Two Cobalt players partner on processing.

• Position: MINING

Two cobalt exploration companies have entered into an agreement to establish a joint venture involving a controversial refinery in northeastern Ontario.

First Cobalt announced June 1 that it has entered into an option agreement to form a 50/50 joint venture partnership with Cobalt One, the pending new owner of the rukon refinery in North Cobalt.

In a news release, First Cobalt said their "strategic partnership" with Cobalt One will give them access to the refinery and 40 acres of permitted land to process silver-cobalt arsenide concentrates from its historic Keeley-Frontier mine project.

"The Yukon refinery and the 40 acres of permitted property can help us reduce the permitting timeline in a meaningful fashion for a future development project," said First Cobalt president-CEO Trent Meli.

"We are very pleased to be partnering with Cobalt One, which was one of the first companies to identify the opportunity to revive this historic camp and is now one of the largest cobalt companies in the district."

The refinery is located 25 kilometres from First Cobalt's property at Silver Centre, south of the historic mining town of Cobalt.

Cobalt One (formerly known as Equator Resources) announced in late April that it had signed a binding agreement to acquire the refinery from a numbered company, 36569 Yukon, and its parent company, Yukon Refinery AG. The purchase was expected to be finalized by the end of June.

Cobalt One executive director Jason Bontempo said his company shares the same vision with First Cobalt on bulk mining in the Cobalt camp. His company has claims on 13,470 acres of ground within the boundaries of the town of Cobalt and to the south in Silver Centre and Lorrain Valley.

"Their complementary land package and strong Canadian-based management team made them logical partners for this strategic asset. I look forward to working with Trent and his team."

Under the option agreement, First Cobalt will provide immediate payment of $750,000 to Cobalt One. First Cobalt has until December 31,2017 to exercise the option. At that time, First Cobalt is obligated to pay Cobalt One $2.25 million and pay the equivalent of 50,000,000 shares of Cobalt...