MinRex quick off the mark with maiden cobalt resource for NSW project; shares spike 33pc
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Special report: MinRex Resources has delivered an initial cobalt resource for the Pacific Express project in NSW less than three months after announcing the planned acquisition.
Investors loved the news, sending the company’s (ASX:MRR) share price up 33 per cent to an intraday high of 6.5c.
MinRex has proven up a JORC-compliant resource of 697,000 tonnes at 1157 parts per million (ppm) – or 0.12 per cent – cobalt, 9043ppm nickel and 39.5ppm scandium at the Pacific Highway prospect.
This equates to contained metal of 806 tonnes of cobalt, 6301 tonnes of nickel and 27.5 tonnes of scandium respectively.
JORC compliance refers to the mining industry’s code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.
This marks the completion of the pre-acquisition due diligence on the Pacific Express project and the geology team has delivered a positive recommendation to the board.
“Of significance is the cobalt grade, which the geology team believes ranks highly when compared with other Australian projects, and the potential to materially expand the resource size with more exploration work followed by a targeted drilling program,” executive director Simon Durack said.
Anything above 0.1 per cent cobalt is considered economic at the current cobalt price.
The price of cobalt surged to a record high of $US91,500 ($119,848) per tonne in May this year from a low of $US21,750 per tonne in February 2016. That is a 320 per cent increase in the past two years.
This is due to a severe supply shortfall that has already started to emerge and rapidly rising demand from electric vehicle and battery makers.
MinRex’s geology team believe the resource can be substantially expanded with incremental exploration work on high priority areas, geological modelling and ultimately a targeted drilling program.
The initial focus of the expanded exploration program will be on the Pacific Highway prospect, where high-grade cobalt intersections up to 6000ppm cobalt have been confirmed.
This special report is brought to you by MinRex Resources.
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