Traka seeks blue gold in Gorge Creek cobalt project
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Junior explorer Traka Resources has decided to go ahead and buy a majority interest in the Gorge Creek project in Queensland because of its “exciting” cobalt potential.
Traka (ASX:TKL) has exercised the option it acquired from private company Cobalt QLD Pty Ltd in November by paying a $40,000 fee. The company can earn a 51 per cent stake by spending $1 million on exploration over three years.
Investors liked the news, with shares hitting an intra-day peak of 5.2c — a 10.6 per cent gain over Wednesday’s closing price — before edging back to 5c.
The project lies 30 kilometres west of Aeon Metals’ emerging Walford Creek copper, cobalt, lead, zinc, silver deposit in the Mt Isa Inlier and Carpentaria Province.
“The lack of sampling or assessment for cobalt on the project offers a particularly exciting objective to pursue given Aeon’s recent findings,” Traka told investors this morning.
Cobalt prices rocketed 130 per cent last year, making it a top commodities performer among HSBC’s “Commodity Prices Snapshot”.
The surging price is largely due to rising demand from electric vehicle makers and constrained supply. Cobalt is a component of the lithium ion battery technology used in electric cars.
There are currently around two million electric vehicles on the road and that is set to rocket to over 500 million by 2040 by Bloomberg’s estimates.
Aeon’s findings indicate that high-grade copper and cobalt mineralisation in the area is linked to specific sedimentary rock units where they terminate against structures of the Fish River Fault Zone.
The regional-scale Fish River Fault Zone and the sedimentary host rocks to mineralisation found at Aeon’s Walford Creek project have been mapped all the way through to Gorge Creek.
“We’ve got the same mineralised structures passing from their ground into our ground,” Traka boss Patrick Verbeek told Stockhead. “We’ve got the same stratigraphic units that are host to the mineralisation in our ground.
“These are well mapped, well understood geological features in the area and we’ve also got 20-40 year-old historic exploration data, which shows that the faults in the Gorge Creek area all leak mineralisation.”
There are 30 kilometres of known but untested Fish River Fault Zone structures in the Gorge Creek project area with anomalous soil and rock geochemistry already indicating good prospectivity, Traka says.
The bright future for cobalt has prompted the company to make Gorge Creek its primary focus.
“Given that the cobalt price is what it is and the outlook is so good, it makes perfect sense for us to turn that into our primary focus,” Mr Verbeek said.
“We still have of course the same exposure to some extent with our interest in Musgrave for instance. That’s a nickel, platinum, cobalt style of mineralisation, geologically different to what we’ve got at Gorge Creek, but again a good exposure to that commodity and we’ll advance that along this year as well.
“But Gorge Creek is certainly a new focus for us and we just hope that we’ll emulate what Aeon has got.”
Traka is reviewing and re-processing historic exploration data in light of Aeon’s findings and plans to start field work after the current wet season, which will most likely be in April.
The company has about $2 million cash in the kitty following a recent capital raising and expects to have met most, if not all, of its expenditure commitment to earn its 51 per cent stake in the Gorge Creek project by the end of the current six-month field season.
“The hope is we will have generated drill targets and we will be drilling this year,” Mr Verbeek said. “I wouldn’t be surprised if we spent our full million in that period. If not we will have gone a long way to meeting our 51 per cent.”