Jim Nelson's Cruz Cobalt Corp. (CRUZ), unchanged at 11 cents on 36,000 shares, will soon have to get to work on the British Columbia diamond and Idaho cobalt properties, which it acquired with some fanfare -- for it at least -- last year. The company issued 4.5 million shares valued at 5.5 cents apiece for each project late last summer, but it has spent just $26,225 on them so far; all of it on the cobalt prospect and all of it to cover claim fees.
Now, says Mr. Nelson, president and chief executive officer, Cruz must spend nearly $20,000 (U.S.) more in maintenance fees on the Idaho cobalt project by September. Further, the company must also spend nearly $20,000 exploring the British Columbia diamond properties by mid-June or pay double the amount in cash in lieu of exploration to keep the claims in good standing.
The British Columbia diamond project was one of the original destinations for Chuck Fipke and Dr. Stuart Blusson's Dia Met Minerals Ltd., back in the 1980s before they turned their attention to Canada's North. The prospect includes three old blocks, the 900-hectare Larry, the 2,000-hectare Jax and the 600-hectare Mark claims, each including historical kimberlite discoveries made by Dia Met's crew.
At the time of the acquisition, Mr. Nelson was enthused about diamonds -- at least from a promotional stance -- as he gushed that the sector had "seen a recent resurgence." Recent as compared with what, he did not say, but regardless, if there was a resurgence it was modest and occurring far removed from southeastern British Columbia. Mr. Nelson did cheer Dia Met's "historic diamond exploration," which, although historical as in old, was hardly historic as in eyepoppingly good.
Indeed, Mr. Nelson moved on with his spiel without discussing any of that history -- and if he had, his new take on a 40-year-old gem hunt would have lost whatever initial intrigue he was able to generate. Not that Mr. Fipke and Dr. Blusson did not find diamonds in their kimberlite -- they did, and it was big news in the early 1980s -- but today's investors are rarely wowed by the odd microdiamond find.
In the early 1980s, Dia Met recovered a bluish-white microdiamond about 0.43 millimetre in length from about 270 kilograms of kimberlite taken from Jax's 20-hectare Jack kimberlite. The tiny gem -- count your zeros carefully -- weighed 0.0004 carat, which although truly microscopic, weighed more than the 0.00015-carat speck that Dia Met recovered from the Mark kimberlite.
With Larry, Mark and Jack -- the old kimberlites, not a latter-day band of the Three Stooges -- now looking to be put on ice again, Mr. Nelson may be looking to the Idaho Cobalt Belt project as a vehicle to generate investor interest. There has been a bit of a resurgence of late in cobalt prices, and while Mr. Nelson does not yet have any cobalt on his new project, the claims surround the Idaho Cobalt Operations (ICO) project, being worked by Jervois Mining Ltd. (JRV), does.
At last report, Jervois listed a resource at ICO, with 5.77 million tonnes measured and indicated at 0.44 per cent cobalt, 0.69 per cent copper and 0.53 gram of gold per tonne, with a further 1.73 million tonnes inferred. Therefore, working ICP as an area play on the ICO project may offer a better shot than the old British Columbia kimberlites.
Cash is not a problem. Mr. Nelson promised last fall that Cruz's $1.7-million in cash allowed it to "be nimble at a time when the junior market sentiment has turned positive." Unfortunately, there has been nothing nimble about Cruz's actions since then, but the company's cash has dwindled to barely $1.5-million nevertheless.