Highlights
- EMC has secured the Mukinbudin Uranium Project (MUP) located in Western Australia which hosts a historical Inferred Resource (2004 JORC compliant)
- EMC has executed a term sheet with Cobold Metals Ltd (Cobold) which will see Cobold acquire the MUP along with EMC’s Northern Territory Uranium Projects – The Amadeus and Georgina projects
- Cobold will seek to list on the ASX in Q4 2024, Henslow Advisers has been appointed as Lead Manager
- Post IPO, EMC will retain an indicative 22.8% equity interest in the new listing with an implied market value of $2.6m
- Members of the Cobold Board and current shareholder base were instrumental in the listing of Alligator Energy.
- Uranium is the key input to the production of nuclear energy which is a zero-carbon emission clean energy source
- Coupled with the assets being located in Tier 1 mining jurisdictions, Cobold has significant exposure to the right commodity, at the right time
“Cobold, together with its experienced management team, provides a great home for EMC’s Uranium development aspirations. This transaction allows EMC to continue to focus on its core gold and critical mineral assets whilst giving shareholders maximum upside to its uranium strategy. The Uranium market outlook continues to be very strong with nuclear demand expected to continue outpacing supply over the mid-term to enhance long-term energy security and attainment of net-zero goals”.
CEO and Executive Chairman, Mark Caruso commented:
Everest Metals Corporation Ltd (ASX: EMC) (“EMC” or “the Company”)is pleased to announce that the Company has acquired the Mukinbudin Uranium Project (Mukinbudin) located in the wheatbelt region of Western Australia, 300km northeast of Perth (Figure 2). Further, EMC has executed a non-binding Term Sheet (Term Sheet) with public unlisted Cobold Metals Ltd (“Cobold”) which will see Cobold acquire a 100% interest in Mukinbudin along with EMC’s Northern Territory Uranium Projects – The Amadeus and Georgina projects (Northern Territory Projects) (Figure 5). Cobold will seek to list on the ASX in Q4 2024, post a $5m IPO backed by Henslow as Lead Manager. Post IPO, EMC will retain am indicative 22.8% equity interest in the new listing with its investment having an implied market value of $2.6m.
THE URANIUM PACKAGE
The Company’s uranium projects package cover an aggregate area of 10,417 km2 in the Northern Territory and Western Australia (“WA”) (Table 1). EMC’s Uranium projects are located in the best mining investment jurisdictions and the best Practices Mineral Potential territories, which rates regions based on their geologic attractiveness, and the Policy Perception Index, reported in Fraser Institute Annual Survey of Mining and Exploration Companies, 2023 (Table 2)[1]. The Northern Territory has a long history of uranium mining and has some of Australia’s most significant and highest-grade uranium deposits. The Northern Territory currently contains around 30% of Australia’s low-cost uranium resources[2]. Australia is the world leader with 28% of the contained uranium resources 3, yet its full potential remains untapped. Numerous uranium deposits and exploration prospects have been outlined in WA by various companies over the last 50 years, with significant potential remaining to outline and increase uranium resources.
Table 1- Summary of EMC’s Uranium Exploration Projects
| Project | Location | Area (km2) | No. of Tenements | Target Type |
| Mukinbudin | Western Australia | 210 | 6 | Paleochannel |
| Georgina | Northern Territory | 5001 | 8 | Roll front, Paleochannel |
| Amadeus | Northern Territory | 5206 | 7 | Paleochannel |
| Total area: 10,417 km2 | ||||
Table 2- Fraser Institute Annual Survey of Mining Companies, 2023
| Index | Western Australia | Northern Territory |
| Best Practices Mineral Potential Index | 1st | 3rd |
| Mining Investment Attractiveness Index | 4th | 8th |
Figure 1: Location map of EMC’s Uranium Projects
Uranium is a critical mineral that has emerged as one of the most important energy resources over the past 60 years. Uranium for nuclear technology extends beyond energy production to the production of medicines for life saving diagnosis and treatment. The global drive for a quicker and more affordable clean energy transition is expected to drive uranium prices higher as governments adopt nuclear fuel to achieve stringent carbon emission reduction goals. Consequently, analysts are swiftly revising long-term uranium price forecasts, anticipating that supply will not keep pace with the soaring demand in the next decade.
Global demand for uranium was forecasted to reach 209 million pounds of U3O8 by 2035. While demand will be growing constantly, supply of uranium was expected to drop over time. It was forecasted that new assets will be required to fill that supply gap[3].
