A-Cap Resources Limited (ASX:ACB) has entered into an agreement to acquire a nickel-cobalt project in Queensland, Australia.
The project represents a strategic opportunity for A-Cap to diversify its mineral portfolio into cathode materials production and supply to the battery industry.
Meanwhile, A- Cap will continue to focus on its flagship Letlhakane Uranium Project in Botswana, aiming to supply uranium products for nuclear facilities and to the battery industry markets.
Increased focus on battery markets
A-Cap chairman Shen Angang said: “The option to purchase ML 80098 is part of A-Cap’s intention to extend its clean energy related strategy from uranium focussed to include minerals related to energy storage materials.
“As nickel and cobalt are integral to battery cathode production, this agreement marks the beginning of a targeted resource approach for A-Cap.”
Cobalt is a key battery metal
Cobalt is a key ingredient in new-age batteries used for electric vehicles and energy storage, and prices have surged.
Carmakers from Tesla (NASDAQ:TSLA) to Volkswagen (ETR:VOW) are looking to secure long-term supplies of cobalt for use in their rechargeable batteries.
The LME (London Metal Exchange) cobalt price is about US$95,000 a tonne, or about 200% higher compared to January 2017.
Nickel-cobalt project in Queensland
The project was extensively drilled by BHP-INCO in the late 1960’s, and again in the late 1990’s by Preston Nickel. Queensland Pacific Nickel also worked in the area again in the early 2000’s.
This historical work was aimed at defining an economic nickel- cobalt resource hosted in laterite.
Throughout the past exploration programs, the various companies have conducted extensive metallurgical and other technical studies to define an economic nickel resource.
A-Cap’s objective is to revisit the past exploration work and conduct additional drilling and metallurgy with the focus on cobalt mineralisation.