The Daily Examiner, 29 September 2017, p.1:
JUST 35km north-west of Grafton is a block of private land with the potential to change the face of Clarence Valley’s industry as we know it.
Mt Gilmore, which lies between Fine Flower and The Gorge, has been revealed to be home to several deposits of high-grade cobalt.
Now Western Australia-based company Corazon Mining is trying to work out just how big that deposit is, and whether it’s worth mining.
On June 16 2016, Corazon announced it had secured the right to earn up to 80% of the Mount Gilmore Cobalt-Copper-Gold Project from private company Providence Gold and Minerals Pty Ltd.
Their project tenure included one granted Exploration Licence covering an area of approximately 25km by 15km, and over the past couple of months they have been drilling to in an effort to find precious metals.
Corazon managing director Brett Smith said so far, things were looking good.
“We’ve been saying that this is one of the highest- grade cobalt deposits in Australia, we just don’t know how big it is,” he said. “There was a lot of gold and copper prospecting there back in the late 1800s, early 1900s, and so it’s amazing where it’s located how little modern exploration has gone on there.”
The reason they have their eye on cobalt, rather than gold or copper, is that the element’s value has risen exponentially in recent years due to its use in lithium-ion batteries.
Mr Smith said demand from the battery sector had tripled in the past five years and was projected to double again by 2020.
It is most commonly used in smartphones, laptops, and electric vehicles.
“Cobalt is the most expensive raw material used for building lithium-ion batteries, paying about $61,000 per tonne,” Mr Smith said.
“A lot of people have been exploring for cobalt in NSW but are looking at oxide deposits. Ours is a bit different in that it’s a sulphide deposit, and they are fairly rare to be cobalt dominant.
“It’s all in vogue at the moment so we’re pretty hopeful this can be used to produce cobalt salts for batteries.”
Mr Smith said the company was currently on its second drill program, which they hoped could be used to accurately determine the lay of the land.’
Exactly what mining exploration licence is this newspaper article talking about?
Well according to NSW Planning & Environment on 1 September 2017 it is EL8379 granted to Mt Gilmore Resources Pty Ltd on 23 June 2015.
So who is Corazon Mining Limited?
The company’s 2016-17 Annual Report states:
Corazon Mining Limited (ASX: CZN) (“the Company” or “Corazon”) is an Australian based company exploring and developing the Lynn Lake Nickel-Copper-Sulphide project in Canada and Mt Gilmore Cobalt-Copper-Gold project in Australia.
It has three main exploration projects - the Lynn Lake and Victory projects both in Manitoba Canada and the Mt Gilmore Project in NSW Australia.
This is the corporations current Board of Directors:
Clive Jones, Non-Executive Chairman - 4,235,330 fully paid ordinary shares, 5,000,000 options exercisable at $0.035 expiring 31 March 2020, total annual remuneration $154,607
Brett Smith, Executive Managing Director - 7,107,131 fully paid ordinary shares, 10,000,000 options exercisable at $0.035 expiring 31 March 2020, total annual remuneration $417,250
Adrian Byass, Non-Executive Director - 9,357,370 fully paid ordinary shares, 7,000,000 options exercisable at $0.035 expiring 31 March 2020, total annual remuneration $144,600
Jonathan Downes, Non-Executive Director - 11,154,512 fully paid Ordinary Shares, 5,000,000 options exercisable at $0.035 expiring 31 March 2020, total annual remuneration $190,557
Mark Qiu, Non-Executive Director (appointed 18 August 2017) - 1,269,300 fully paid ordinary shares, total annual remuneration unknown
Robert Orr is company secretary and Chief Financial Officer, shareholding unknown, total annual remuneration $114,360.
The last annual report indicated that the company share structure comprised 1,039,283,317 fully paid ordinary shares held by 2,135 individual shareholders and, 60,000,000 unquoted options are held by 10 individual option holders.
The largest options holders are Brett Smith with 10 million held and Zenix Nominees Pty Ltd with 20 million held.
On 1 December 2016 the Company announced the issue of 3,410,840 shares to key management personnel in lieu of cash-based salary. This strategy was implemented in order to conserve cash reserves for operational expenditure.
Corazon Mining appears to be operating at a loss and apparently paid no tax in 2016-17.
