Canada’s M2 Cobalt has appointed a top deal maker of mergers and acquisitions as the company prepares for what could be an aggressive foray into Uganda’s cobalt industry, the company said in a statement to the media.
The company said the appointment of Mahendra Naik as an advisor to its board of directors “brings a wealth of expertise in helping to grow junior resource companies into world players.” According to his profile, Naik is a Chartered Professional Accountant and was one of the founding directors and key executives for IAMGOLD Corporation, a listed gold mining company with a market capitalization of $3 billion.
As chief financial officer for IAMGOLD, Naik is said to have put together US$550m in major debt and equity financings in the 1990s. He is said to understand Africa’s mining industry quite well. The appointment of Naik comes right after M2 Cobalt embarked on its exploration programme for cobalt in Bujagali in eastern Uganda and in Kilembe in the western after assembling teams at its mining sites.
Among other activities, M2 Cobalt also launched aerial drone surveys over its mining sites, with a high resolution magnetic and electromagnetic airborne survey planned for its Kilembe property. In a company statement, Dean Besserer, the technical advisor and manager of the exploration program, is quoted saying: “This is an exciting time for M2 Cobalt as the next phase of exploration commences.
Uganda is vastly under-explored, and the Company has designed a comprehensive exploration program within its very large land package… Some of our licenses are very close to, and are on trend with, the former producing Kilembe mine which was historically a significant producer of high-grade copper and cobalt.”
In January, M2 Cobalt Corp. completed the acquisition of seven exploration licenses that span 1,564 square kilometers for a cash consideration of $1.1 million and some shares. The money, on top of some shares in the company, was given to the earlier shareholders of the mining licenses, who are listed as 1126302 B.C. Ltd.
Five of these licenses are in the Bujagali property and stretch 1,371 square kilometers, while the other two are in Kilembe, totaling 193 square kilometers. In coming to Uganda, M2 Cobalt will try to achieve what Kasese Cobalt Company Limited failed to do – to turn cobalt resources into the lucrative mineral that it is.
Kasese Cobalt Company Limited collapsed after a drop in prices on the international market and the depletion of copper tailings from the neighbouring Kilembe Mines Limited. The increasing popularity of electric cars and electronics has turned around the fortunes of cobalt, with demand expected to jump 40 per cent in 2018.
Apple is now trying to skirt the bloody hotspots of DR Congo, one of the main producers of the mineral, to get the cobalt directly from certified miners. BWW and Volkswagen are said to be increasing their budgets for the purchase of cobalt. The Economist magazine recently reported that “each new electric vehicle uses about 10kg of cobalt.” A tonne of cobalt now goes for just over $85,000, up from $30,000 a decade back.
