The Redcastle project is adjacent to First Cobalt's Iron Creek property (pictured).
Emerging miner and explorer Phoenix Copper on Monday announced that Toronto-listed First Cobalt would earn into its Redcastle cobalt property on the Idaho cobalt belt, in the US.
The property shares a common border with First Cobalt’s Iron Creek property, which hosts an indicated cobalt and copper resource of 2.37-million tonnes, grading 0.32% cobalt and 0.61% copper.
First Cobalt CEO Trent Mell said that the Redcastle property was only 750 m east of the company's Ruby Zone cobalt/copper prospect, which is exposed at surface.
"The host rock sequence to the sulphide mineralisation is interpreted to extend to the Redcastle property, so we believe the prospectivity of this area is quite high."
In addition to the local infrastructure, First Cobalt also owns the only cobalt refinery in North America, located in Ontario. The refinery would receive cobalt from the Idaho operations.
Phoenix CEO Ryan McDermott said that the company was “delighted” to be partnering with First Cobalt.
He said the capital cost savings to Phoenix were likely to be considerable, given that the Redcastle ore would be mined and processed as an extension to First Cobalt’s Iron Creek mine.
“Both Phoenix and First Cobalt recognise the potential future synergies as we work together on the Idaho Cobalt Belt, whilst at the same time enabling us to focus on our base and precious metals projects at Empire,” said McDermott.
In consideration of signing the agreement, First Cobalt would pay $50 000 and issue 200 000 unrestricted shares to Phoenix. The Canadian company could earn a 51% interest in the Redcastle property by spending at least $1.5-million in exploration over three years, and by paying a further $100 000 to Phoenix on the third anniversary of the agreement.
Subject to the completion of Phase 1, First Cobalt may earn an additional 24% interest by spending another $1.5-million over two years and by paying a further $150 000 to Phoenix in cash or the equivalent in unrestricted First Cobalt shares. Thereafter, the companies would enter into a joint venture.