Hammer takes 19.9% of Canadian JV partner
Hammer Metals has agreed to sell its 75% interest in the Millennium cobalt project near Cloncurry in Queensland’s Mt Isa mining district to TSX listed partner Global Energy Metals Corporation.
The all scrip deal also includes two additional cobalt targets at the Mt Dorothy and Cobalt Ridge prospects that are outside of the current Millennium project area.
Hammer will emerge from the deal as a 19.9% shareholder in Global Energy Metals Corp, who is also developing the Werner Lake cobalt project in Ontario, Canada, in addition to Millennium.
Werner Lake is an advanced, near-term production project with an Indicated Mineral Resource of 57,900 tonnes @ 0.51% cobalt and 0.25% copper and an additional Inferred Mineral Resource of 6,300 tonnes @ 0.48% cobalt and 0.14% copper.
Mineralisation remains open at depth and along strike with the potential for undiscovered high grade zones.
Hammer will now focus on its copper-gold exploration projects in Mt Isa.
Just last week, the company announced some excellent, near surface cobalt drill intercepts at Mt Isa with a best result of 41 metres grading 0.18% cobalt, 0.11 grams per tonne gold and 0.23% copper.
This included a 15m higher grade section grading 0.22% cobalt, 0.21% copper and 0.18g/t gold from just 40m down-hole with a peak 1m assay at 1.85% cobalt from 40m.
Millennium is less than 20km from CuDeco’s Rocklands copper project, which held a pre-mining resource of 96 million tonnes grading 0.45% copper, 0.13g/t gold and 0.03% cobalt in multiple lodes within an iron oxide copper gold ore deposit.
It is also similar in size and style to other deposits in the region that have been successfully mined by small-scale open pit techniques.
The project currently holds inferred mineral resources totalling 5.9 million tonnes grading 0.32% copper, 0.11% cobalt and 0.11g/t gold.
Hammer CEO Alex Hewlett said: “The work program that just concluded at Millennium, continues to highlight the potential for the project to be part of a much larger regional cobalt venture across the Mount Isa region of Northwest Queensland.”
“With the proposed agreement Hammer is pleased to have the opportunity to have a significant interest in a focused cobalt explorer and developer, while retaining exposure to longer term value creation that the Millennium and other Mount Isa cobalt projects will offer.”
“The sale to a focused cobalt explorer in GEMC will allow Hammer to concentrate on its other advanced copper-gold exploration programs within its 3000km2 tenement package in the Mount Isa mining district.”
Global Energy Metals President Mitchell Smith added: “This combination creates one of the largest and most exciting exploration cobalt packages in Australia.”
“Upon completion, we plan to recommence exploration and expansion of the project with the intent to commission a current resource estimate for the projects as well as identify new opportunities in the cobalt rich district."
The sale replaces the previous agreement under which Global Energy Metals had the right to earn 75% of the Millennium JV project by spending a minimum of CAD$2.7m, including CAD$250,000 in cash payments to Hammer.
It also replaces the previous letter of intent for the company to sell the Mt. Dorothy and Cobalt Ridge prospects to Global Energy Metals.
Hammer will remain the operator of the Millennium JV project until the first anniversary of the sale and may remain so, pending annual reviews.
The two companies will also co-operate to identify and acquire further cobalt assets in the Mt Isa region.