Cazaly has better luck second time around; buys Namibian cobalt project
Mining & Resources
Cazaly Resources’ second attempt at picking up a cobalt project in Namibia has worked out better – with the junior explorer deciding to go ahead with an acquisition.
Cazaly (ASX:CAZ) will acquire up to 95 per cent of a copper and cobalt project in Northern Nambibia called “Kaoko Kobalt”
The 967 sq km project is about 800km by road from Namibia’s capital city Windhoek and 750km from a port at Walvis Bay.
The news sent shares up 6 per cent to 5.2c in early Friday trade.
Investors are going nuts over cobalt stocks because of an anticipated growth in supply needed to satisfy demand from electric car battery makers.
Demand for cobalt is expected to increase 60 per cent between now and 2025 according to research by Canadian investment bank BMO Capital Markets.
The price of the commodity hit a decade-high of $US95,000 ($122,353) this year.
Canaccord Genuity recently revised its long-term (from 2025) forecast for cobalt pricing upwards by 32 per cent to around $US108,000 per tonne.
Cazaly announced in January it would not go ahead with the acquisition of a separate project in Namibia after a review of historic data failed to produce evidence of cobalt.
Until recently, Perth-based Cazaly has primarily focused on the exploration of gold, iron ore, nickel and graphite in Australia.
The Kaoko Kobalt project is close to Celsius Resources’ (ASX:CLA) Opuwo cobalt and copper project.
“This region in Namibia appears to be a significant emerging cobalt bearing belt having remarkable similarities with the Central African copperbelt in the Democratic Republic of the Congo (DRC) and Zambia,” managing director Clive Jones said.
Cobalt is a by-product of nickel and copper mining and the DRC hosts more than half of the world’s supply.