Cazaly Resources Ltd's (ASX:CAZ) intention to purchase a copper-cobalt prospect in Namibia sparked a 76% surge in shares on Tuesday.
The price rocketed to $0.76 before midday after the company announced it had acquired an option to purchase an 85% interest in the Tsumkwe project.
At close the shares were $0.055.
Tsumkwe comprises an exploration licence and covers an area of circa 200 square kilometres.
It was granted to Namibian company Gemco Investments cc in August 2017 for an initial 3-year period.
Four-month option to purchase
Cazaly has secured a four-month option with Gemco to purchase the interest.
The project is in the country’s northeast, circa 750 kilometres by road from the capital Windhoek and 40 kilometres from the border with Botswana.
The region has largely been explored for diamonds in the past with limited exploration for base metals.
Due diligence work
As part of due diligence into the project, Cazaly will drill a hole in an attempt to verify an historical extensive cobalt and gallium intersection.
The company has started engaging local technical and legal consultants to assist in its due diligence work.
If Cazaly decides to complete the acquisition, other drilling will be conducted, including at the extensive Makuri Vlei copper-cobalt soil anomaly.
READ: Cazaly Resources’ shares surge on sampling high-grade cobalt at Bungonia
The company recently intersected high-grade cobalt from the first pass reconnaissance mapping and rock chip sampling at its Bungonia Cobalt Project in New South Wales.
The project covers circa 242 square kilometres and is 130 kilometres northeast of Canberra.