Australia-based Tyranna Resources will acquire 100 percent of private company US Cobalt, which operates the Goodsprings project in Nevada.
Tyranna has already paid US$100,000 cash for an exclusive option agreement. It will issue 141.2 million shares, with 25 percent of shares subject to voluntary escrow, to US Cobalt at a price of 1.7 cents per share for a total of approximately US$2.4 million.
“This is an outstanding deal for Tyranna and our shareholders which we have secured via a scrip issue,” Bruno Seneque, managing director of Tyranna, said on Tuesday (August 21).
The Goodsprings cobalt and base metals project is comprised of 329 mining claims covering 6,580 acres about 48 kilometers southwest of Las Vegas in Southern Nevada.
“Historical mining results suggest that this area holds some of the highest grade cobalt mines that can be found in the district,” Seneque added.
According to the company, in the 1920s mines in the area produced approximately 20 tonnes of cobalt-rich ore from copper mining, and historical grades of between 6 and 29 percent were reported.
Earlier this year, rock chip samples at Goodsprings returned a range of polymetallic minerals with grades of up to 1 percent cobalt, 22.5 percent copper and 30 percent zinc. They were hosted in vein, bedded and replacement deposits throughout the project area.
Additionally, initial stream sampling identified two main cobalt anomalous zones coincident with copper, lead and zinc at the Whale mine, along with copper and lead to the south of the Rose mine.
“No modern mining techniques have been used here and we are confident that good exploration and mining methods will handsomely reward the company here at Goodsprings,” Seneque added.
The deal has yet to be approved by shareholders, who will meet in September. Approval will also be required for the issue of 30 million options, which forms part of the consideration outstanding.
Aside from its stake in US Cobalt, Tyranna Resources holds interests in the Eureka gold mine, the Jumbuck gold joint venture and the Wilcherry gold and base metals asset. The company is also the second-largest shareholder in Kairos Minerals (ASX:KAI) and holds shares in Orinoco Gold (ASX:OGX).
On Tuesday, shares of Tyranna closed flat in Sydney at AU$0.14.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.