Corazon Mining Ltd (ASX:CZN) has boosted its cash reserves by undertaking a placement to raise circa $1.8 million at $0.014, which is a 16.7% premium to the last closing price.
The placement includes a strategic investment of $1.68 million by Hanking Australia Investments Pty Ltd, a specialist resources investment vehicle.
Hanking will now hold an 11.55% stake in Corazon.
The new funds will be allocated to accelerate exploration at the high-grade Cobalt Ridge prospect in New South Wales, which is part of the Mt Gilmore Project.
Cobalt Ridge is an advanced, drill defined, high-grade, cobalt dominant sulphide deposit.
Corazon’s work will include drilling and detailed metallurgical test work with a focus on producing battery-grade cobalt for use in the emerging rechargeable battery sector.
A drill rig is already on-site preparing to commence.
Details of the deal
Hanking will become a substantial shareholder of Corazon and its nominee, managing director Dr Mark Yumin Qiu, will join the Corazon board.
Hanking is the Australian investment arm of China Hanking Holding (HKG:3788).
The deal provides committed support for Corazon allowing for the advancement of projects, and also for the potential of future funding and off-take opportunities.
Hanking rationale for Corazon investment
Hanking considers that the new energy market is growing rapidly and that cobalt and nickel are critical components for high-quality and high-energy density batteries.
China currently imports over 90% of the cobalt concentrates for its cobalt refinery industry.
Importantly, it considers Corazon’s high-grade cobalt sulfide project as potentially beneficial.
While Hanking already owns one of the world’s largest laterite nickel resources in Indonesia, the investment in Corazon marks a strategic step in securing scarce high-grade cobalt resources in the ever-growing energy storage focused world.