A new, well-cashed-up cobalt venture in Canada got off to a rocky start.
First Cobalt Corp. said March 16 that it acquired an option over a cobalt project in Ontario owned by Canadian Silver Hunter Inc.
But just hours after First Cobalt's announcement, Canadian Silver Hunter cast doubt on the deal between First Cobalt and private company Cobalt Projects International that had earlier this year optioned the South Lorrain cobalt project from Canadian Silver Hunter.
Canadian Silver Hunter said it "refutes" the First Cobalt acquisition announcement, it has no relationship with First Cobalt and it intended to "vigorously protect its interests."
Then events quickly took another twist.
A day later, Canadian Silver Hunter reversed course, saying it now accepted the deal between First Cobalt and Cobalt Projects International, a private Ontario-based company that according to a records search lists "John (Jack) Kenneth Purdy" as its only director.
"Well something," Canadian Silver Hunter President and CEO Jeffrey Hunter said over the phone March 17. "It's an internal matter."
Hunter declined to go into detail, but in answering repeated questions about the issue, he said it involved how the company was treated.
"It's not for public consumption," he said. "You've got the press releases."
Trent Mell, president and CEO of First Cobalt and former head of mining at PearTree Securities, was more forthcoming in a March 17 phone interview.
Mell said there was no animosity with Hunter. But in announcing the deal, he said First Cobalt may have "caught him flat footed." Mell noted that for Canadian Silver Hunter the project is "an important family asset."
Mell said he had met with Hunter at the recent Prospectors and Developers Association of Canada convention in Toronto to talk about the project. But there may have been a misunderstanding "on the formalities we had to go through," he said.
First Cobalt is a newly reorganized entrant among juniors pursuing cobalt, which has regained luster as its price surges. Cobalt, which is mainly produced as a byproduct from base metal mining operations, is used in various applications including batteries.
Mell brings a strong financial background to the company, which recently doubled the size of a financing to raise C$6 million.
To secure the option on Canadian Silver Hunter's asset, First Cobalt did a deal with Cobalt Projects International that essentially transfers the option agreement to it. They bought the private company out, Mell said, and Purdy, the director listed there, is no longer involved.
Now Mell, about two weeks on the job, is "slowly populating the team," he said.