Subsequent to the end of the quarter (30 September 2017) Blackstone Minerals completed its acquisition of Cobalt One Energy Corp (“Cobalt One”) which has an option to acquire 100% interest in the Little Gem Cobalt-Gold Project and an option to acquire 100% interest in the Cartier Cobalt-Nickel Project.
Little Gem Project (right to earn 100% interest)
Highlights of the Project include:
- Recent rock chip sample from historical adits returned 2% cobalt & 46 g/t gold (Refer Image One);
- Surface channel samples of massive sulphides return assays up to 4 m @ 5.7% cobalt & 1,574 g/t (≈50 oz) gold and 1.8 m & 5.1% cobalt & 17.8 g/t gold;
- Underground adit channel sampling of massive sulphides return multiple high grade intersections including 8 m @ 4.4% cobalt & 73 g/t gold and 2 m @ 3.1% cobalt & 76 g/t gold;
- Historic drilling from the adits returned multiple intersections including 8 m @ 2.4% cobalt & 112 g/t gold, 3.3 m @ 1.4% cobalt & 12.3 g/t gold and 2.9 m @ 0.9% cobalt & 12 g/t gold;
- High grade cobalt and gold mineralization open along strike and down dip;
- The Little Gem Project covers an area of 195 km2 and is favourably located less than 15 km along strike from the Bralorne-Pioneer mining complex (endowment of 4.4 Moz at 17 g/t Au) which retains the status of the foremost gold producer in British Columbia and the sixth largest in Canada (Refer Figure Two).
The Little Gem Project was discovered in the 1930’s by prospectors identifying a pink cobalt-bloom on weathered mineralization that led to three adits being developed. A total of 1,268 m of drilling was completed from underground and detailed channel sampling was taken from the adits. Results from this work generated some exceptional Cobalt and Gold assays including: 1.8 m @ 2.4% cobalt & 112 g/t gold, 3.3 m @ 1.4% cobalt & 12.3 g/t gold, 2.9 m @ 0.9% cobalt & 12 g/t gold, 4.1 m @ 1.4% cobalt & 11.3 g/t gold and 3.3 m @ 1.4% cobalt & 80 g/t gold from drilling, and 1.8 m @ 4.4% cobalt & 73 g/t gold, 2 m @ 3.1% cobalt & 76 g/t gold, 1.5 m @ 5.4% cobalt & 26 g/t gold and 1.3 m @ 4.0% cobalt & 29 g/t gold from underground channel sampling and 0.4 m @ 5.7% cobalt & 1,574 g/t gold, 1.8 m & 5.1% cobalt & 17.8 g/t gold and 0.1 m @ 4.6% cobalt & 800 g/t gold from surface channel sampling (Refer Figure Four).
Little Gem is mostly underlain by granite of the Coast Plutonic Complex and ultramafic rocks on what is interpreted to be the northern extension of the Cadwallader fault zone (Refer Figure Two). These are the major geological units and structures important to the mineral deposits either as the host rocks or sources of the mineralizing fluids that gave rise to the Bridge River mining camp. The camp has 60 mineral localities including the Bralorne-Pioneer mining complex (endowment of 4.4 Moz at 17 g/t Au) which retains the status of the foremost gold producer in British Columbia and the sixth largest in Canada. Little Gem is only 15 km along strike to the north of the Bralorne-Pioneer mining complex.
There has been very little modern day exploration at Little Gem with the main activities being airborne geophysical surveys (including magnetic, radiometric and electromagnetic (“EM”) surveys) in the 1970’s (Refer Figure Three) and a further two drill holes completed in 1986.
Blackstone, as part of its due diligence program at the recently acquired Little Gem Cobalt-Gold Project, has discovered a new high grade Gold prospect named Roxey. Surface rock chip samples taken at Roxey assayed up to 24 g/t gold & 1.9% copper. In addition to the discovery at Roxey, Blackstone has also received rock chip results from the Jewel prospect located 1.1 km north-northeast of Little Gem, with assays returning up to 98 g/t gold and 3.2% copper.
Highlights of the sampling program at the Little Gem Project include:
- Surface rock chip samples taken at Roxey, located 1.5 km along strike from the high grade Little Gem Cobalt-Gold prospect assayed up to 24 g/t gold & 1.9% copper (Refer Figure Five);
- Verification rock chip samples taken at the Little Gem Cobalt-Gold prospect returned results of up to 0% cobalt & 34 g/t gold, 4.8% cobalt & 89 g/t gold and 0.65% cobalt & 137 g/t gold (Refer Image Two);
- Surface rock chip samples were also taken to verify the mineralization at the Jewel prospect located 1.1 km north-northeast of Little Gem and returned up to 98 g/t gold and2% copper (Refer Figure Five).
Blackstone recently completed a site visit as part of the due diligence program at the recently acquired Little Gem Cobalt-Gold Project. Samples were taken to verify the mineralisation identified historically at the Little Gem Cobalt-Gold Prospect and the Jewel Gold Prospect and to test other exploration opportunities within the project area. Results led to the discovery of a new high grade Gold prospect named Roxey.
The Roxey Gold prospect is located 1.5 km west-southwest of the Little Gem Cobalt-Gold prospect and is along strike to the cobalt–gold mineralization at Little Gem. Blackstone visually identified Roxey during the site visit and took rock chip samples within the target area which assayed up to 24 g/t gold, 1.9% copper & 24 g/t silver. Mineralization at Roxey is associated with quartz-pyrite altered diorite containing chalcopyrite.
