Northern Cobalt To Earn 80% Interest In The Brownfields Goodpaster Project

Australian resource company, Northern Cobalt Limited (ASX: N27) has struck a deal with Millrock Resources Inc to earn up to an 80 per cent interest in the brownfields Goodpaster Project in Alaska.

Goodpaster Project Acquisition by Northern Cobalt

In an announcement made on 17 October 2019, the company announced that it has entered into a binding term sheet with Millrock Resources via joint venture earn-in, up to 80% in the Goodpaster Project, located adjacent to the Northern Star’s (NST) Pogo Mine which has a total endowment of 10 million ounces of gold. On completion of the binding term sheet, the company appointed Mr. Duncan Chessell as the Managing Director.

Duncan’s 20+years of expertise in international business, cold climate logistics & operations and greenfields gold exploration with a strong leadership capacity, makes Duncan the logical choice to drive the company forward in this next phase of discovery and delineation of resources, says Len Dean, the company’s Chairman.

Following the release of the announcement, N27’s stock skyrocketed 107.5% during the intraday trade.

Binding Agreement Highlights:

  • Northern Cobalt has agreed to pay Millrock US$250,000 within 10 days to secure a 50-day exclusive option period;
  • Further payment of US$250,000 (at N27’s election) will extend the option period for a further 50 days, to 100 days in total
  • Millrock will use the funds to for the Pogo West Project, particularly to prepare drill access roads and other exploration activities and tenement rentals as agreed between MRO and N27.

Summary of the Earn-in agreement (Source: Company’s Report)

 

It is to be noted that during the sole funding earn-in period, the company has the right to trigger a once off “grace period”, allowing for a six months extension to meeting expenditure for a particular earn-in stage.

Support from two prominent Australian broking houses

To conduct due diligence on the Goodpaster Project, Northern Cobalt has signed a mandate with PAC Partners Securities and Taylor Collison to raise $1.5 million at 3.5 cents per share. The funds will also be used commence road works and logistics at the project to support the Q1, 2020 drilling season.

Both PAC Partners Securities and Taylor Collison have received firm commitments for a placement of $1.5 million at a price of $0.035 per share:

  • Tranche 1: ~$0.35m for 9.9m shares under remaining LR7.1
  • Tranche 2: ~$1.15m for 32.9m shares conditional on shareholder approval

Len Dean, Chairman Commented:

Northern Cobalt is very pleased to have the support of two prominent Australian broking houses in PAC Partners Securities and Taylor Collison for this potential company maker opportunity

Project Potential

The new Millrock Resources geophysical survey has detected a high conductivity response directly along strike from a recent gold discovery on NST’s adjacent claims with conductor appearing to be gently dipping and is therefore consistent with a low-angle regional shear zone that is known to host the adjacent Pogo Gold Mine.

The Initial exploration program for year 1, will aim to deploy 7,500m of diamond core drilling and utilise Lidar, field mapping, geochemical sampling and CSAMT geophysics surveys to unlock the structural controls and focus in on gold mineralisation on the West Pogo Prospect; as well as conduct regional work to identify further drill targets in this district scale system.

Duncan Chessell, MD Commented:

The potential Camp Scale of the gold system in evidence across the property from my recent field trip and the incredible results declared from neighbours Northern Star [ASX: NST] in recent announcements, puts this standout brownfields project head and shoulders above other opportunities assessed”

“The all year mine-road access available to this project, is a huge logistical and cost saving advantage over typical summer only – helicopter supported projects in Alaska.”

The company believes that the prospectivity of the entire tenement package is high, with intrusive granite batholiths providing a large engine room to drive fluids throughout the district and there is the real opportunity for multiple discoveries to be made in this area. The company will initially focus on the West Pogo area, but Northern Cobalt has committed to assessing the entire tenement package to delineate potential drill targets throughout the Area of Interest and potentially acquire more ground, adjacent to existing tenements if warranted. Earlier exploration work completed at the project includes; collection of over 40,000 surface geochemical samples and drilling of over 11km of drill holes, representing $15m of value and is a fantastic data set to build from.

 

Geology Team

Mr. Chessell, who is appointed MD, is bringing team of geoscientists to deliver high-quality field work and add value to the excellent Millrock team based in Anchorage and Fairbanks. The team include:

  • Justin Gum (Contract Principal Geologist)- He has worked throughout Australia in gold and base metals systems, through a 30-year career as a well-respected geologist. On the education front, he holds PhD, MGSA, MAIG, MAAG degrees.
  • Christine Lawley (Contract Exploration Manager) – She has 15 years’ experience in brownfields and greenfields gold, base metals and mineral sands exploration throughout Australia. On the education front, she holds MSc, RPGeo (Mineral Exploration), MAIG, MAusIMM degrees.
  • Kelvin Blundell (Consulting geophysicist) – He has 20 years of experience working on projects in Australia, Canada and Africa and currently consults to a dozen companies from juniors up to Rio Tinto. On educational front, he holds BSc (Hons), DipEd, MAIG, MASEG degrees.

Stock Performance

At market close on 17 October 2019, N27 stock was trading at a price of $0.083 with a market capitalisation of ~$2.64 million. The stock has a 52 weeks high price of $0.120 and 52 weeks low price of $0.025 with an average volume of ~ 167,876.

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