Corazon Mining Limited’s Purchase Agreement for the Mt Gilmore Cobalt-Copper-Gold joint venture project:
Under the terms of the agreement with Providence and subject to Corazon completing due diligence to its sole satisfaction on or before 30 June 2016, Corazon has the exclusive right to earn up to an 80% interest in the Project as follows:
Corazon can earn an initial 51% interest by:
* Issuing Providence 25 million Corazon Mining Limited shares
* Paying cash reimbursements of costs totalling $100,000
* Spending $200,000 on exploration within the first 12 months from the date of satisfaction of all conditions precedent (“Commencement Date).
Corazon can earn a further 29% interest (totalling 80%) by:
* Completing $2M in exploration within 3 years of the Commencement Date
* Paying $150,000 in cash or shares upon the earlier of the commencement of the third year and Corazon spending a minimum of $500,000 on exploration
* Paying $250,000 in cash or shares upon earning 80% equity in the Project.
Corazon has the opportunity to extend this earn-in period by one year by paying $50,000 in cash or shares.
According to Corazon Mining;
The Project is located only 35km from the major centre of Grafton in north-eastern New South Wales. Project tenure includes one granted Exploration Licence (EL8379 – one year old), covering an area of approximately 25km by 15km……
On 22 August 2017 the Company issued 139,856,665 fully paid ordinary shares at an issue price of $0.014. The share issue was comprised of:
- an issue of 120,000,000 shares to Hanking Australia Investments Pty Ltd under a Subscription Agreement for a $1,680,000 investment in the Company;
- an issue of 7,356,665 to sophisticated investors to raise $102,993; and
- an issue of 12,500,000 shares to Providence Gold and Minerals Pty Ltd pursuant to the Company’s Earn-in Agreement with Providence in respect of the Mt Gilmore Project. Under this Agreement, Corazon has the exclusive right to earn up to an 80% interest in the Project. The shares have a total valuation of $175,000.
On the same date, the Company also issued 85,000,000 options to Hanking Australia Investments Pty Ltd following their investment in the Company. The options were issued with an exercise price of $0.03 and an expiry of 22 August 2019.
On 18 August 2017, Dr Mark Qiu of Hanking Australia Investments Pty Ltd was appointed to the Company’s Board of Directors.
China Hanking Holdings Limited, registered in the Cayman Islands and listed on the Hong Kong Stock Exchange, is the parent company of Hanking Australia Investments Pty Ltd.
The second largest shareholder in Corazon Mining Limited is Crescent Nominees Limited, a private equity firm registered in Northern Ireland since 2014 and owned by venture capitalist Crescent Capital NI Limited.
As part of NSW Minerals Week Corazon Mining Limited had a booth at the 14th Sydney Resources Round-Up in May 2017 where interested geologists could view their sulphide core from the 2016 Cobalt Ridge drilling program.
Area in which the proposed cobalt mine would be situated
Satellite image of Mount Gilmore (height 372m) situated just above the Clarence River system at The Gorge
It doesn’t take a genius to look at this image and see the potential for heavy rain episodes over Mt. Gilmore leading to surface water runoff into Clarence River tributaries.
So the first question is; what happens if Corozon Mining was granted a mining licence by the NSW Berejiklian Coalition Government and one or more of its heavy metal contaminated holding ponds were breached during such a rain period? The potential exists for any such breaches to result in long-term contamination of surrounding soils and water courses, as well as higher sediment levels in surface waters.
Heavy metal and metalloid concentrations within stream-estuary sediments already occur naturally in NSW north-eastern coastal rivers and current Clarence River levels are also the result of historic mining in the upper catchment below the Dorrigo Plateau region.
This leads to a second question. Can a river system, which supplies drinking water to est.126,008 residents (Census 2016) along with water to farmers, graziers and commercial fishers in the Clarence Valley and Coffs Harbour City local government areas, safely tolerate higher heavy metal and metalloid concentrations in that water? Communities relying on the Clarence river system might not be happy with the thought of any increase in localised or overall toxicity.
Given that mining is a thirsty business and water used in its extractive processes has to come from nearby surface/groundwater sources, there is a third question which immediately springs to mind. In the face of increasing impacts from climate change can we afford to have the environmental water flow in the Clarence River system compromised further?
Then there is the question of required associated infrastructure, including transport of ore via trucks and rail – need I say more?
One has to wonder when Clarence Valley Council was going to mention this proposed mining activity to residents and ratepayers because it is highly likely that this mining company or someone acting on its behalf has approached either the Mayor or council administration.
UPDATE
NSW Planning & Environment mapping of EL8379
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