MUKINBUDIN PROJECT
The Mukinbudin Project is located near the eastern wheat belt town of Mukinbudin, approximately 300km northeast of Perth and 80 kilometres north of Merredin. The Mukinbudin township has a population of 350 with easy access to Great Eastern Highway and railway infrastructure. The entire project area is covered by freehold farmland used primarily for broad acre wheat production. The project covers 6 granted exploration licences (Tenements E70/4751, E70/4752, E70/4770, E70/4800, E77/2316 and E77/2344) covering a total area of 219km2 with over 80km of strike length in a confirmed paleochannel (Figure 2).
Figure 2: Location map of Mukinbudin tenements
Geology and Exploration
The Mukinbudin Project is located in the Archaean age Yilgarn Craton of Western Australia. The geology of the area is poorly understood due to the lack of outcrop. Regional geology at Mukinbudin consists of Archaean granitoid rocks that intrude older granite gneiss and local inliers of mafic greenstone rocks.
In 2006, Mindax Energy Limited (“Mindax”) formed a joint venture with Heathgate Resources to explore for sedimentary uranium in the wheat belt of Western Australia. The Joint Venture was formed in response to hydro-geochemical research conducted by CRC-LEME in the Yilgarn-Avon region of Western Australia[4]. Drilling commenced in 2008 and consisted of air core traverses with 200-400m hole spacing and 2-5km line spacing. Then, infill drilling has been carried at both the Yandegin and Jindarra prospects. A total of 510 holes of scout drilling for 39,195m was undertaken until 2014, however, approximately 40% of the paleochannel strike length of 80km remains undrilled and untested.
Figure 3: Mukinbudin uranium mineralisation[5]
The uranium mineralisation has been classified as roll-front mineralisation. It is hosted by carbonaceous sand and clay within a Cretaceous palaeochannel system. Uranium mineralogy includes uraninite and coffinite and mineralisation occurs on the contact of oxidised sands and reduced clayey sands and generally located at depths of 30m and 60m, much shallower than South Australian uranium deposits. This type of sandstone uranium deposits are amenable to In Situ Recovery (ISR) extraction, a cost-effective production method[6].
In 2011, Mindax reported an inferred JORC 2004 resource of 6.2Mt @ 237ppm U for (3.25Mibs U3O8) over two areas of Jindarra and Yandegin by using a 100ppm (0.01%) U3O8 cut off, as the first uranium resource estimated on a prospect in the Wheatbelt of Western Australia[7].
Cautionary Statement:
The mineral resource referred to above were reported by a former owner (Mindax, 2011) rather than the Company. The mineral resource has not been reported in accordance with the JORC Code 2012. A Competent Person has not done sufficient work to disclose the mineral resource in accordance with the JORC Code 2012 and it is possible that following further evaluation and/or exploration work that the confidence in the prior reported mineral resource may be reduced when reported under the JORC Code 2012.
Both Jindara and Yandegin deposit areas remain open along strike with potential for outlining significant additional uranium mineralisation. Uranium mineralisation/ore bodies occur as large tabular sheets or multiple roll fronts. An Exploration Target under the JORC Code 2012 for the mineralisation at the Jindarra and Yandegin deposits has been estimated (Table 3).
Table 3- Mukinbudin project Exploration Target (JORC 2012), reported at 100ppm U3O8 cut-off
| Deposit | Tonnage range (Mt) | Grade range (ppm) | Metal range (MIbs) | |||
| Lower | Upper | Lower | Upper | Lower | Upper | |
| Jindarra | 1.68 | 2.05 | 154 | 300 | 0.91 | 1.36 |
| Yandegin | 3.92 | 4.79 | 200 | 245 | 1.72 | 2.57 |
| Total | 5.6 | 6.84 | 213 | 260 | 2.63 | 3.93 |
- The potential quantity and grade of mineralisation is conceptual in nature
- The Exploration Target is reported as a range of grade and tonnages for the project based on drillhole data statistical confidence limits and various assumptions of continuity
Cautionary Statement:
The potential tonnage and grade of this Exploration Target is conceptual in nature, although it is based upon actual sampling. There has been insufficient exploration to estimate a mineral resource and it is uncertain that further exploration will result in the definition of a Mineral Resource.
