Quest Minerals shifts focus to Austrian cobalt; shares surge 78pc
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Quest Minerals has shifted focus from gold in Western Australia to cobalt in Austria in a move that will see a restructure of its board and a rebranding of the company.
The ASX-listed minnow has inked a deal to buy Austrian Projects Corporation, which owns eight projects prospective for cobalt, nickel, copper and gold. The sites include historical mines and workings.
Investors piled into the stock (ASX:QNL) which gained as much as 78 per cent to hit a high of 5.7c before cooling slightly to 5.3c in Tuesday afternoon trade.
Four exploration concessions — covering 44 sq km — have the potential to produce cobalt. The areas include 78 exploration permits valid until 2021.
Once the deal is done and dusted, Quest will carry out a two-year exploration program focusing on cobalt, nickel and copper at the Leogang and Seekar projects.
At Leogang, historical exploration results returned 1.95 per cent to 15.76 per cent cobalt, 1.29 per cent to 12.7 per cent copper and 1.55 per cent to 812 per cent nickel.
At Seekar, high-grade massive sulphide ores up to 22 per cent copper and 850 grams per tonne silver were reported in historical exploration results.
The other five exploration concessions — covering 170 sq km — have the potential to produce gold. These consist of 300 exploration permits valid until 2019.
Samples from a historical underground mine at the Schellgaden North and South projects yielded gold grades up to 93 grams per tonne.
There are some 30 historical mines and workings at Schellgaden North and South over a 30km strike length.
The acquisition is for 186 million shares in Quest, 65 million options and 240 million performance shares.
New board members and name change
Eagle Graphite executive vice president and former Earth Heat Resources managing director Torey Marshall will join Quest as managing director and chief executive officer.
Mr Marshall will replace current managing director Jerome Vitale.
Former JP Morgan investment banker and Barclays private equity investment manager Hayden Locke will join as non-executive director.
Quest will be renamed “High Grade Metals” once the transaction has been completed.
Quest will also raise $4.5 million at 3c per share to fund exploration across its Austrian projects.
The transaction requires shareholder approval and re-compliance with Chapters 1 and 2 of ASX Listing Rules.
Quest has a market cap of around $6 million.