24 Aug Cobre joins copper hunt in elephant country
Cobre Limited has pulled off something of a coup, securing 8,100 square kilometres of ground over the emerging Kalahari Copper Belt in Botswana. Cobre joins a star-studded cast of explorers and developers now hunting in this rich copper jurisdiction, with neighbours including Sandfire Resources and Cupric Canyon Capital, both of whom are currently developing nearby mining operations.
Cobre’s move into southern Africa’s ‘elephant country’ comes via an agreement for it to acquire a controlling interest in privately held Botswanan explorer, Kalahari Metals. Under the terms of the agreement Cobre will ultimately acquire 51 per cent of Kalahari with the balance being held by Metal Tiger Plc, a mining investment group that is already a shareholder in both companies – Metal Tiger will end up with around 21 per cent of Cobre as it dilutes its position in Kalahari.
Cobre is no stranger to stealing the headlines after it leapt onto the mining scene earlier this year. The company listed on the ASX in January 2020 after raising $10 million to fund the exploration of the company’s flagship copper-zinc project at Perrinvale in the Eastern Goldfields of Western Australia and was quickly on the ground testing its high-profile discovery.
Its drilling program at Perrinvale continues to deliver solid results and has thus far defined a volcanogenic massive sulphide, or “VMS” copper trend over close to 1km of strike. High-grade copper intercepts from drilling include 5 metres at 9.75 per cent copper with 34 g/t silver and 12 metres at 2.86 per cent copper with 10.2 g/t silver.
However, the ambitious Cobre is clearly looking to bulk out its portfolio with the acquisition of Kalahari Metals, which is now the second largest land holder on the Kalahari Copper Belt, in Botswana.
The belt straddles the Botswanan-Namibian border in the north of the country and extends over more than 1,000 km of strike from the Shinamba Hills in northern Botswana to Klein Aub to the south in Namibia. It is rated by the United States Geological Survey as one of the most prospective regions in the world for ‘yet-to-be discovered’ sediment hosted copper deposits and is rapidly becoming an increasingly popular address to be sinking the drill bit.
The Kalahari copper belt is regarded as being analogous to the famous Zambian Copper Belt that straddles the Zambian-Congolese border, 1,000km to the north east of the project area. The Zambian copper belt hosts the highest-grade sediment hosted copper deposits in the world, estimated to contain in excess of 5 billion tonnes of copper.
It extends over 450km and plays host to a number of massive company-making copper-cobalt deposits including Ivanhoe Mine’s amazing Kamoa-Kakula discovery and Barrick Gold’s Lumwana copper operation. This one terrane in central Africa accounts for around 20 per cent of global copper production, perhaps providing a glimpse at the future potential of the Kalahari.
In comparison to the mature terrane in Zambia, exploration across the Kalahari is relatively early in its genesis but has already resulted in a number of major discoveries. Deposits currently being developed in the Kalahari include Cupric Canyon’s Zone 5 discovery that weighs in at an impressive 91.7 Million tonnes at 2.13 per cent copper and 22 g/t silver and Sandfire’s T3 deposit at 47.0 Million tonnes going 1.13 per cent copper and 16 g/t silver.
Sandfire took control of the T3 deposit in the middle of 2019 via the take-over of MOD Resources for a cool $167 million.
We believe in the untapped potential of the Kalahari Copper Belt, and the ability of experienced local operators to deliver substantial exploration success. This transaction not only gives Cobre exposure to the second largest package of KCB tenements in Botswana, but also expands and diversifies our copper exploration activities beyond Western Australia. While our primary focus remains the ongoing exploration of the Perrinvale high-grade VHMS Project, the Kalahari Metals JV provides another exciting opportunity for Cobre and its shareholders.
Cobre’s ground holding in the Kalahari copper belt is made up of 4 key project areas that extend from the regional centre of Maun in the east to the Namibian border in the west, covering 350km of potential strike. The project areas include the Okavango, Ngami, Kitlanya East and Kitlanya West tenure and cumulatively cover a massive 8,100 square kilometres of the belt. The tenure is predominantly 100 per cent owned by Kalahari Metals however several of the tenements within the Okavango project are subject to joint venture.
Under the terms of the acquisition, Cobre will pay 21.4 million shares, or 17 per cent of its issued capital, for the 51 per cent holding in Kalahari Metals. The company will also co-fund exploration over the project area for the next two years to the tune of $1.75 million. Cobre’s contribution will be funded via existing cash reserves, with the company’s coffers boasting a cash balance of over $8 million at the end of the 2020 financial year.
Recent exploration by Kalahari Metals has included airborne magnetic and electromagnetic surveys across the project areas with soil sampling confirming mineralisation. Drilling of these targets is already underway at Kitlanya East, providing a welcome kick-start to Cobre’s exploration program in Africa.
The copper price is in sync with gold and is currently on a tear, heading towards a 5 year high – all of which augers well for the $12m market capped Cobre.
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