COBALT BLUE HOLDINGS

INTRODUCTION

Two Shields Investments has acquired a 25% stake in Cobalt Blue Holdings (‘CBH’), a group which is developing a portfolio of cobalt assets across West Africa. TSI has a call option with CBH to increase its stake to 49% if a conditional call option is exercised within 6 months for cash of £800,000 to be utilised to fund prospecting and exploration costs of CBH. CBH has applications for six exploration licences covering 2,837 sq. km in Cameroon which are highly prospective for cobalt and nickel development. 

Of the licences, five adjoin the Nkamouna and Mada Cobalt-Nickel Project while the sixth is in the Mvina division in the north of the country.

HIGHLIGHTS

  • 25% stake (increasing to 49% if call option is exercised within 6 months and £800,000 invested by TSI to fund prospecting and exploration costs) in Cobalt Blue Holdings (‘CBH’), a group which is developing a portfolio of cobalt assets across West Africa
  • Six exploration licences covering 2,837 sq. km in Cameroon
  • Five licences adjoin the Nkamouna and Mada Cobalt-Nickel Project, one of the world’s largest known primary cobalt deposits
  • Previous studies indicated 59.8 million tonnes (Mt) grading an average of 0.24% cobalt, 0.68% nickel and 1.37% manganese
  • Exploration plan being developed by CBH to initiate once licences granted

The Investment Opportunity

The investment in CBH provides the Company with what the directors believe to be an exceptional portfolio in a primary cobalt nickel region.   The Nkamouna and Mada cobalt-nickel project, which is surrounded by CBH licences, forms one of the world’s largest known primary cobalt deposits, with significant nickel and manganese credits.  Independent studies have consistently concluded that the Nkamouna project can be developed with globally competitive capex, opex and investment returns.  The deposits have been audited by SRK at 59.8 million tonnes (Mt) grading an average of 0.24% cobalt, 0.68% nickel and 1.37% manganese classified as Measured Mineral Resources with an additional 60.8 Mt grading an average of 0.22% cobalt, 0.62% nickel and 1.32% manganese classified as Indicated Mineral Resources.  Previous studies in 2009 have forecast that some 105,000 tonnes  of cobalt, 75,000 tonnes of nickel, and 535,000 tonnes of manganese would be produced from a commercial operation.  At that time the Project had an after-tax Project net present value (“NPV”) of $669.6 million at an 8% discount rate, assuming average three-year trailing prices (in accordance with SEC guidelines) of $26.20 per pound for cobalt and $8.71 per pound for nickel; and $0.54 for manganese, an after-tax internal rate of return (“IRR”) of 22% based on 100% equity and a total free cash flow (before debt service) of $2.14 billion over the Project life.  The price of cobalt, due to the metal’s high demand for use in electric vehicle batteries in particular has soared, underpinning the huge potential for commercial asset development and the need for discoveries.

The Exploration Licences

The six exploration licences applied for are Ngoila Nord, Ngoila Est, Ekok, N'Tam Est, N'Dja and Ngaoundéré.  These exclusive exploration licences, once granted, will be issued for an initial period of three years and may be renewed up to three times, for a maximum period of two years each.
Ngoila Nord, Ekok, Ngoila Est, Ntam Est and Dja are in the Haut-Nyong, Haut-Nyong & Boumba-et-Ngoko, Haut-Nyong, Boumba-et-Ngoko and Haut Nyong & Dja-et-Lombo divisions respectively. The Nkamouna and Mada deposits are in the Haut-Nyong division.

A development programme is now being planned which will look to confirm the prospectivity of the portfolio and confirm the Directors’ view that the portfolio represents a fantastic opportunity to gain exposure to a premium cobalt region outside of the Democratic Republic of Congo, which currently produces over half of all global supply.  

Registered Company Address:
Two Shields Investments Plc
Hyde Park House
5 Manfred Road
London
SW15 2RS

LON:TSI

Registered Number: 2956279
(Registered in England and Wales)

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