CMY Exercises Option to Acquire Scotia Cobalt Project in WA
- Capital Mining has successfully completed Due Diligence over the Scotia Nickel-Cobalt Project and has exercised its option to acquire the project
- The Scotia Project is an advanced Cobalt-Nickel asset located in the eastern goldfields of Western Australia
- Widespread cobalt mineralisation identified in historic drilling; including 27.4m @ 0.06% Co and individual cobalt values up to 0.47% Co
- Historical exploration focused on nickel sulphide - cobalt potential yet to be fully explored
- Four initial target areas defined - plans for first phase drilling underway
- Cobalt price has risen over 100% in 12 months to ~US$55,500 per tonne
- Medicinal Cannabis Update - Capital directors currently in North America to advance negotiations with Broken Coast Cannabis over potential investment in BCC.
Capital announced it had secured an option to acquire the Project last month (ASX announcement 9 March 2017). Following successful completion of due diligence the Company has exercised its option to acquire the Project, on the acquisition terms set out in the ASX announcement of 9 March 2017. Shareholder approval for the acquisition was obtained at the shareholder meeting held on 19 April 2017.
Background to Scotia Cobalt-Nickel Project
The Scotia Project is located approximately 65km north-northwest of Kalgoorlie, some 20km along strike of the Silver Swan and Black Swan nickel mines within the Archean Kalgoorlie Greenstone Terrane of Western Australia.
The Project has been previously explored for nickel particularly in the late 1960's and 1970's. Two main nickel prospects were identified during this exploration; the Ringlock and GSP prospects, with several other targets also identified. In this exploration, 70% of drill holes completed were drilled to less than 70 metres. Deeper drilling focused on the GSP prospect where significant nickel sulphide mineralisation was intersected.
Several geophysical anomalies were defined and tested during this period of exploration and some were found to host associated cobalt mineralisation. Significant cobalt intersections have been recorded, including 27.4 m @ 0.06% Co, with individual cobalt values up to 0.47% Co reported (see Table 1 in the link below for the more significant cobalt intercepts recorded and Appendix 1 in the link below for a complete list of historical drilling and results).
With the historic focus on nickel exploration in the region, little focus has been placed on the cobalt potential within the Project, however analysis of available data indicates several areas of highly anomalous cobalt mineralization, associated with nickel mineralisation. The two known nickel prospects at GSP and Ringlock both contain appreciable cobalt in association with the nickel mineralisation. There are also two semi-contiguous zones - the Central targets - which cover approximately 2.8km of strike between these two prospects and also show good cobalt-nickel association (see figure 1 in the link below). These areas will be the initial areas of focus for exploration.
The project contains komatiites split into two main units, an eastern and a western unit with intervening basalt and dolerite. The western unit, which has been subject to most of the nickel exploration within the belt, contains several cumulate textured lava channels. Nickel mineralisation has been intersected near the basal contacts of these channels with zones of disseminated nickel sulphide mineralisation having been intersected above these basal contacts. There has been little exploration of the eastern komatiite unit, although nickel mineralisation has been intersected within it.
Potential exists for the discovery of down-plunge extensions and remobilized sulphide bodies associated with mineralisation at the GSP Prospect. The short strike length of the deposit is analogous to the upper levels of the high-grade Silver Swan nickel deposit to the south. Mineralisation may be open at depth providing considerable potential for down-plunge additions to the mineralisation.
The Ringlock prospect also requires additional work including utilising modern geophysical techniques and deeper drilling to fully assess its cobalt potential.
The Scotia project has confirmed nickel sulphide mineralisation with appreciable levels of associated cobalt and offers the Company good exposure to both commodities. The presence of established nickel sulphide mineralisation with little exploration within the project area in recent years provides significant encouragement for the potential to discover appreciable resources.
First Phase Field Work
Having successfully completed due diligence, which re-affirmed the Project's cobalt potential, and exercise its option to acquire the Project, Capital will immediately make plans for a first phase field program.
This initial work will focus on the four target areas delineated to date, and will include mapping and drilling over the two Central target areas plus deeper drilling at the GSP and Ringlock prospects.
The Company will provide further information on the details and timing of the field work program in due course.
Cobalt has reached a current spot price of US$55,500/t representing a +100% increase in price over the past year. The primary drivers for this price increase include:
- Recent surge in demand from the energy storage market
- Independent forecasters predict the market is due for very buoyant Co prices
- Supply challenges associated with the Democratic Republic of Congo (DRC) producing 60% of global cobalt production
- Demand is expected to exceed supply out to 2020. Industry will need to rely upon very large mine supply growth
- Lack of recent exploration discoveries
Medicinal Cannabis Update
Capital is also pleased to provide the following update on its investment in the medicinal cannabis sector with Broken Coast Cannabis Limited (BCC).
As advised in its ASX announcement of 29 March 2017, the Company has successfully agreed a settlement with BCC to finalise a dispute pursuant to a Binding Agreement between Capital and BCC, under which Capital was to acquire up to 50.1% of BCC (ASX announcements, 9 March 2015 and 21 May 2015).
Under the settlement, BCC agreed to pay Capital the sum of C$250,000.00 to finalise the matter, and Capital (or its subsidiaries) retains the rights to negotiate further investment in BCC for a period of 90 days following the execution of the settlement agreement.
Capital advises that initial negotiations with BCC in respect of Capital's rights have progressed well, and that directors of Capital are currently in North America to undertake further negotiations in person with BCC executives.
The Company will update the market in due course on any material progress and outcomes of its negotiations.
To view tables and figures, please visit:
About Capital Mining Limited
Capital Mining Limited (ASX:CMY) is an active ASX listed junior mineral resources company focused on the acquisition and exploration of key, demand driven commodities. Its project portfolio includes lithium prospective assets in Western Australia and the Republic of Ireland, plus gold and base metals projects in New South Wales.
Capital Mining Limited