Marquee Resources took off this morning on news it had secured a deal to supply cobalt from its Canadian project to a big Chinese battery cathode maker.
The junior explorer (ASX:MQR) revealed today it had signed a non-binding agreement with Zhejiang Meidu Haichuang Lithium Battery Technology.
Marquee described the customer as “one of the most significant Chinese operating enterprises involved in the manufacture of battery cathode materials”.
Shares shot up over 62 per cent to an intra-day high of 12.5c just after market open on Wednesday.
Boss Charles Thomas said demand for cobalt was strong in China.
“The interest shown by numerous Chinese end users demonstrates the strong appetite for cobalt and in particular the potential product that Werner Lake could deliver,” he said.
“One thing that was evident from our China visit was the strong demand for cobalt sulphide projects, such as Werner Lake.”
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Marquee was drawn to cobalt late last year, when it announced it was buying Canada’s CO27, which had agreements to acquire the Werner Lake, Warner Lake East/West and Skeleton Lake cobalt projects.
Until that point the company had been solely focused on advancing its Clayton Valley lithium project in Nevada, USA, which is located about a 3.5-hour drive from Tesla’s mega-factory – the world’s largest lithium battery manufacturer.
Marquee will provide Zhejiang Meidu with a cobalt sample for independent testing within the next three months.
The pair will also start negotiations to enter into a formal binding off-take agreement.
Marquee currently has a 30 per cent stake in the Werner Lake deposit.