The verification rock chip samples taken at the Little Gem Cobalt-Gold prospect returned results of up to 5.0% cobalt & 34 g/t gold, 4.8% cobalt & 89 g/t gold, 0.65% cobalt & 137 g/t gold and 3.1% cobalt & 24g/t gold (Refer Image Two). These results confirm the High Grade nature of Little Gem and support historical drill results.
Surface rock chip samples were also taken to verify the mineralisation at the Jewel prospect located 1.1 km north-northeast of Little Gem and returned up to 98 g/t gold and 3.2% copper. These results confirm what Blackstone’s recent investigation has revealed with historical samples of up to 0.6 m @ 75 g/t gold and 0.45m @ 153 g/t gold from underground and surface channel sampling and up to 6.9 g/t gold, 19.25% copper & 137 g/t silver from underground rock chip sampling. Mineralization at Jewel sits in an ultramafic near the easterly trending/steep south dipping contact with the quartz diorite/granodiorite that hosts the Little Gem Prospect.
The Company has commenced its maiden drilling program at the High Grade Little Gem Cobalt-Gold Prospect
albeit late in the field season and will release results as soon as available.
Cobalt Market Commentary
Cobalt contributes up to 60% of the value of Lithium Ion Batteries which in turn accounts for 42% of demand for cobalt. The lithium ion battery is projected to become the world’s most significant source of power with the use in electric vehicles (“EV”) being the key driver. Bloomberg forecasts 35% of vehicles sold by 2040 will be electric, currently only 1% of global sales are EVs. Consequently, cobalt demand is expected to rise at 5% compound annual growth rate (“CAGR”) over the next 4 years. Cobalt’s other main use at 16% is in superalloys which compliments the battery demand as high-tech industry grows.
Cobalt is expected to have a supply deficit as currently mining is only just meeting demand. The cobalt price has risen significantly from US$10/lb (US$22,000/t) to US$27.50/lb (US$61,000/t) over the last 21 months. Current prices are still well short of the 2008 high of US$52/lb (US$115,000/t) which was the last time cobalt was in deficit.
Approximately 98% of the world’s supply of cobalt comes from copper and nickel production with 15 mines representing half of the world’s supply. This makes the supply stream for cobalt highly sensitive to disruptions caused by mine related issues. A recent example was the shutdown of copper mining in the Katanga Province in the DRC due low copper prices which cut 3% of the world’s cobalt supply.
In accordance with the Binding Heads of Agreement Terms, Blackstone Minerals have Executed the Definitive Agreement with Cobalt One obtaining 100% of Cobalt One’s Shareholder Agreements to transfer their shares to Blackstone Minerals as well as satisfactory completion of the due diligence.
The Definitive Agreement Execution was finalised with the achievement on 24 August 2017 of Cobalt One’s Shareholder Agreements to sell their shares to Blackstone Minerals, upon receiving on 12 October Blackstone’s Shareholder approval and then on 20 October receiving approval for an Exemption Order in British Columbia, Canada.
The material terms of the Definitive Agreement are in accordance with the previously announced Binding Heads of Agreement as follows:
- the consideration for the Acquisition will be satisfied by the issue of 25,000,000 fully paid ordinary shares subject to Shareholder approval in the Company to the Cobalt One shareholders;
- 8,000,000 performance shares each convertible into one fully paid ordinary share in the Company subject to ASX and Shareholder approval on the same terms (Refer BSX Announcement 26 July 2017) will be issued to certain Cobalt One shareholders in association with the Acquisition;
- the Company shall assume Cobalt One’s obligations under the Gold Bridge Option Agreement for C$700,000 (being the equivalent of approximately A$710,000) of staged option payments payable in respect of the Little Gem Gold-Cobalt Project in the following instalments: first payment of C$200,000 due on completion of the Acquisition, second payment of C$250,000 due on or before 3 months after completion and a final payment of C$250,000 due on or before 6 months from the date of completion, upon payment of which, Cobalt One will become the 100% owner of the Little Gem Project:
- in respect of the Little Gem Gold-Cobalt Project, the Company will be required to pay the following royalties:
- in respect of the first 10,000 tonnes of ore mined from the Project, a 20% net profits interest and a 1% Net Smelter Return (NSR) royalty shall be payable to the current owner of the Little Gem Gold-Cobalt Project; and
- a NSR royalty equal to 2.5% thereafter (over 10,000 tonnes) shall be payable to the current owner of the Little Gem Gold-Cobalt Project.
Image One | Recent sample of mineralisation from the adits at Little Gem assaying 6.2% cobalt and 46 g/t gold
Figure One | Location of the Little Gem Project
Figure Two | Little Gem Geological Setting
Figure Three | Little Gem Prospect Locations & Geophysical Targets
Image Two | Recent sample of mineralisation taken on the site visit to Little Gem assaying 17.5 g/t gold and 0.53% cobalt
Figure Four | Little Gem Local Geology, Works & Drill Holes
Figure Five | Little Gem Project – reconnaissance and verification sampling results with historic drill and channel results
Cartier Project (right to earn 100% interest)
The Cartier Cobalt-Nickel Project (9 km² of tenure) is located 440 km north-east of Quebec City (Refer Figure Six). Historic exploration (1990’s) on the project for Voisey’s Bay Style Nickel and Copper has identified Cobalt within two prospects named Lac St Pierre Zones 1 & 2 that warrants further follow up work (Refer Figure Seven).
Figure Six | Location of the Cartier Project
Figure Seven | Cartier Geological Setting