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Why is the Cobre (ASX:CBE) share price up 17% today?

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The Cobre Ltd (ASX: CBE) share price is rocketing today after the company announced its acquisition of a large portion of the Kalahari Copper Belt in Botswana.

The Cobre share price has risen 17.5% today to 23.5 cents per share.

Cobre is an exploration and mining company in Western Australia. Its projects include the Perrinvale project in Kalgoorlie and the Sandiman project in the Carnarvon Basin. The Kalahari Copper Belt presents a potentially lucrative opportunity for the company to expand its exploration outreach into Africa.

Cobre’s Kalahari Copper project

Cobre’s shareholders voted today to acquire Kalahari Metals Limited (KML), a UK company that’s the second-largest tenement holder in the highly prospective Kalahari Copper Belt. Cobre is acquiring a 51% stake in the company, funded by the issue of 21.4 million Cobre shares.

The US Geological Survey regards the Copper Belt as one of the world’s most prospective areas for yet-to-be-discovered sediment-hosted copper deposits. Cobre is impressed that KML’s recent discoveries have targeted high-grade structurally controlled mineralisation in the areas it has a licence to explore.

KML holds 8,100 square kilometres in proximity to, and along strike from, known deposits in the Kalahari Copper Belt. Cobre considers Botswana to be a “stable jurisdiction investing heavily in power transmission”.

What did Cobre management say?

Cobre CEO Martin Holland said that the Kalahari Copper Belt acquisition could lead to a large copper discovery for the company.

The board believes that this acquisition of a large portion of the prolific Kalahari Copper Belt (KCB) will create a stronger and more diversified company poised for domestic and international growth.

By adding a stake in the prospective and under-explored KCB in Botswana, we have broadened our project portfolio and increased our exposure to copper, a metal in high global demand.

The board is very excited about the opportunity this represents for the company and following completion of the transaction, which is expected to occur shortly, the Kalahari Metals Limited (KML) team is ready to hit the ground with the next exploration program which includes a drilling campaign.

In a series of resolutions passed today, Cobre shareholders voted for the acquisition.

Cobre share price snapshot

With the Cobre share price jumping 17% today on the acquisition announcement, shares in the company have risen 6.8% in the past month and 46.8% over the past 12 months. The Cobre share price is down 9.6% in 2021, but it’s scraped above the basic materials sector, returning 5% above over the past 12 months.

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Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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