Shares in Cape Lambert Resources Limited (ASX: CFE) have risen sharply on this ASX this morning, after the company confirmed it has entered into a binding heads of agreement with a Congolese company to form a 50/50 joint venture to develop the Kipushi cobalt copper tailings project, the Kasombo copper-cobalt projects and operate the Kipushi processing plant in the Democratic Republic of Congo (DRC).
Both projects lie on granted mining licenses in the Katanga copper belt, the location of some of the world's largest and highest grade copper and cobalt mines.
Subject to completion of the agreement, the joint venture intends to operate the fully constructed and commissioned Kipushi processing plant to process the Kipushi tailings and treat additional hard rock cobalt and copper material. The Kipushi processing plant commissioned in 2016, comprises a +1 million tonnes per annum flotation plant designed to produce 4,000 tonnes per annum of cobalt, 10,000 tonnes per annum copper and 2,000 tonnes per annum of zinc in concentrate from the Kipushi tailings. Cape Lambert has confirmed a mining fleet, including trucks and heavy equipment already on site.
Detailed mine planning and optimisation work is underway on the Kipushi cobalt tailings project, with the joint venture aiming to commence mining activities/tailings retreatment within 6 months. Offtake discussions for the sale of cobalt, copper and zinc concentrates are already underway.
Cape Lambert believes this agreement will see it quickly take advantage of skyrocketing cobalt prices, which are valued at over $41,000/t. According to the company, cobalt prices are expected to remain buoyant as global production stalls and demand increases, with the metal used in lithium-ion batteries.
Cape Lambert's established in-country management team combined with significant African operating experience in South Africa, Republic of Congo, Sierra Leone, Cote d'Ivoire and Guinea, will greatly assist in bringing these projects into near-term production.
Cape Lambert executive chairman Tony Sage said: "We believe Cobalt, as a commodity, has an extremely positive future and with this transaction and the proposed joint venture, we believe we are well placed to benefit from significant demand and price increases in this commodity sector.
"This agreement paves the way for a JV that will benefit from advanced, highly attractive and prospective cobalt and copper projects and that will be supported by a well credentialed joint in-country and Australian based technical and operation team that includes geologists, mining engineers, process engineers, local logistics, government and community relations professionals. With our strong combined track record of project delivery and a corporate team highly capable of accessing sufficient capital to advance the near term production assets, we look forward to our partnership with Paragon."
Cape Lambert shares opened at 3.6 cents per share and have been trading around that price all morning. As at 11.45 am AEST Cape Lambert shares are trading at 3.2 cents per share, in increase of 68.4% on its previous closing price of 1.9 cents per share. By this time 89,524,137 shares worth more than $3.1 million had been traded.
CFE Price at posting:
2.9¢ Sentiment: Buy Disclosure: Held
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