Stock Head:
Krakatoa Resources is picking up a cobalt and silver project in the renowned “Cobalt Camp” of Ontario, Canada — and the news has investors excited.
The shares jumped as much as 25 per cent on Thursday morning to a peak of 5c before cooling slightly to 4.5c by midday.
“This is our first foray into cobalt,” executive chairman Colin Locke told do not advertise external links. “We’ve been looking for the right project for a number of years.”
Krakatoa was previously exploring its Dalgaranga tantalum, niobium and lithium project, located 80km north west of Mount Magnet in Western Australia, but disappointing grades led to a rethink of the company’s exploration strategy.
“We were a little bit disappointed about the grades on that first drilling campaign that we did at Dalgaranga, but we had to drill it and see what was there,” Mr Locke said.
“So we thought we should look at something else for investors.”
Krakatoa is interested in commodities that are components of energy storage and the transportation of electric currents – like copper.
Cobalt, which is used in rechargeable batteries for electric cars, is witnessing increased demand, particularly from Asian battery makers, as supply becomes more constrained.
One billion electric cars are expected to be on the road by 2050 and cobalt demand is expected to grow eight-fold by 2025.
The price of the battery metal recently hit a decade-high of $US95,000 ($122,984) per tonne.
Krakatoa has inked a deal with TSXV-listed CBLT Inc to acquire two claims where drilling has struck grades of up to 2393 grams per tonne (g/t) of silver, 0.31 per cent cobalt and 0.46 per cent copper.
Cobalt grades above 0.1 per cent are considered economic. Grades above 0.2 per cent are average and grades of 0.3 per cent and above are considered very good, especially with scale.
Meanwhile, anything over 50g/t is considered high grade for silver.
The Cobalt-Gowganda mining area, otherwise known as the Cobalt Camp, is historically one of the most prolific cobalt and silver mining areas in the world.
Over 600 million troy ounces of silver have been produced from mines in the area since 1903.
Between 1910 and 1989 the Gowganda area produced 60 million ounces of silver and 1.4 million pounds of cobalt, representing 11 per cent of the total silver and 6 per cent of the total cobalt production of the Cobalt-Gowganda camp.
The Cobalt-Gowganda mining district has recently been targeted by cobalt-focused players like Winmar Resources (ASX: WFE) and Battery Mineral Resources.
Krakatoa is undertaking a $525,000 capital raising to fund an exploration program that it plans to begin immediately.
The cost of the deal to the company is $50,000 in cash and the issue of 2.5 million shares and 2.5 million options.
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