The Exploration Target has been defined by the generation of mineralisation wireframes around aircore and diamond holes drilled vertically at the Jindarra and Yandegin prospects. Drill spacing is at various grid spacings, from 50 m x 50 m up to 600 m by 200 m. A total of 196 aircore holes and 3 diamond holes have been used to define the mineralisation wireframes for definition of the Exploration Target. The mineralisation wireframes have been defined above a broad 100 ppm U3O8 cut-off and grades were estimated by ordinary kriging into 50 mX by 75 mY by 5 mZ blocks. A top cut (cap) of 1500 ppm U3O8 was applied to one metre downhole composite.
A summary of the important assessment and reporting criteria used for this Exploration Target and exploration results announcement is provided in Appendix 1 – JORC Table 1 in accordance with the checklist in the Australian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (The JORC Code, 2012 Edition). Criteria in each section apply to all preceding and succeeding sections.
The Mukinbudin Project has been held by Crucible Resources Pty Ltd (“Crucible”) from 2016 onwards. Crucible have undertaken infill gravity survey of 20 traverse lines, totalling 519 stations complementing the project wide gravity surveys completed by Mindax. Furthermore, project wide passive seismic surveys, for a total of 78 lines comprising 1430 station points, has been completed at Mukinbudin by Crucible. Survey lines were orientated E-W and N-S, with variable line spacings, and using a nominal along line station spacing of 100m or 200m. The passive seismic surveys completed has delineated 3D shape of uranium enriched paleochannel (Figure 4). Crucible has identified three new additional targets that justify drilling in future exploration programmes, with each potentially representing an individual uranium deposit. These targets have returned U grades of 200-800ppm U from 600m-2km spaced aircore drill line.
Figure 4- 3D view from passive seismic survey lines and the modelled acoustic bedrock where the interpreted paleochannel is highlighted by the cool colours
The Mukinbudin Project has the potential for several multi-million-pound uranium deposits that could support a long life mining and processing operation. The Mukinbudin paleochannel with a strike length of 80km is under explored with 40% remaining completely untested. The Company looks forward to the exploration commencing at the project in late 2024, once Cobold have completed the IPO and listed on the ASX.
Material Terms of the Acquisition
EMC has executed a Binding Head of Agreement (Agreement) to acquire a 100% legal and beneficial interest in the Mukinbudin project tenements from Crucible.
An initial consideration, includes a non-refundable cash deposit of AUD$50,000
The deferred consideration, comprises:
- Cash payment of AUD$100,000; and
- 3,500,000 Shares in the Listing Entity (with a total value of $700,000 at a deemed issue price of 20 cents per Share)
The deferred consideration is payable upon the successful listing of Cobold on the ASX, at which point, Cobold will assume the deferred consideration obligations relating to the Mukinbudin project.
NORTHERN TERRITORY- GEORGINA & AMADEUS PROJECTS
The Northern Territory tenement package covers an area of 10,208km2, and comprises of two areas – the Georgina tenure (5,001km2) located 220km northeast of Alice Springs and the Amadeus tenure (5,207km2) located 150km west of Alice Springs Amadeus and Georgina tenures in NT with 15 exploration licences covering 10,200km2, located to the northeast and west of Alice Springs[8].
Figure 5: Location of Amadeus and Georgina tenements
Geology and Exploration
The Georgina tenements lie within the southern Georgina Basin includes strata of Neoproterozoic, early Palaeozoic (Cambrian to Ordovician) and Devonian age. The Neoproterozoic succession comprises the Plenty, Aroota, Keepera and Mopunga groups; early Palaeozoic rocks are assigned to the Shadow, Narpa, Cockroach and Toko groups. Devonian strata are included within the Cravens Peak beds and Dulcie Sandstone. The Palaeozoic successions of the Georgina Basin contain base metals mines, prospects, occurrences and anomalies that can be assigned to several Cu and Pb-Zn mineralisation styles. The basin is also very prospective for phosphate over large areas of its central and northern parts, hosting several substantial deposits. Other prospective commodities within the Georgina Basin include diamonds, manganese, LCT-bearing pegmatites, REE and uranium. Neoproterozoic and/or Palaeozoic successions of the southern Georgina Basin have also been explored for gold and platinum group elements.
