New World Resources to Demerge US Cobalt Assets

THE BOURSE WHISPERER: New World Resources (ASX: NWC) is to spin its American cobalt projects into a new company.

New World Resources informed the market it intends to pursue a demerger of its portfolio of cobalt assets in North America, subject to shareholder and other requisite approvals.

The company came to this decision following a strategic review of its asset base considering the ongoing resource and exploration drilling program being carried out at the company’s high-grade Antler copper deposit in in Arizona, also in the USA.

The company believes its current focus at Antler detracts from the value of its cobalt assets, which it thinks should now sit in a separately listed vehicle specifically focused on progressing their exploration and development.

New World cited the recent rise of the global cobalt price, saying that since the start of 2021 the price of cobalt has risen by more than 50 per cent from ~US$33,000/tonne to ~US$50,000/tonne (London Metals Exchange).

This rising price is widely attributed to increasing demand for minerals that are integral in the production of electric vehicles, including cobalt.

Since 2017 New World has held a 100 per cent interest in two cobalt projects in the United States – the Colson cobalt-copper project in Idaho and the Goodsprings copper-cobalt project in Nevada.

Between 2017 and 2019 the company focused on, and undertook extensive exploration programs at, these projects.

The cobalt price peaked at more than US$95,000/tonne in mid-2018, and for a period the company’s market capitalisation exceeded $40 million, which is where it would like to be again.