First Cobalt (TSXV: FCC; US-OTC: FTSSF) has found near-surface disseminated cobalt and silver mineralization outside the veins that were the focus of historic underground mining at its Keeley project near Cobalt, Ontario.

Drill hole KF-WV-0013, in the southern portion of the historic Keeley mine, returned a 30-metre intercept grading 0.07% cobalt starting from 22.8 metres down hole. The intercept included 15.7 metres of 0.12% cobalt and 6.2 metres of 0.21% cobalt.

Overall, the drill hole returned 72 metres of anomalous cobalt grading 0.043% starting from 15 metres below surface.

“The 72 metres of 0.043% is not economic but the point is you’re in a system that seems to be distil from the vein that was mined historically, so you’re in a hotspot and we have to drill a few more holes down there to see if there’s a halo that we can start to define,” Trent Mell, First Cobalt’s president and CEO says. “This proves to the market that we’re on to something and there is disseminated mineralization and the mineralization is not hosted solely in the vein.”

Drill hole KF-WV-0013 was collared right next to the Woods vein, which along with the Watson vein accounted for more than 80% of the silver production in the southern end of the cobalt camp area known as Silver Centre.

“It looks like we drilled into an altered structure,” Mell says in a telephone interview from the core shack on the property. “It’s hard to say precisely where relative to Woods because we are now seeing that Woods is more of a mineralized zone rather than a vein in this area.”

First Cobalt president and CEO Trent Mell scouting properties in the Democratic Republic of the Congo. Credit: First Cobalt.

First Cobalt president and CEO Trent Mell scouting properties in the Democratic Republic of the Congo. Credit: First Cobalt.

While the cobalt grades are markedly lower than some of the chip samples the company has taken from the property, Mell says, it’s what you expect to see when you go from mining selectively — that is in a narrow vein underground mine — to a potential bulk tonnage, open-pit scenario. The combination of an open pit and a lot of tonnes means that lower grade material can be quite economic, he says, adding that while the drill results encourage him that the company is on the right path, there is certainly lots more work to do.

The market initially reacted negatively to the news, sending First Cobalt’s shares down 10.6%, or 11¢, to 93¢ per share on 1.1 million shares traded on Feb. 5. But the stock has rebounded, closing at $1.01 on Feb. 6. Over the last year First Cobalt has traded within a range of 42¢ (May 2017) and $1.65 (November 2017). “When we released the long hole some of the bigger institutions called us and said: ‘Way to go’ but the retail side thought it was low-grade,” Mell says. “I’m afraid that some of our readers saw the grade and assumed that the press release was bad news when in fact the opposite is true.”

Mell notes that the length of the hole, at 72 metres, has “camp-wide implications.” The company’s 10,000-hectare land package includes 50 past-producing mines, thirteen of which First Cobalt plans to drill this year in its 26,500-metre drill program.

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