Global Cobalt Moves In On High-Grade Project in Idaho Cobalt Belt

Canadian exploration and development company Global Cobalt (TSXV:GCO,OTCBB:GLBCF,FWB:3P0) is certainly getting its hands into multiple geographical pots. The company announced on Monday that it had secured a lease agreement – including an option to purchase – for the Iron Creek cobalt-copper property, located in the famed Idaho Cobalt Belt.

To be sure, grabbing a foothold in that area is significant, as Global Cobalt stated in Monday’s release that it is “the most prolific belt of cobalt mineralisation in the United States,” and there is plenty of historic data to suggest that Iron Creek holds a substantial exploration upside.

Global Cobalt CEO, Erin Chutter, saw Iron Creek as an “exciting” addition to the company’s cobalt project portfolio, stating that it “diversifies [the company’s] project mix at a time when cobalt is becoming increasingly important in the battery sector.”

Global Cobalt is starting out by leasing the property from the current owner, Chester Mining Company, for a term of 20 years. The agreement allows Global Cobalt to keep leasing the property for up to 60 years, and it may purchase the Iron Creek claims for a onetime payment at any time during the lease. Among other conditions, Global Cobalt must conduct a minimum of C$500,000 of exploration work over its first three years at the property, and it looks like the company is already excited to get started.

Big potential

Around 30,000 feet of diamond drilling and 1,500 feet of underground drifting has been conducted previously at Iron Creek. In particular, Global Cobalt is looking at a 1980 report from Noranda Exploration that found ”two distinct lenses of cobalt mineralization,” at the property. That company estimated a 1,050,000 tonne resource grading 0.61 percent cobalt and 0.3 percent copper for the first area, and set an average of roughly 0.48 percent cobalt and 0.24 percent copper for the second area.

Although the company will need to conduct further exploration at Iron Creek, Global Cobalt VP of exploration Paul Sarjeant noted that with the rich history of exploration at the property, the company already has “an extensive database from which to work that will allow us to quickly advance our exploration efforts.”

Giving further weight to the promise that Iron Creek could hold, Sarjeant also pointed out that the property “shares characteristics” with other cobalt deposits in the area, including Formation Metal’s (TSX:FCO) proposed Idaho Cobalt Mine.

US prospects

Global Cobalt already has a compelling asset in its Karakul Cobalt Project in Russia, with the company recently releasing an updated resource estimate and technical report for the project at the start of July.

However, with continued tensions between Russia and Ukraine, Global Cobalt is listening to investors and hedging its bets against geopolitical risk. As Chutter stated in Monday’s release, “Karakul continues to be important to the company, but some shareholders are interested in projects in other regions like our Canadian Werner Lake project and now this US based asset.”

Outlining the drive to the US a little more, head of corporate development Mitchell Smith said that “increased sanctions by Russian companies,” played a part in Global Cobalt’s decision to “reexamine other opportunities.” And, as for most companies in the lithium, cobalt or graphite spaces as of late, Tesla Motors (NASDAQ:TSLA) played into Global Cobalt’s decision making as well. As well as being located in a safer jurisdiction, Smith said that Iron Creek “provides a historic, high-grade deposit close to the proposed Tesla factory.”

Furthermore, the company is already well placed  to participate in the electric vehicle battery space through its off-take agreement with Beijing based Easpring (SSE:300073), a company that “provides battery grade material to a number of battery end-users,” including Panasonic (OTCMKTS:PCRFY) and LG Chem. Importantly, Smith noted that the off-take agreement includes material from any of Global Cobalt’s operations worldwide. “It’s a huge bonus for us,” he said.

What’s next?

Global Cobalt’s next move with Iron Creek will be to put an exploration project together to get a better understanding of the project. Like Sarjeant, Smith was confident that the company had a good starting point, stating, “there’s an enormous amount of information that we’ll be able to work through and plan an exploration program.”

Certainly, interested investors will want to keep an eye out for developments at the Idaho Cobalt Belt property.

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Global Cobalt is a client of the Investing News Network. This article is not paid-for content. 

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