A newly discovered mineralized zone on Cobalt Power's Smith Project in the Cobalt Mining Camp, northeast Ontario. Source: Cobalt Power Group Inc.
Cobalt Power Group Inc. [COP-TSXV, CBBWF-OTC] shares were active Tuesday May 1 after the company said it had agreed to acquire Western Cobalt Corp., a private mineral exploration company that holds nine strategically located mineral claims in the eastern Athabasca Basin in northern Saskatchewan.
The shares were down 4.65% or $0.01 to 20.5 cents in morning trading Tuesday on volume of over 1 million. The 52-week range is $0.075 and 35 cents.
In an April 30, 2018 press release, Cobalt Power said the Western Cobalt properties cover approximately 20,130 acres (8,146 hectares) of highly prospective geology and are contiguous with UEX Corp.'s [UEX-TSX] West Bear Cobalt-Nickel Project.
UEX recently announced very high-grade cobalt-nickel results over substantial widths on the West Bear Project, including 2.0% cobalt, 1.26% nickel over 10.5 metres in drill hole WBC-001, and 0.73% cobalt and 0.36% nickel over 20.5 metres in drill hole WBC-005.
Western Cobalt's properties are also contiguous to claims held by UEX, ALX Uranium Corp. [ALI-TSXV, OTC-ALXEF, 6LLN-FSE], Denison Mines Corp. [DML-TSX] and IsoEnergy Ltd. [ISO-TSXV, ISENF-OTCQX].
Under the agreement, Cobalt Power is acquiring all of the issued and outstanding shares of Western Cobalt in exchange for the issuance, pro-rata, of 12.2 million common shares of Cobalt Power to the existing shareholders of Western Cobalt.
At closing, the shareholders of Western Cobalt will receive the benefit of a 2.5% net smelter royalty, of which 1.5% may be purchased by Cobalt Power at any time on or before the seventh anniversary of the closing date for $1 million in cash. Cobalt Power said this is an arm's length transaction and the transaction will not create any new insiders of the corporation.
Cobalt Power already has two projects in the Cobalt, Ontario camp. They included the 1,169-hectare Smith Cobalt Project, which is immediately east of a former mine that produced approximately 11 million ounces of silver and 100,000 pounds of cobalt.
The Canadian Cobalt Project covers 7,567 hectares and is with close proximity to several historic mines, including the former Keeley and Frontier mines, which together produced 10 million ounces of silver and 3 million pounds of cobalt over 60-years of mine life.
"This cobalt-nickel project in the Athabasca basin of Saskatchewan, and the exploration of cobalt in the Ontario Cobalt region, will increase Cobalt Power's property to 19,826.80 hectares," said Chris Healey, Vice-President of Exploration and director with Cobalt Power.
Cobalt Power Group recently announced that it is joining forces with Hochschild Mining Holdings Ltd. Under the alliance, Hoschschild committed to invest US$500,000 in Cobalt Power through a private placement of subscription units.
In conjunction with the investment, Hochschild received additional rights, including:
The right to nominate one director on the boardThe right to option and joint venture one of Cobalt's propertiesAn annual right to top up its percentage interest in Cobalt Power.