Canadian cobalt developer Global Energy Metals (TSX:GEMC) announced that it has made its first option payment towards acquiring two cobalt projects near Tesla’s Gigafactory in Nevada on Tuesday.

The business, which announced plans to co-list in London in February, has issued 384,627 of its shares to Nevada Sunrise and paid $20,000 to the underlying vendor. This forms the first part of its agreement with Nevada Sunrise to acquire an 85pc interest in the Lovelock cobalt mine, under-explored for its high-grade cobalt-nickel-copper potential, and the adjacent Treasure Box project. 

Lovelock covers an area of around 1,400 acres and is said to have produced 500ts of cobalt and nickel mineralisation between 1883 and 1890, when it was last in operation.  Global Energy believes exploration work and modern drilling techniques could unlock a large amount of potential value at the site.

The properties are located in Churchill County, around 150km east of the Tesla Gigafactory in Sparks, Nevada. Speaking to MiningMaven last month, Global Energy’s chief executive Mitchell Smith said the acquisition represents a low-cost entry to an exciting jurisdiction that is in close proximity to the world’s largest battery factory:

‘Some of the grades at these sites are exceptional. Historically, grades were reported as high as 14-15pc cobalt, which is just unheard of. It shows there is a real opportunity in this significant land package covering two past producing mines. Given our proximity to Tesla, this could really provide us with unique access to the growing demand for domestic cobalt supply in the US.’ 

In Tuesday’s update, Global Energy added that it is also reviewing exploration plans for both Lovelock and Treasure Box. It said this programme will assist it with an ongoing, extensive review and reinterpretation of historic data at both sites.

“There has been a tremendous amount of attention placed on the US for it to stop being merely a bystander in the global battery arms race and start developing more domestic supplies of battery metals such as cobalt, nickel and copper to supply its homegrown battery factories, including Nevada-based Gigafactory 1,’ said Smith. ‘The Lovelock and Treasure Box projects are prime examples of US based battery metal projects that are very prospective and strategically located in close proximity to a domestic end-user with a large appetite for the critical materials used in EV and energy storage technology.’

Global Energy focuses on offering security of supply of cobalt, which is a critical material in the rapidly growing rechargeable battery market. It is building a diversified global portfolio of assets in the sector, including project stakes, projects and other supply sources.

The business’s flagship asset is the Millennium Project in the world-renowned Mt. Isa region of Queensland, Australia. It executed the final agreements to take a 100pc interest in the project in November.

Millennium is a multi-zone, near-surface cobalt-copper sulphide system with several kilometres of potential strike length. It is located near established mining, transport, and processing infrastructure and offers easy access to a very skilled workforce.

The growth-stage site contains a defined zone of cobalt-copper mineralisation.  Here, a 2016 JORC Resource estimate identified 3.1MMts of inferred resources containing 0.14pc cobalt and 0.34pc copper with gold credits. 

Global Energy is now looking at ways to increase the size of its deposit. Results from a first phase exploration campaign at two zones called Millennium North and Millennium South exceeded grade and thickness expectations. The firm will now carry out a second phase of drilling to examine both areas further. 

Alongside Millennium, Global Energy has acquired two further discovery sites called Mt. Dorothy and Cobalt Ridge.  These are collectively known as the ‘Mt. Isa projects’. The areas expand Global Energy’s Australian land position by nearly twenty times but have yet to be exploited. Exploration to date has returned high-grade cobalt intercepts at both, allowing Global Energy to line up numerous targets for further investigation and test work to define a resource.

Finally, the business currently owns 70pc of the Werner Lake cobalt mine in Ontario Canada. It joint venture partner Marquee Resources is enjoying much success in its ongoing exploration campaign at the asset. 

Author: Daniel Flynn

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