At Amadeus, the Basin overlies Paleo-to Mesoproterozoic metamorphic and igneous basement domains of the Arunta Province (north) and Musgrave Province (south). It locally contains up to 14 km of Neoproterozoic and Palaeozoic sedimentary rocks. The Amadeus basin is a salt basin historically explored for hydrocarbon resources. Oil and Gas have been produced and exported from the region since the mid-80s. The sedimentary rocks of the basin contain mineral and industrial commodities. The region is characterised by a large variety of mineral deposits, including sediment-hosted polymetallic mineralisation, particularly copper-lead-zinc, potential Mississippi Valley Type (“MVT”) Pb-Zn mineralisation, and possible REE mineralisation, uranium, manganese, phosphate, barite, and gypsum.
Limited historical exploration has been completed throughout the Georgina and Amadeus tenement areas. Geologically the area is poorly understood due to limited outcrop, weathered profile and a thin veneer of aeolian sands masking vast areas of the region. No regular surface geochemistry sampling has been undertaken on the Georgina and Amadeus tenement packages. Historical drilling has primarily consisted of shallow RAB/ RC holes with a limited number of deep stratigraphic/petroleum holes.
The Company carried out modelling and interpretation of existing geophysical data over the Georgina and Amadeus Projects. The geophysical database including Gravity, Magnetics, Radiometric and Electromagnetics (AusAEM) has been processed and interpreted. Interpreting the airborne magnetic, gravity and radiometric data proved challenging due to the complicated geology, variable regolith and changing of the metamorphic grade and structural history of both the Georgina and Amadeus Projects. Nonetheless, despite these challenges, multiple prospective anomalies and high-priority target areas spanning 220km2 have been delineated across ten specific targets[9].
Multiple large uranium anomalies and paleochannel uranium targets identified at the Georgina and Amadeus (Figure 6 and 7).
Figure 6: Priority target at the Georgina exploration project
Figure 7: Priority target at the Amadeus exploration project
OVERVIEW OF THE EMC AND COBOLD TRANSACTION
Who are Cobold?
Cobold Metals Ltd (Cobold) is an Australian public company that is preparing an initial public offer (IPO) of fully paid ordinary shares (Shares) to seek listing on the Australian Securities Exchange (ASX).
The core team behind Cobold have been behind the growth of ASX listed Alligator Energy (ASX:AGE).
COBOLD TEAM PROFILE
Warren Edney – Chair
Warren has over 35 years’ experience in funds management and stockbroking. His primary focus is on the mining sector through the analysis of listed and unlisted Australian mining companies. He was one of the first commodity analysts in investment banking to cover uranium as commodity from a demand, supply and exploration perspective in 2006 while at ABN Amro and later at Royal Bank of Scotland.
Warren has a Bachelor of Applied Science (Geology) from RMIT, a Master of Science (Earth Sciences) from Monash University. He is a Member of the AusIMM and AIG and a graduate of the Australian Institute of the Company Directors company directors course.
Peter Mullens
Peter is a geologist and company director with 35 years’ experience across a wide range of commodities and countries.
He joined Laramide Resources (TSXV) as a Director and VP Exploration in 2002. In this role he was responsible for building Laramide’s Uranium portfolio including Westmoreland in Qld, which led to Laramide being voted the number 1 company on the TSX V in 2005.
Peter was also responsible for Aquiline’s acquisitions in Argentina prior to their buy out by Pan American Silver in 2009 for CAD $ 645 million.
Peter was a founder of Consolidated Uranium (CUR) and was responsible for Uranium project acquisitions in Australia and Argentina. He led CURs business and geological activities in Australia and Argentina until the merger with ISO Energy in Dec 20023.
Greg Duncan – CEO & Director
Greg is a geologist with a depth of experience in uranium exploration and project evaluation having been Exploration Manager for Australia, Laramide Resources, a founder of Alligator Energy and General Manager – Australia for Consolidated Uranium.
Greg has conducted access negotiations and led extensive exploration on ALRA land in Arnhem Land including western Arnhem Land for uranium and for lead & zinc in the central desert.
Greg holds a BSc in Geology and is a member of the AusIMM and SEG.
The proposed structure of the transaction
EMC Uranium Pty Ltd (EMC Uranium) is the legal and beneficial holder of:
- 100% of the shares in Amadeus NT Pty Ltd which holds the tenements and the tenement applications comprising the Amadeus Project
- 100% of the shares in Georgina NT Pty Ltd which holds the tenements and the tenement applications comprising the Georgina Project
- 100% of the shares in Mukinbudin Uranium Pty Ltd which has entered into an agreement with Crucible Resources Pty Ltd pursuant to which it will acquire the tenements comprising the Mukinbudin Project
Everest Metals Corporation Ltd (EMC) is the holder of 100% of the Shares in EMC Uranium.
