Perth-based Cyclone Metals has sealed a binding exclusivity agreement with Ewaah Cameroon on a “world-class” cobalt-nickel-manganese land package in the central African region. The deal gives the company the right to procure 100 per cent of the issued capital of the Camdu Corporation, a subsidiary of Ewaah, that has applied for a mining permit covering the prospective ground.
Cyclone says once the 1645 square kilometre mining permit is granted to Camdu by the mining officials in Cameroon, it will have the exclusive right to acquire the company.
The Nkamouna-Mada project, that takes in the renowned Nkamouna and Mada deposits, boasts a total non-JORC foreign measured and indicated resource estimate of 120.6 million tonnes at 0.23 per cent cobalt, 0.65 per cent nickel and 1.35 per cent manganese.
The deposits also include a total global non-JORC foreign resource estimate of about 323 million tonnes at 0.21 per cent cobalt, 0.61 per cent nickel and 1.25 per cent manganese.
To secure the ground, Cyclone will issue 50 million fully-paid ordinary shares to Ewaah at an assumed issue price of $0.005 per share, along with a further 50 million unlisted options to the company within five days of the mining licence being obtained.
The company will use its existing placement capability to issue the shares and says both parties will discuss the consideration payable for the award, subject to Cyclone's approval of due diligence work completed during the exclusivity period.
The Nkamouna and Mada deposits are in south-east Cameroon, about 400km from Yaoundé, the country's capital. The nearest town to the project is Lomie, about 25km west.
Management says the operation offers a solid infrastructure network with the nearest railway station running out of Belabo, about 250km away.
The project is accessible through a paved highway, has private logging routes, sound telecommunications facilities and is near adequate shipping hubs.
Nkamouna-Mada’s economic potential was first highlighted in the 1980s when the Cameroon Government issued a prospecting permit to previous owners, Geovic.
The company, through its subsidiary Geovic Cameroon, conducted several exploration campaigns focusing on the mineralised zone at the Nkamouna and Mada deposits, as well as finding additional targets that stretched across the area’s regional extents.
Geovic oversaw the discovery and refinement of technologies to economically recover cobalt, nickel, and manganese from Nkamouna-Mada, enlisting SRK Consulting to complete a feasibility study with Lycopodium Minerals and Knight Piesold.
Cyclone has been busy of late acquiring projects it views as undervalued and scrubbing them up. However, the deal for Nkamouna-Mada could see the company move into a new domain, with management describing it as a “gamechanger”.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
