THE BOURSE WHISPERER: Alloy Resources (ASX: AYR) claimed to have defined a strong cobalt-gold target within the company’s Ophara project, located around 50 kilometres west of Broken Hill in New South Wales.
Alloy Resources believes historical exploration outlined, what the company described as a sizeable area of cobalt-gold mineralisation at the Great Goulburn prospect.
The company said the size of the area defined and the presence of cobalt bearing gossans warrants a serious exploration effort at a time when both cobalt and gold are experiencing high levels of interest and demand.
Alloy pointed out that cobalt is receiving particular attention at present, with demand and price increased due to it being a key component in lithium batteries.
Cobalt is often produced as a by-product of copper production, therefore supply is not easily expanded.
A large amount of cobalt production (over 40 per cent) comes from the Democratic Republic of Congo which retains a high sovereign risk.
Given this combination of increasing demand and an uncertain supply response, Alloy believes that exploration for cobalt in a low risk jurisdiction is a sound strategy.
“We are fortunate to have timed the review and application for this area when markets are looking for new sources of cobalt to meet lithium battery related demand,” Alloy Resources executive chairman Andy Viner said in the company’s announcement to the Australian Securities Exchange.
“To also find that there is a significant gold association within the mineralisation makes this prospect quite compelling as we see some similarities to gold mineralisation elsewhere in the Curnamona Craton, particularly in South Australia.
“Surface rock chip and soil sampling has defined a 1.5 kilometre long zone of cobalt mineralisation at the Great Goulburn prospect which has been tested by only six widely spaced drill holes, four of which confirmed consistent subsurface mineralisation.
“These results warrant a closer look.
“Looking at the historical work we are also seeing that past explorers were targeting more Broken Hill style base metal mineralisation or Cloncurry style iron formation hosted copper-gold, so cobalt was not a focus and hence they have left some other interesting cobalt gossans similar to Great Goulburn for us to follow up.”