Location of deposits in the Hazelton cobalt-copper-gold project.
Location of the Hazelton cobalt-copper-gold project in British Columbia, Canada.
In November 2017, New World Cobalt announced it had entered into an agreement with American Manganese Inc. (AmMang”) that provides it the right to earn an initial 60% interest in the high-grade Hazelton Project in British Columbia, Canada (see Figure 1). The Company subsequently announced (in December 2017) that it had satisfactorily completed due diligence on the Hazelton Project.
The Hazelton Project covers 10km2 and includes the historic Victoria Mine that operated intermittently between 1918 and 1941. During this period ore grades averaged 123.4 g/t gold and 2.8% cobalt. The Project also includes the historic Rocher Deboule and Highland Boy Mines, where substantial high-grade copper-gold mineralisation was recovered.
Mining at the Hazelton Project area ceased in 1952. Only limited exploration has been undertaken subsequently.
The Company is currently completing the compilation of historic technical information from the project area. Once completed the Company will use this information to help determine an appropriate forward work program and schedule. Details of this will be announced in due course.
The acquisition terms for the Hazelton Project comprise:
- cash payment of C$10,000 (paid in November 2017);
- further cash payment of C$10,000 and the issue of 50,000 Shares on satisfactory completion of due diligence (paid in December 2017);
- expending C$2,000,000 in qualifying expenditures over 4 years; with at least:
- C$100,000 to be expended by 25 October 2018; and
- C$200,000 (cumulative) to be expended by 25 October 2019; and
- paying AmMang C$10,000 in cash and issuing AmMang 50,000 Shares on or before each annual anniversary of the agreement until such time as New World Cobalt has earned its 60% equity interest.
Upon New World Cobalt earning a 60% equity interest in the Hazelton Project, New World Cobalt and AmMang shall establish a joint venture and contribute to subsequent expenditure on a pro-rata basis, or AmMang’s equity interest in the project will be diluted by 1.0% for every C$100,000 New World Cobalt spends on the Project. In the event AmMang’s equity interest in the Hazelton Project is diluted below 5.0%, its project interest will convert to a 2.0% NSR royalty interest.
In addition, New World Cobalt agreed to pay a finder’s fee to the party that introduced the opportunity to New World Cobalt that will comprise:
- an up-front payment of 200,000 Shares
- the issue of a further 200,000 Shares once New World Cobalt has expended C$200,000 on the Hazelton Project; and
- the issue of a further 300,000 Shares in the event New World Cobalt earns a 60% equity interest in the Hazelton Project.