TSX-V-listed Canada Cobalt Works is making headway in becoming a vertically integrated leader in Canada’s silver/cobalt heartland with the acquisition of “strategic assets” from PolyMet Resources in the town of Cobalt.
The company has announced a binding letter of intent to acquire the lab and mineral processing facilities of PolyMet, which is the only permitting and operating mineral and precious metals processing facility in northern Ontario silver/cobalt camp.
Canada Cobalt plans to move its headquarters to the lab and processing facility, which is adjacent to a rail line and a short distance from its Castle mine and Beaver property.
The transaction, Canada Cobalt said on Thursday, provided it with multiple advantages, including a high-capacity bullion melting furnace to pour payable silver and gold dore bars. The 731 m2 facility would also host the company's proprietary Re-2OX process for the extraction of cobalt, precious and base metals.
The company said that the sampling and analytical facility, specialising in high-grade mineralisation, provided commercial assaying, crushing, screening, grinding, bulk sampling, upgrading and smelting services, driving multiple revenue streams at a time when gold prices in Canadian dollars have hit new record highs.
PolyMet has demonstrated that in an eight-hour shift, it could pour up to 10 dore silver bars of 1 000 oz each.
"This deal builds dramatically on Canada Cobalt's current competitive advantages and opportunities - technological, on the ground and underground - in a rejuvenated silver/cobalt district recognised as the birthplace of Canadian hard rock mining,” said Canada Cobalt president and CEO Frank Basa.
Further, PolyMet is making inroads into e-waste business that can be leveraged through Canada Cobalt, its relationships and its Re-2OX process. The companies are processing material from mixed computer boards through the facility's shredder and ball mill to recover precious and base metals.
"We see some really exciting synergies here. Canada Cobalt's track record of success in this district made them the perfect fit to take the PolyMet lab and facility to the next level while I remain involved to assist Canada Cobalt from an operational standpoint.
"We appear to have entered a dynamic new cycle for silver and gold, which could really help to ignite this business in terms of its traditional drivers, while we're seeing exciting new opportunities in the e-waste sector that can be more fully exploited through this transaction,” PolyMet majority owner Gino Chitaroni said.
In terms of the transaction, PolyMet has agreed to sell 100% of its assets for total consideration of $650 000 in cash and shares.
PolyMet personnel, including Chitaroni, will be retained on contracts with share-based incentive clauses related to certain business milestones over the next 12 months.