The Term Sheet sets out the terms and conditions pursuant to which EMC, EMC Uranium and Cobold (the Parties) agree to transfer of 100% of the Shares in the capital of EMC Uranium (EMC Uranium Shares) from EMC to Cobold (Transaction) and the subsequent listing of Cobold on the ASX.
The material terms of the Term Sheet
- Cobold’s IPO shall seek to raise a minimum of $5,000,000 through the issue of 25,000,000 Cobold Shares at an issue price of $0.20 per Share.
- Subject to Completion, the Board of Directors of Cobold will be constituted by:
- Gregory Duncan;
- Peter Mullens;
- Keith McKnight;
- Simon Phillips
- Warren Edney.
- Cobold has entered into a mandate with Henslow Pty Ltd to provide ongoing services including assistance with completion of the seed capital raising and support for the IPO. The role and remuneration of the Broker reflects industry standard terms contained in a mandate agreement with Cobold.
- Everest intends to support the raising of pre-IPO seed capital to fund the corporate, technical and listing costs necessary for Cobold to list on the ASX. The estimated quantum of this financial support is $150,000 of the seed capital sought which EMC will place to existing EMC shareholders.
- Everest’s shareholders will be offered a priority allocation in the proposed IPO of up to $1,500,000.
- The parties agreed that all references to Cobold in the term sheet relate to Cobold Metals Ltd and any future names relating to the current Cobold entity.
The Condition Precedents
The Terms Sheet is subject to the following conditions precedent:
- Within 60 days of the execution of this term sheet Cobold successfully raising $500,000 in seed capital to fund costs of a successful IPO;
- Cobold receiving confirmation from ASX that its structure and operations are suitable for admission following lodgement of an in-principle advice application in accordance with ASX Listing Rule 1.1 condition 1;
- Cobold receiving valid subscriptions for at least $5,000,000 worth of Shares under the IPO;
- Cobold receiving conditional approval from ASX for admission to the official list and those conditions being to the reasonable satisfaction of Cobold and EMC; and
- all necessary third-party approvals and consents being obtained in relation to the transfer of the EMC Uranium Shares and or the Projects (including ministerial approval under the applicable mining legislation, if required) from EMC to Cobold,
- Admission of Cobold to the ASX for the acquisition of all licenses and interests relating to the Amadeus Acquisition Agreement, the Georgina Acquisition Agreement and the Mukinbudin Acquisition Agreement to complete,
- EMC providing written notice to Cobold that completion has taken place.
What consideration is EMC receiving?
As consideration for the Mukinbudin, Amadeus and Georgina assets EMC will receive:
- 13,000,000 ordinary shares in Cobold, representing an indicative 22.8% of the equity on issue post IPO (based upon the minimum subscription amount)
- $100,000 cash reimbursement for project expenditure to date
- If successfully listed, Cobold will assume the deferred consideration obligations relating to the Mukinbudin project
This transaction represents an excellent return for EMC and its shareholders on its Uranium projects and demonstrates management’s commitment to extracting value from every opportunity that presents along with management’s ability to execute.
[1] Fraser Institute, 2023, Annual Survey of Mining Companies.
[2] Northern Territory Budget 2023-24, Industry Outlook.
3 World Nuclear Association
[3] Statista, Uranium supply and demand worldwide forecast for 2035.
[4] ASX:MDX announcement; Exploration Update- Development of Uranium Interests, dated 25 January 2006
[5] ASX:MDX announcement; Exploration Update-Latest Scout Drilling Program shows values in excess of 0.02% Uranium, dated 20 July 2009
[6] ASX:MDX announcement; Very High Grade Uranium At Up To 0.63% U3O8 Encountered in WA Wheatbelt, dated 9 November 2010
[7] ASX:MDX announcement; Maiden Uranium Resource Proof Of Concept, dated 9 November 2011
[8] ASX: EMC announcement; Large Tenement Package Granted in Northern Territory, dated 16 August 2023
[9] ASX: EMC announcement; Extensive Uranium and Sedimentary Base Metal Targets Identified At Northern Territory Projects, dated 16 April 2024
