Here's some info for the newcomers to find out what RMX is looking at re this impending high grade Co/Cu acquisition in DRC
The Next Mining Boom - RMX adds African Cobalt Upside
PUBLISHED: 24-05-17
It is no wonder then that RMX has entered the cobalt scene as it looks to shore up its assets for the growing future clean energy storage demand.
In its latest move, RMX has signed a term sheet to take a closer look at a high-grade cobalt copper project located in the world-renowned cobalt region of Lualaba Province, Democratic Republic of Congo (DRC).
The Mukabe-Kasari Cobalt-Copper Project offers significant potential and has artisanal mining that has already demonstrated mineralisation at the location.
At the same time, given RMX is operating in Africa on this project, this is a very high risk stock for political and social reasons. Getting mining projects up and running in countries such as the DRC is no simple feat, and there may be challenges ahead.
Rock chip samples from the project indicate a greater lateral spread and consistent high-grades within the project area and show promising high grade cobalt samples grading 1.1% and 1.5%.
There were also some good copper-cobalt combinations, including 2.7% copper with the 1.1% cobalt sample… and there are further samples to follow still.
RMX has reviewed its strategy and is taking a more targeted approach to the Mukabe-Kasari Project, having outlined changes to the project’s tenure, with the area of focus now comprising a total contiguous land package of 116 square kilometres.
Here’s the Mukabe-Kasari Project area and nearby mining interests:
On May 22, RMX provided an
update on its progress at the Mukabe-Kasari Cobalt-Copper Project.
The update included highly encouraging trenching and sampling results from reconnaissance exploration work at the project.
Rock chip samples continue to show high grade cobalt
The results can be seen here:
These sampling results indicate a greater lateral spread and consistent high-grades within the project area and include samples grading 1.1% and 1.5% cobalt.
There were also some good copper cobalt combinations including copper grading 2.7% with the 1.1% cobalt sample. Five samples featured copper grades between 2.5% and 7.6%.
This follows earlier local artisanal mining at the project demonstrating mineralisation, and the identification of high cobalt and copper grades from reconnaissance grab samples. Lab results provided an impressive average grade of cobalt of 1.6% to 2.9% and of copper of 1.3% to 9.2%.
Further trenching and sampling results are expected in June as part of final due diligence work that the company is undertaking before it decides to proceed further with the earn-in agreement that is in place with CoCu Metals Ltd…
RMX along with mining consultancy group, CSA Global Ltd — which is very familiar with the region — is performing due diligence prior to the option to earn-in.
All costs incurred during the initial due diligence period will count against the first earn-in expenditure requirement.
The parties have agreed to extend RMX’s exclusivity period over the period to June 30, 2017 to finalise due diligence and obtain final sample results, complete tenure paperwork and conduct a thorough site visit with CSA Global to assist and complete the project assessment.
Following key initial due diligence and negotiations, RMX amended its agreement in respect of the term sheet in place with CoCu Metals Ltd relating to the Mukabe-Kasari Cobalt-Copper Project.
The revised agreement gives RMX the option to proceed to earn-in by way of incurring expenditures as follows:
A $250,000 investment in exploration will see RMX and CoCu have an equal 50-50 interest in the project. Investment of a further $250,000 by RMX will increase its interest to 70%, while a further $250,000 will boost its ownership stake to 80%.
Upon RMX exercising its right to earn into the project and entering into formal joint-venture documentation, it will issue CoCu Metals with two million shares.
A further one million shares will be issued if RMX decides to raise its interest in the project to 70%, and then again to 80%. If RMX do decide to earn an 80% interest in the project, the joint venture will be a customary pro-rata contributing arrangement, giving RMX the right to acquire the remaining interest in the project for $3.5 million in cash and shares, and a 1% NSR over the project.
Once its due diligence is completed, if RMX is satisfied it can decide to go ahead with the project, commencing with the Phase 1 earn-in later this year.
In the meantime, RMX is well underway in attempting to prove up the next lithium producing region in the USA.
Full results are due later in the quarter, with upcoming results from this drilling to form the basis of RMX’s decision to acquire a majority interest in the Mukabe-Kasari Project.
Why cobalt?
It’s more a question of “why not” at the moment.
Cobalt is one of the ‘it’ commodities currently and is one that is driving the new energy boom and like lithium has won a good deal of speculative investor support.
With lithium and a potential cobalt asset in its bag, it looks then that RMX may have made a very clever strategic move to grab two of the best performing metals on the market today.
The reason for the surge in cobalt pricing can be put down to several key factors including the rise of electric vehicle being built. According to the OECD, in 2015 the manufacture of electric cars rose from several hundred to 1.2 million.
The supranational Electric Vehicles Initiative has called for an
electric car fleet of 20 million by 2020. Meanwhile amongst the large populace of China, 170,000 electric buses are in circulation and the demand from China is only increasing.
One further reason for the rise in the cobalt price is the supply crunch that has come about as decreases in production from Australia, Russia and Zambia has left a gap in output, with few projects to fill that gap.
The fact is, right at this point in time, the DRC is the largest known source of cobalt in the world, which in part has attracted RMX to the region.
Interestingly, spot prices for cobalt have risen 117% year on year and as of March this year 55% percent since January 1. As such it is currently outpacing lithium, which is still substantial.
Company Update 04 July 2017
Good luck everybody... Please DYOR
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