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Canada Cobalt signs LOI to buy Ontario processing facility, stock up 11%

Bullion melting furnace. Credit: Polymet Labs Inc.

Canada Cobalt Works Inc. (TSXV: CCW) announced Friday that the company has signed a binding letter of intent to acquire PolyMet Resources Inc., owner of PolyMet Labs (ISO certified) — the only permitted and operating mineral and precious metal processing facility in northern Ontario’s silver-cobalt camp.

Canada Cobalt plans to move its headquarters to the lab and processing facility, which is adjacent to a rail line and a short distance from its Castle mine and Beaver property formerly operated by Agnico Eagle Mines.

PolyMet has demonstrated that in an eight-hour shift, it could pour up to 10 dore silver bars of 1,000 ounces each

The transaction provides Canada Cobalt with multiple immediate and long-term advantages, the company says, including a high-capacity bullion melting furnace to pour payable silver and gold dore bars. The 731 m2 facility would also host the company’s proprietary Re-2OX process for the extraction of cobalt, precious and base metals.

The company adds that the sampling and analytical facility can also provide commercial assaying, crushing, screening, grinding, bulk sampling, upgrading and smelting services, driving multiple revenue streams at a time when gold prices in Canadian dollars have hit new record highs.

PolyMet has demonstrated that in an eight-hour shift, it could pour up to 10 dore silver bars of 1,000 ounces each.

PolyMet is also making inroads into e-waste business, which Canada Cobalt believes can be leveraged through its Re-2OX process. The companies are processing material from mixed computer boards through the facility’s shredder and ball mill to recover precious and base metals.

PolyMet, based in the town of Cobalt, was formed in the fall of 1998 as an exploration company. Credit: Polymet Labs Inc.

“This deal builds dramatically on Canada Cobalt’s current competitive advantages and opportunities — technological, on the ground and underground — in a rejuvenated silver/cobalt district recognized as the birthplace of Canadian hard rock mining,” Canada Cobalt president and CEO Frank Basa said in Friday’s press release.

Under the terms of the transaction, Canada Cobalt will acquire PolyMet and all its assets for total consideration of C$650,000 in cash and shares.

Friday’s announcement propelled Canada Cobalt’s stock up by nearly 11%, almost a six-month high. The BC-based mining firm has a market capitalization of C$29.7 million.