Quarterly Activities - Cashflow Reports
Sydney, Jan 29, 2021 AEST (ABN Newswire) - Cobre Limited (ASX:CBE) is pleased to provide the following update on its activities for the quarter ended 31 December 2020. During the quarter, the Company's focus was largely on the corporate front via its geographic and strategic diversification into Botswana through the proposed acquisition of a controlling interest in Kalahari Metals Limited (KML), a copper exploration JV company in the highly prospective Kalahari Copper Belt (KCB) in Botswana.
Early in the quarter the exploration team finalised on-site processing of core drilled as part of the Company's third drilling programme at Perrinvale and completed field mapping and surface sampling at the Costa del Islas prospect before demobilising.
The Board took the decision to focus on the Botswana acquisition and allow the technical team to receive final assays and review results across the three drill programmes, and other field activities completed in 2020, while also progressing metallurgical work on the Schwabe mineralisation, which will allow for an initial assessment of monetisation potential.
A short field programme was completed prior to Christmas, with soil sampling (including initial portable XRF analysis in the field) undertaken at two areas of interest; Little Italy area south of Schwabe, and an area to the east of the Monti Prospect. As part of this programme a number of surface rock samples were submitted for laboratory analysis with the assays from these yet to be reported.
The Schwabe Prospect metallurgical work progressed, including an additional recleaner stage and confirmation of physical properties. Reporting of these results has been delayed due to a back log of samples at the assay laboratory. Final results have now been received post quarter and are in the process of being analysed, which will allow the planned optimisation study to move forward.
During the quarter, the Company confirmed a strategy for the next steps of exploration on the Sandiman Project to be based around acquisition, integration and interpretation of geophysical data. A ground gravity survey and airborne magnetic/radiometric survey were designed. The Company's geophysical contractor, Atlas Geophysics, completed a ground gravity survey across the entire Sandiman tenure on a 200m x 400m grid and the airborne magnetic/radiometric survey is scheduled for completion in February.
Future Work Program
Consultant, Orelogy Pty Ltd, has been engaged to complete an optimisation study on the Schwabe mineralisation as a means of assessing monetisation potential of the currently defined near surface massive sulphide deposits. Positive results in this first pass study will justify further focussed work aimed at verifying key assumptions and improving confidence. Results are expected in early February 2021. Planning is also underway for a phase of field exploration focused on understanding and testing the mineralisation potential across the broader 408km2 of tenure at Perrinvale.
As previously announced, on 24 August 2020, the Company signed a binding Heads of Agreement (HOA) for the proposed scrip-based acquisition of 51% of the equity of KML. KML is a private UK company which controls approximately 8,100km2 of tenements within the KCB in Botswana (with 6,650km2 owned 100%, and 1,450km2 through Joint Venture arrangements).
The KCB is regarded as one of the most prospective areas globally for copper exploration by the US Geological Survey (USGS), with a number of copper-silver deposits currently under development by ASX listed Sandfire Resources Limited (ASX:SFR) and also Cupric Canyon Capital (Cupric Canyon).
During the quarter, on 20 November, the Company announced the successful completion of due diligence for the KML acquisition which was followed on 16 December with the announcement of the signing of a Share Purchase Agreement (SPA).
The terms of the SPA are generally consistent with the binding HOA previously entered into by the parties in respect of the Transaction which include:
- The KML vendors will collectively be issued circa 21.4m CBE shares in consideration for the 51% interest in KML. Cobre will initially acquire a 49.9% interest in KML, and subject to obtaining change of control approval from the Ministry of Mines of Botswana, will increase its shareholding in KML to 51% immediately thereafter.
- The new shares, to be escrowed until 31 January 2022 (except for MTR's shares which will be escrowed for 12 months from completion), will be issued at an implied CBE share price of 20cps.
- Transaction completion is conditional upon a number of matters which remain outstanding including Cobre obtaining shareholder approval.
KML is a copper exploration JV company in the highly prospective KCB in Botswana. KML owns the second largest tenure holding in the Botswana portion of the KCB after Sandfire. Exploration drilling of KML's tenements is currently underway by the existing owners, with future exploration activities to be jointly funded under a new shareholders agreement (effective on completion of the Transaction) entered into by Metal Tiger plc (LON:MTR) (MTR), Cobre, Cobre Kalahari Pty Ltd (being a new wholly owned subsidiary of Cobre nominated by Cobre under the SPA to acquire the shares in KML) and KML.
KML is currently owned by seven shareholders, including Cobre's largest shareholder, MTR and six other shareholders. The KML Vendors and Cobre are parties to the SPA. Other than MTR, none of the KML Vendors are related parties of Cobre. Upon completion of the Transaction, MTR will hold approximately 21% of the issued shares of CBE.
To view the quarterly report, please visit:
About Cobre Limited
Cobre Limited (ASX:CBE) is a copper and base-metals explorer with projects in Western Australia and Botswana. The Company recently discovered a new high-grade VMS deposit enriched in Copper, Gold, Zinc and Silver in Western Australia, and is currently exploring approximately 8,100 km2 of tenements within the Kalahari Copper Belt (KCB) in Botswana.
Sandfire Resources Ltd
Metal Tiger plc