AUSTRALIA tin developer Elementos Limited has sold five Cloncurry copper-cobalt-gold mining lease to Hammer Metals as doubts emerge over the viability of the leases.
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Elementos told the Australian Stock Exchange last week it was dissolving its three-year joint venture with Chinalco Yunnan Copper (CYU) and subsequently selling five north-west Queensland mining leases to Hammer Metals.
Managing director of JV partner Chinalco Paul Williams said there was “significant uncertainty” the mineral resource was as big as earlier explorations had indicated.
“The current view is that while the mineralisation may extend along the strike zone and at depth, there remains significant uncertainty that a resource of the size of CYU’s stated exploration target can be established,” Mr Williams said.
“Furthermore follow-up drilling would be deep (+300m) and at significant additional cost.”
The five leases, known as the “Millennium” leases, (MLs 2512, 2761, 2762, 7506 and 7507) are situated on the northern projection of the Pilgrim Fault, near Cloncurry.
The Millenium leases are 50km north of Hammer Metals’ Kalman deposit and 16km west of the Rocklands copper-cobalt mine.
Previous drilling indicates the potential for significant copper-cobalt-gold mineralisation in the area.
Hammer Metals was more upbeat about the future of the leases.
It released a statement saying cobalt was a significant contributing metal in the Millennium mineralisation and was a critical metal in the production of Lithium Ion batteries.
“According to analysts a global supply shortage is possible with Tesla alone likely to increase the global demand by 10 per cent per annum,” the company’s statement said.
Hammer will pay $57,950 (including the replacement of an environmental bond) to Elementos for the leases and issue 500,000 shares to Chinalco Yunnan Copper Resources.
Elementos CEO Tim McManus said the company’s focus was on the staged development of their Cleveland tin, copper and tungsten project in northwest Tasmania and getting to positive cash flow in the shortest possible time.
“We see the sale of Millennium as releasing value from non-core assets to assist us in achieving our goals,” Mr McManus said.