Cove Resources to acquire titanium project

THE BOURSE WHISPERER; Diversified exploration company Cove Resources has announced the execution of a definitive agreement to acquire the advanced-stage Koivu Titanium project in Finland.

The agreements are with Swedish public company Endomines AB for a total consideration of €9 million (~A$11.2 million) plus a two per cent net smelter royalty.

Cove’s Due Diligence Study outcome supports mine production of a high quality titanium pigment concentrate to supply the European market, with first full year production planned for 2015.

Cove will complete scoping study in the next two weeks and then commence a Bankable Feasibility Study (BFS) for an initial 20 year/250,000 tonne titanium pigment concentrate output operation.

Consideration is €3 million cash paid over 27 months + 2 per cent net smelter royalty to Endomines AB (as seller) and a share component with Delta Minerals FZE equivalent to €6 million based at A$0.20 per Cove share – a significant premium to current share price.

 

Location of the Koivu Titanium Project relative to the port of Kokkola and TiO2 plants in the region. Source: Company Announcement

The acquisition of the Koivu Titanium Project will enable Cove to quickly progress from explorer to producer and become an international supplier of high quality titanium pigment feedstock.

 The project area hosts five titanium deposits with aggregated JORC Indicated and Inferred Resources of 68.7 million tonnes averaging 7.5 per cent titanium dioxide (TiO2), which equates to over 5 million tonnes of contained TiO2.

There is potential to expand the titanium resource through drilling as the current JORC compliant ore bodies remain open at depth, also the resource inventory can be significantly increased by proceeding to JORC estimates at other deposits at the project.

The Koivu Project also hosts potentially economic bi-products of magnetite and phosphorus which may complement the mining economics.