Indeed, Mitchell Smith, the company’s chief executive, argues that the origins of the company date back at least a decade.
“The company’s management has been focussed on cobalt for ten years,” he says.
“We saw cobalt as a niche market with some serious supply constraints. The main production is as a by-product and the majority of it comes from the Democratic Republic of Congo. We saw the demand coming, brought on by portable electronic devices, and we saw that ten years ago, even before the advent of electric vehicles.”
So, a good call ten years ago led on to the creation of Global Energy Metals as a vehicle with which to capitalise on the rising demand for cobalt.
“We’ve established ourselves as a well-respected group that has a deep understanding of the market,” says Smith.
And the company has been able to use this market expertise to secure two useful-looking projects, one in Ontario, Canada, and one in Queensland, Australia.
For now, it’s likely to be the Millennium project in Queensland which grabs the attention. This is the newer of the company’s projects, and is held in joint venture with a local Australian partner called Hammer Metals (ASX:HMX). Hammer is also working with mining giant Glencore in Mount Isa focusing on high-grade copper-gold targets-and has been pleased to be able to call on Global Energy to advance Millennium. The current JORC resource at Millennium shows a useful 0.14% of cobalt, which is well above the average of other similar projects, in its established 3.1mln tonnes of ore.
“Millennium is a cobalt-copper sulphide project in the Mount Isa mining district in Queensland,” says Smith.
“There’s fantastic infrastructure in place, a very strong workforce, a mining heritage, and with our partner Hammer Metals an extremely strong technical team with experience of the region.”
Global Energy Metals is currently completing a first phase of work on Millennium, consisting of ten drill holes for approximately 1,000 metres.
“The idea,” says Smith, “is to confirm that the mineralisation in the known resource is consistent. The work has also allowed us to earn our first 25% interest, the first step towards acquiring up to 75%. The plan is to move forward and carry out exploration drilling to expand on the known resource area.”
At the moment, the resource calculations are to the Australian reporting standards, but in time Canadian NI-43-101 numbers will be available too.
“We’re looking at a nine-to-twelve month horizon to be able to have a new resource out to 43-101 standards,” says Smith.
“There is a strong likelihood we can significantly increase it and that we can bring this to a double digit million tonne resource. That’s based on the consistency of the mineralisation if we can continue it for 1.5 kilometres to the northern zone.”
Progress on that should generate significant enough newsflow to stimulate interest in the market, especially since the more viable the project looks, the more likely it is that the company’s Chinese partner, Beijing Easpring, will provide financial assistance for development.
The arrangement with Beijing Easpring is broader than just one project, though. It’s been central to the company’s growth from the start.
“Ten years in cobalt has given us the ability to look downstream and see what cobalt’s for and who’s using it,” says Smith.
“With Easpring we have an agreement for the identification and acquisition of cobalt projects once they reach the feasibility level. They’ve been mandated corporately and by the state to seek out new cobalt opportunities.”
It’s a slightly unusual arrangement, but instead of identifying projects and then looking for a partner, Global Energy Metals has identified its partner and is now able to ensure that any projects it takes on measures up to its partner’s expectations.
That in turn diminishes the financing risk, and means that the further the exploration and development work progresses, the closer to production the project gets. The exact nature of any funding package remains, of course, a matter for negotiation. But it’s a useful tick in the box for a company that’s still at a relatively early stage.
Meanwhile, at Werner Lake, Marquee Resources (ASX:MQR) is providing the funding for a C$2.5mln programme that will include infill drilling as well as resource expansion. That work will only add to the flow of positive news that’s likely to come from Global Energy Metals over the course of the summer, and which could very likely lead to a re-rating.