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Everest Metals vends into IPO for uranium superboost

Everest Metals is set to cash in on the latest boom in uranium prices with plans to vend its assets into new ASX hopeful Cobold Metals. Credit: File

Everest Metals (ASX: EMC) has made a strategic move it believes will supercharge its uranium aspirations in a decision to vend its assets related to the element into an upcoming IPO for Cobold Metals.

While Everest, headed by mining veteran Mark Caruso, will continue its gold and critical mineral pursuits, it will retain a 22.8 per cent interest in Cobold following the IPO. The new company is aiming to be listed on the ASX later this year.

On the back of a recent uranium boom, Everest has inked a term sheet to acquire 100 per cent of the Mukinbudin uranium project (MUP) in Western Australia’s Eastern Wheatbelt from private miner Crucible Resources. It plans to spin out the project into Cobold, in addition to its existing Amadeus and Georgina uranium projects in the Northern Territory.

For its part in the deal, Crucible is set for an $850,000 pay-day in cash and shares when Cobold lists at 20c. And Everest will claim an even bigger prize, retaining 13 million shares in the new entity that will be worth $2.6 million at the listing.

The Mukinbudin project, which sits 80km north of the wheat and sheep farming town of Merredin, was originally picked up by Mindax Energy in 2006 in a joint venture (JV) with Heathgate Resources to explore for the presence of sedimentary uranium hosted in paleochannels. In 2011, Mindax reported an inferred JORC resource of 6 million tonnes grading 237 parts per million for a total of 3.25 million pounds of uranium oxide.

It is understood that 40 per cent of the 80km strike remains untested. However, insufficient work has since been done to disclose the mineral resource in accordance with the more up to date JORC 2012 standards.

Everest’s Georgina and Amadeus tenements in the NT, which were granted in August last year, have undergone extensive desktop studies of historical data to generate multiple drill-ready targets.

The Cobold board is chaired by investment banker Warren Edney, with the support of veteran rock-kicker Peter Mullens and Greg Duncan picking up the role of chief executive officer. Previously, the trio were instrumental in the growth of ASX-listed Alligator Energy – a uranium explorer with a market cap of more than $201 million.

Cobold, together with its experienced management team, provides a great home for EMC’s uranium development aspirations. The uranium market outlook continues to be very strong with nuclear demand expected to continue outpacing supply over the mid-term to enhance long-term energy security and attainment of net-zero goals.
Everest Metals CEO and Executive Chairman Mark Caruso

The uranium price has recently earnt its stripes as a commodity star, having nearly tripled in price during the past three years to US$85 (AU$130) a pound.

ASX-listed uranium explorers and producers have similarly enjoyed a stellar run since 2020. The respective share prices of soon-to-be producers Bannerman Energy, Boss Energy and Deep Yellow have all recorded jumps of about 1300 per cent from their all-time lows, while stock in Paladin Energy – as a producer from its Langer Heinrich mine in Namibia – has gained almost 4000 per cent.

As the discussions on achieving net zero by 2050 continue to heat up, governments around the world are once again running the rule over the benefits and costs of nuclear power. Perhaps, most notably, even our own politicians in Canberra have recently brought the prospect of home-grown nuclear power back into focus.

Globally, the market outlook for uranium continues to be strong, with nuclear demand expected to continue to easily outstrip supply as clean energy security remains a priority for governments around the world.

Citibank, in a recent report, cited continued strong nuclear energy trends in the United States, in addition to ongoing production issues reported by major producers in Kazakhstan and Canada, as reasons for remaining bullish on uranium prices. It forecasts a US$97 (AU$145.47) a pound target price in the next three months.

Cobold appears to have put a capable team in place and with a listing date slated for this year’s fourth quarter, it could yet hit the sweet spot for its entry to the ASX … and that could prove to be a major bonus for Everest.

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