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Blackstone Minerals observes cobalt and gold at first new discovery in region of Canada since 1930s

The Erebor discovery indicates that the Little Gem project in British Columbia may host multiple deposits.
Samples from the Erebor prospect at Little Gem
Surface rock samples from Erebor with visible gold and oxidised cobalt

Blackstone Minerals Ltd (ASX:BSX) has made the first discovery of cobalt and gold in the region of the Little Gem project in Canada since the 1930s when prospectors discovered similar mineralisation.

The Erebor discovery adds weight to the belief that Little Gem hosts multiple deposits similar to the Bou-Azzer primary cobalt district in Morocco, which has more than 50 deposits and 75 years of cobalt production.

READ: Blackstone Minerals focused on battery metals of nickel and cobalt as well as gold

At Erebor, which is 900 metres along an interpreted ultramafic trend southwest of the historical Little Gem mine adits, visible gold and oxidised cobalt (erythrite) was observed in rock chip samples.

Managing director Scott Williamson said: “This is a significant breakthrough for Blackstone and the high-grade Little Gem project and opens up the potential for multiple targets similar to the Bou-Azzer cobalt district in Morocco.”

Shares are up 8.7% to 12.5 cents.

 

Little Gem was discovered in the 1930s by prospectors identifying a pink cobalt-bloom on weathered mineralisation (erythrite) that led to three adits being developed.

Blackstone is awaiting results from an extensive induced polarisation (IP) survey testing the more than 1.8-kilometre strike target zone at Little Gem and nearby Jewel prospect.

Detailed soil sampling

The company is also nearing completion of a detailed soil sampling program over multiple prospects adjacent to Little Gem.

This work includes regional reconnaissance sampling targeting 335 square kilometres of tenure prospective for primary cobalt mineralisation.

Blackstone has taken more than 700 regional soil, rock chip and stream sediment samples throughout the tenure.

Williamson said: “We eagerly await results from the IP survey and the ongoing extensive regional sampling and prospecting to define further targets throughout the region.”

The results will enable the company to better understand the full potential of the British Columbia project to host further cobalt-gold mineralisation.

This would appeal to cobalt end-users looking for a long-term supply of the key ingredient in the cathode chemistry of the lithium-ion battery.

Strong drilling results

Blackstone has completed the initial six diamond drill holes at Little Gem and has assay results pending for the remaining five diamond drill holes from the maiden drilling program.

The alteration halo is significantly larger than previously estimated and 2018 drilling to date has consistently intersected a broad alteration zone, highlighting potential for a major hydrothermal system.

Best results from the first six drill holes are: 1.1 metres at 3.0% cobalt and 44 g/t gold within 4.3 metres at 1.0% cobalt and 15 g/t gold; and 1.0 metre at 1.2% cobalt and 5 g/t gold within 3.2 metres at 0.8% cobalt and 4 g/t gold.

There has been little modern-day exploration at Little Gem with the main activities being airborne geophysical surveys in the 1970s and two drill holes completed in 1986.

Additional prospects identified

The second mineral occurrence at the project is the Jewel gold prospect which supported some gold production from 1938 to 1940 and is only 1.1 kilometres from the Little Gem mine.

Since Blackstone began working on the project it has verified mineralisation identified historically at Little Gem and Jewel prospects and discovered the Roxey high-grade gold-copper prospect.

Roxey, which is 1.5 kilometres from Little Gem prospect, was visually identified during Blackstone’s due diligence site visit.

Strong cobalt demand story

Cobalt contributes up to 60% of the value of lithium-ion batteries which in turn accounts for more than 50% of demand for cobalt.

The lithium-ion battery is projected to become the world’s most significant source of power with the use in electric vehicles (EVs) being the key driver.

Only 1% of global vehicle sales are EVs but Bloomberg forecasts 55% of vehicles sold by 2040 will be electric and cobalt demand is expected to rise at 5% compound annual growth rate over the next four years.

Cobalt’s other main use at 20% is in superalloys which compliments the battery demand as high-tech industry grows.

Growth in supply

The company believes there is a supply issue in the cobalt market with more than 60% of global supply sourced from the Democratic Republic of Congo (DRC).

Growth in supply will also come from the central African country with several large companies such as Glencore, Randgold and China Molybdenum operating and developing projects there.

Williamson said: “A lot of battery manufacturers are focused on sourcing conflict-free, ethical cobalt and are not interested in the DRC broadly as a jurisdiction they would like to access for their supply.”

Blackstone, which listed on the ASX in January 2017 after raising $3.5 million in its initial public offering under a tight capital structure, stands out from its peers, particularly in terms of cobalt grades.

Peers in a similar range of market capitalisation generally have cobalt grades around or under 1%.

Exploring for nickel-gold in Western Australia

Blackstone’s primary focus was exploring gold and nickel assets in Western Australia before it acquired the Little Gem project.

The WA work is continuing and the company is drilling for gold and nickel sulphides at its Silver Swan South project in the Goldfields region.

READ: Blackstone Minerals gains $1 million from divesting Red Gate project to pre-IPO explorer

Second phase aircore drilling at the Black Eagle prospect at Silver Swan South in March intersected gold mineralisation and extensive basement geochemical anomalism.

Results included 10 metres at 3.2 g/t gold from 68 metres within 15 metres at 2.2 g/t from 64 metres.

This emerging discovery is 8 kilometres along strike from the plus-5 million ounce Kanowna Belle Gold Mine of Northern Star Resources Ltd (ASX:NST).

Silver Swan South is also along trend to the south of the Silver Swan nickel deposit, which has produced 166,000 tonnes of nickel.

The project area contains komatiite units similar in age and geochemistry to the Silver Swan host.

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