The project joins the firm's advanced graphite and vanadium assets in Madagascar.
Graphite and cobalt, along with lithium and nickel are regarded as the four 'pillars' of battery technology.
Before NextSource focused on exploration in Madagascar in late 2007, it worked at the Sagar property in early 2007 and identified Iron-Oxide-Copper-Gold (IOCG) mineralisation and unintentionally discovered significant showings of cobalt
As gold and copper were the priority, cobalt was never specifically targeted, nor was it included in the NI 43-101 technical study, the company noted.
The company said it recently reviewed drill core, grab samples and XRF results, and discovered that the property had the potential to host significant mineralisation of cobalt, which appears to be ubiquitous.
"Several international parties have recently approached NextSource and expressed strong interest in the Sagar property based exclusively on its cobalt. Non-disclosure agreements have been executed and due diligence has been initiated with each," the company said in Tuesday’s regulatory filing.
NextSource said that its Molo graphite project in Madagascar remained the priority, and over coming weeks, it will evaluate various options available to the company to "determine the best option to potentially monetise this opportunity for its shareholders".
Shares were unchanged in Toronto at C$0.115.