labour pool.
Historic exploration at Galah Well returned 2,430 parts per million cobalt, while 7,290 parts per million cobalt was identified at Peperill Hill.
The acquisition of Cobalt Prospecting and its projects is due to be finalised by the end of the year.
In its quarterly report for the three months ending September 2017, Victory Mines revealed ongoing exploration for nickel, gold, copper, zinc, lead and silver across its Western Australian asset base.
This recent cobalt acquisition directs the company’s focus into the growing cobalt market, particularly its use in lithium-ion batteries, which go in electric vehicles, consumer electronics and renewable energies.
Only last week, notable cobalt explorer Australian Mines secured a A$20 million placement after receiving applications for up to A$40 million from institutional fund managers.