Comet Resources to enhance portfolio by acquiring prospective copper-gold and base metals assets in NT

Comet Resources Limited (ASX:CRL) has entered into a Binding Option Agreement with Bath Resources Pty Ltd to acquire a portfolio of highly prospective copper-gold-zinc-silver-lead assets in the Northern Territory. The assets include the Oonagalabi Copper-Zinc Project, Paradise Well Copper-Gold Prospect and the Silver Valley Copper-Gold-Silver-Lead Prospect, which combined cover around 840 square kilometres. Comet is developing a portfolio of base/precious metal projects, with this potential acquisition complementing and building on the recent acquisition of the high-grade Santa Teresa Gold Project in Mexico and the acquisition of the Barraba Copper Project in northern NSW, Australia. Shares have been as much as 18% higher intra-day to 2.8 cents, approaching the new two-year high of 3.3 cents set last month. “Complements Barraba Project”  Comet managing director Matthew O’Kane said: “This portfolio combines both advanced and early-stage copper, gold and base metals targets.  “Being located in Australia they complement our existing copper and base metals project at Barraba in NSW, and provide Comet increased exposure to copper upside, which we believe will continue to strengthen as a result of increased global infrastructure spending and the transition to clean energy.  “With our recent placement, we are funded to explore all our existing projects as well as this latest exciting acquisition.”  Exploration potential Although historical exploration results were indicative of near-surface gold and copper mineralisation, very limited modern exploration has occurred.  Comet plans to utilise modern exploration techniques to rapidly advance the scale of known mineralisation, especially where known geophysical and geochemical anomalies exist that have not been comprehensively drill tested.  The mineralised Oonagalabi Formation represents a very similar geological setting as other known copper deposits in the region, including KGL Resources Ltd’s (ASX:KGL) (FRA:KN6) Jervois Copper Project, which is host to a 20.97 million tonnes JORC resource at 2.03% copper and 31.9 g/t silver, for 426,200 tonnes of contained copper and 21.4 million ounces of silver. Best intersections from historical drilling include:  36.6 metres at 1.0% copper and 1.7% zinc from 1.5 metres; 5 metres at 1.26% copper and 1.22% zinc from 70 metres; 6 metres at 0.9% copper from 102 metres; and  14 metres at 0.7% copper from 148 metres. At Paradise Well, two prospects have been identified on the tenement through historical rock chip sampling programs which returned up to 8.9% copper and 2.2g/t gold. Neither prospect has been subject to ground geophysics or drill testing and presents an opportunity for Comet to follow up historical work with a systematic program geophysics to identify drill targets. At Silver Valley, key prospects include the Chablo Prospect which is prospective for lead, silver, copper and gold. Rock chip samples returned 554 g/t silver, 20% lead, 11.9% copper and 2 g/t gold - providing exciting earlier stage exploration potential. Project locations within the Northern Territory.  Copper demand set to increase Copper is set to see an increase in demand due to the global efforts to reduce emissions from the transport network and from the generation of renewable electricity which, when combined with the recent lack of development of major new projects, will likely see the supply demand imbalance increase.  The metal is not only an important part of the batteries used in battery electric vehicles (BEV) but is also used extensively in the electric motors that drive the wheels of BEVs.  UBS estimate that a BEV will require on average 95 kilograms of copper, versus traditional internal combustion engine (ICE) vehicles, which only need around 25 kilograms of copper, an increase of 70 kilograms per vehicle.  Copper is also used intensively in the generation of electricity from renewables, such as solar and wind.  There is also likely to be a strong demand impact for copper resulting from post-COVID-19 fiscal spending initiatives by governments, such as the recently approved US COVID-19 relief bill of US$1.9 trillion. Key acquisition terms  The agreement allows for the acquisition of 100% of the portfolio of tenements from Bath, with key terms including: (Exclusivity fee): The company will pay Bath a non-refundable deposit of $50,000 to secure an exclusive right to acquire the sale shares for 45 days or the time required to get ASX approval (if required) to acquire the sale shares; (Completion fee): The company will pay Bath $50,000 upon completion of the agreement; (Initial consideration): The company will issue to Bath fully paid ordinary shares in the capital of the company to the value of $450,000 based on an amount per share equal to the greater of $0.025 or the 20-Day VWAP, upon completion of the agreement (initial consideration shares);  (Secondary consideration): The company will issue CRL shares to Bath to the value of $200,000, based on an amount per share of the 20-day VWAP of CRL shares as traded on ASX payable to Bath 12 months after the completion of the agreement; and  (Final consideration): The company will issue CRL shares to Bath to the value of $200,000 on the delineation of the maiden JORC resource of no less than 5 million tonnes at a copper-equivalent of 1% or greater and based on an amount per share determined by the 20-day VWAP of CRL shares as traded on ASX at the time the resource is announced to ASX.