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In line with its plans to farm out lithium and keep cobalt, MetalsTech is picking up another cobalt project in Canada.

MetalsTech (ASX:MTC) has struck a binding deal to acquire the Bay Lake North cobalt project for an initial $C100,000 ($102,900) in cash and 750,000 shares.

The company has also agreed to spend at least $C600,000 on exploration in the first two years, as well as pay a further $C100,000 and issue another 4 million shares in stages as deferred consideration.

The 10,600-hectare Bay Lake North project is located about 15km west of the town of Cobalt, Ontario and adjoins MetalsTech’s existing Bay Lake project.

MetalsTech says the acquisition triples the size of its project area.

The news briefly sent shares up 8.3 per cent to an intra-day high of 13c before the gains were reversed. Shares were trading at 11c at 11.40am AEST.

MetalsTech (ASX:MTC) shares since the company made its debut in February.
MetalsTech (ASX:MTC) shares since the company made its debut in February.

Ontario is the home of one of the world’s most prospective cobalt districts outside the Congo – the historic “Cobalt Camp”.

The Cobalt Camp is historically the most prolific cobalt landholding in Canada, having produced 50 million pounds of cobalt and 600 million ounces of silver over six decades.

It was originally the site of a silver mining rush, but in more recent times the electric vehicle revolution has sparked an increase in exploration for cobalt.

Managing director David Riekie told Stockhead that while the Bay Lake North project is located about 10 to 15km away from the Cobalt Camp, he believes the prospective ground extends much further than just that area considered to be part of the Cobalt Camp.

“That cobalt plate is much bigger than just the Cobalt township and the cobalt centre,” he said.

“You’ve got the epicentre and we’re just on the edge of that epicentre, where we think it hasn’t been explored to best effect because they didn’t explore. They found some surface mineralisation, sunk a shaft and drift mined. So we think with those indicators, we’re on to something.”

While the Bay Lake North project has been the subject of both historic and recent exploration, it has been focused on base and precious metals but not cobalt.

MetalsTech, however, has already pinpointed three potential “walk up” targets that it plans to drill in mid-August.

In April, the company revealed it planned to farm-out out the lithium projects it floated on back in February and commit its resources to its cobalt projects.