M2 Cobalt (MC.V) has entered into a definitive agreement to acquire an additional 4 exploration licenses in Uganda, comprising of a total land package of 850 square kilometers that’s either contiguous with or close to the existing Kilembe and Bujagali exploration licenses. The total price tag is US$550,000 in cash as well as the requirement to issue 800,000 shares to the vendor, a Uganda-based company.
Three of the licenses will be part of the company’s Kilembe area, and triples the total size of the Kilembe land package to in excess of 700 square kilometers. This will strengthen the company’s land position in the district, as five licenses will now be on trend with and/or close to the past-producing Kilembe mine where Falconbridge mined rock with an average grade of 2% copper and 0.17% cobalt. Two of the recently acquired licenses are located in the same Rwenzori belt which also hosts the Kilembe mine, while the final license is located approximately 50 kilometers east of the mine, and has known gold and copper mineralization.
The 335 square kilometer license that has now been added to the Bujagali property appears to have the same features as the rocks hosting the five large cobalt anomalies, and M2 Cobalt thinks the region is prospective for a Katanga-style sedimentary hosted copper-cobalt system.
Increasing the size of the projects is a positive development as it shows the company’s confidence in its exploration theory, but the market is really waiting for the company to drill-test the currently known anomalies. M2 Cobalt has now signed a drill contract to complete up to 3,000 meters of diamond drilling (with the option to expand the drill program should the first results be positive). Don’t expect too much from this first drill program, as it mainly consists of scout drilling on the three types of mineralization it encountered during its Phase 1 exploration activities (VMS, Katanga-style sediment hosted and ultramafic Ni-Cu-Co mineralization). This initial 3,000 meters will help the company to design a follow-up drill program and will prioritize the exploration targets.