Chairman's Address to Shareholders
In May, the Company announced the completion of the acquisition of the 20% minority stake in Toucan Gold Pty Ltd (Toucan) which is the 100% holder of the high-grade Perrinvale VHMS Project, and is now a 100% wholly owned subsidiary of Cobre.
Following this, in June, we launched a 6000-metre combined diamond and Reverse Circulation (RC) drilling program with the objective of extending the mineralisation at Schwabe and testing a number of promising Electro Magnetic (EM) conductors at other areas within Perrinvale. The Board is pleased with the drilling results achieved at the Schwabe deposit.
The Company has undertaken an internal resource estimate and is undergoing an optimization and scoping study with the view to look at monetization options for Schwabe.
Early metallurgical results on the deposit have come back positive with good recoveries.
The Board's view is that the Schwabe VHMS deposit, due to its shallow high grade fresh sulphides and favourable commodity prices, with Copper prices at 6 year highs, could provide the Company with significant potential cash flows in the near term with low CAPEX requirements, via an open pit operation. Ongoing review of this is continuing and more information will be available in due course. The potential here is to generate cashflow to fund further exploration with the aim to minimise shareholder dilution.
The technical VHMS experts associated with the Company believe the broader regional prospectivity at Perrinvale warrants further exploration with the aim to discover a large VHMS deposit.
Full details of all results referred to herein and announced by the Company, including relevant JORC information and tables, can be found in the Company's announcements released on the ASX platform.
As we continue to advance exploration and monetization of the Schwabe deposit at Perrinvale, we have also begun to investigate the potential of our new copper opportunity in the underexplored Kalahari Copper Belt (KCB) in Botswana, announced in August. You will note from our announcement last week, that due diligence is now complete and the Company's lawyers are working on the negotiation and finalisation of the long form documentation. In addition to finalising documentation, the transaction remains subject to receipt of relevant regulatory approvals and approval by Cobre's shareholders at an Extraordinary General Meeting (EGM) expected to occur in early 2021.
Upon receipt of the approvals, Cobre will acquire a controlling interest in Kalahari Metals Limited (KML), a private UK unlisted company, which owns approximately 8,100 km2 of tenements within the KCB, regarded as one of the most prospective areas globally for copper exploration by the US Geological Survey (USGS).
The Board believes that this acquisition of a large portion of the prolific KCB will create a stronger and more diversified company poised for domestic and international growth. By adding a stake in the prospective and underexplored KCB in Botswana, we have broadened our project portfolio and increased our exposure to copper, a metal in high global demand.
About Cobre Limited
Cobre Limited (ASX:CBE) is a Sydney based company focused on mineral exploration in Western Australia. The company recently discovered a new high grade VMS deposit enriched in Copper, Gold, Zinc and Silver in Western Australia from its maiden drill program in June 2019.