Talga Resources will create a wholly owned cobalt-focused vehicle to house its Swedish assets, allowing the material tech play to focus its attention on commercialising its graphite-graphene projects with investors welcoming the news.
The Sweden-headquartered subsidiary – to be named Talga Battery Metals AB – is part of a company restructure and will control Talga’s four highly prospective cobalt projects in northern Sweden.
The jewel in the crown of Talga’s cobalt assets is Kiskama, Sweden’s largest cobalt deposit which also hosts the valuable by-products of copper and gold.
Discovered in 1972 by SGU, Talga purchased Kiskama as part of the Teck Sweden package in 2012 and immediately set about confirming historical assays. The deposit has significant potential with only 1km of 7km strike historically tested and remains open in all directions.
Since then, Talga has built a suite of highly prospective cobalt mineral assets in parallel to its graphene-graphite project.
Its wholly-owned Ahmavuoma project covers 40km over three exploration licences and has returned high cobalt and copper grades near surface and over substantial widths while the Lautakoski project is a new discovery where a diamond drillhole on a ‘graphite target’ EM conductor intercepted strongly altered and broadly copper-cobalt-gold mineralised volcanic rock.
Talga will also spin out its Aitik East project, a polymetallic (Cu-Au-Ag-Mo) project with outcropping copper-gold mineralisation located only 25km from the 36 million tonnes per annum Aitik mine.
Importantly, the projects are all ideally located near multiple Li-ion “Gigafactories” which are currently under construction or planned in the European Union.
With most of battery minerals including cobalt currently imported into Europe from China and Africa, Talga’s Swedish deposits represent an important and strategic new source of supply.
With its cobalt assets being separately resourced, Talga can focus primarily on advancing its graphite-graphene projects to commercialisation in global energy and industrial markets.
The restructure will increase funding, development and future commercialisation options for the cobalt assets including potential spin-off of the subsidiary.
A cobalt focused vehicle is also able to pursue the value opportunity created by cobalt’s escalating price (up ~300% in two years to US$90,000/ton) and growing European battery market demand for locally and responsibly sourced cobalt.
A separate management team will be appointed to advance the cobalt projects through exploration and development.
With $12.15 million in cash at 31 March 2018, Talga said it was well positioned to execute the restructure, associated assessments and continue to progress its business plans.
A final decision on the commercialisation option for the cobalt is unlikely until early next year, ensuring adequate time to collect data, review, and select the best commercialisation option towards creating maximum value for shareholders.
This timetable allows Talga option holders sufficient opportunity to exercise their listed TLGOA options (expiring in December 2018) to participate in any potential spin-off.
Today’s news comes after Talga announced key appointments to its team to ramp up work on commercialising its graphene business and its MoU with Bosch regarding a development project in the field of utilising graphene in the synthesis of macroscopic structures.
Shares in Talga were trading 2.5c higher at 75c at 2pm AEST.