Chilean Cobalt Corp. (OTCQB:COBA) said its wholly owned Chilean subsidiary, Baltum Minería SpA, has signed a definitive option agreement covering mining concessions in the historic San Juan mining district of northern Chile. The arrangement is intended to consolidate substantially all of the past-producing La Cobaltera project area, but title to the optioned concessions remains subject to exercise of the option and payment of the required instalments.
#Concessions covered by the agreement
The option covers approximately 1,381 hectares of exploitation concessions and 2,900 hectares of exploration concessions. The properties are predominantly brownfield areas with historical cobalt and copper mining activity, as well as historical workings, exploration targets and tailings piles.
Including Chilean Cobalt’s existing holdings at La Cobaltera and El Cofre, the company said its owned and optioned position would comprise approximately 7,758 hectares of exploitation concessions and 2,900 hectares of exploration concessions. At La Cobaltera, the exploitation concession position would increase from 3,007 hectares to approximately 4,388 hectares, alongside the 2,900 hectares of optioned exploration concessions. The company separately owns 3,370 hectares of exploitation concessions at El Cofre, which extends northeast from La Cobaltera.
#Staged consideration and other obligations
The agreement provides for fixed consideration of $28.3 million, payable in stages, as well as royalty and other obligations. The stated consideration includes $500,000 previously paid under the May 2026 Terms of Reference and $300,000 paid when the agreement was signed.
A further $1.5 million, together with reimbursement of agreed mining concession patent fees, is due no later than December 30, 2026. That date will constitute the agreement’s effective date. The agreement then provides for $6 million within 120 days, with two optional 30-day extensions available for $150,000 each. A further $10 million is due within one year of the effective date and no later than December 30, 2027. The final $10 million is payable upon exercise within two years of the effective date and no later than December 30, 2028.
From the effective date until acquisition or earlier termination, Baltum will pay $25,000 in monthly rent and take on specified concession patent fee, security and maintenance responsibilities. Mineral sales during that period are subject to a 20% payment after deductions for specified direct production and selling costs.
#Royalty terms
If Baltum exercises the option, the sellers will receive a 1.5% net smelter return royalty covering the optioned concessions and certain existing Baltum La Cobaltera concessions. The royalty would apply for 99 years from the commencement of commercial production.
Baltum may repurchase half of the royalty for $10 million within three years of commercial production, reducing the royalty to 0.75%. The subsidiary also has specified rights of first refusal over initial royalty sales, except where the sale is to an existing NSR beneficiary or is made for estate and lineage descendancy transfers.
#Current status of the properties
Small-scale mining took place at several sites on the optioned properties earlier in 2026. The properties have since been vacated, and no mining operations are currently underway.
Chilean Cobalt said consolidation would allow historical workings and mineralised trends to be assessed across property boundaries. The company also said it would provide flexibility to consider shared infrastructure, processing alternatives and development sequencing, although further terms and obligations apply to the transaction.
#Previous exploration and resource work
The company’s 2018-2019 exploration programme at La Cobaltera included reviews of historical records, geological mapping, surface and underground sampling, geophysical surveys, diamond drilling and preliminary metallurgical testing.
Independent NI 43-101 technical reports prepared by SRK Consulting in 2019 recorded 96 drillholes totalling approximately 21,943 meters. Approximately 14,022 meters in 68 holes targeted cobalt-rich vein systems at Rosa Amelia, while approximately 7,921 meters in 28 holes tested additional copper-cobalt targets across the district.
The work identified approximately 12 kilometers of cobalt-rich vein trends and more than 20 kilometers of copper-rich vein trends across the broader project area. Priority areas included Rosa Amelia, Farellon, Despreciada, Prospera, Quebradita, Marengo, Las Ligas, Los Yoles and Emilia.
SRK Consulting prepared an initial NI 43-101 mineral resource estimate for the Rosa Amelia area in November 2019. Detailed resource-definition work covered approximately 2.5 kilometers of vein systems at Rosa Amelia, Rosa Amelia Menor and Farellon. The company said the work covered only a limited part of the broader mineralised trends, while the modelled Rosa Amelia-area veins remain open at depth.
#Exploration limits and tailings testing
Chilean Cobalt said mapped vein lengths do not establish continuous economic mineralisation. It also said that further drilling, metallurgical testing and technical studies are needed to assess additional resources and potential development.
Conceptual scoping-level technical and economic evaluations conducted by SRK across eight target areas used synthetic models, assumed grades and extrapolations into untested areas. These exercises are separate from the Rosa Amelia mineral resource estimate and do not constitute mineral resources, establish economic viability or represent a completed project-wide preliminary economic assessment.
The company is also evaluating historical tailings for metal recovery, processing requirements and potential product suitability. Further characterisation and testing are required to establish the quantity, recoverable metal content and economic potential of the material. The programme complements Chilean Cobalt’s participation in a CORFO-supported consortium examining cobalt recovery from historical mine waste.
#AI and machine learning programmes
Chilean Cobalt has begun artificial intelligence and machine learning work with Mineral Forecast and MinersAI. The programmes combine historical mine records, company exploration results and geological and geophysical datasets to help review historical interpretations, refine known targets and identify additional prospective areas.
The company said the work, together with field mapping, sampling and hyperspectral imaging, is being used to prioritise areas across La Cobaltera and El Cofre. AI and machine learning targets require field verification and drilling.
#Infrastructure and related arrangements
Chilean Cobalt said La Cobaltera has road access, nearby power infrastructure, proximity to the Port of Huasco and regional processing facilities, and access to an experienced mining workforce. The company said these features support its evaluation of phased brownfield development initially focused on near-surface oxide and transition mineralisation, while retaining deeper sulphide potential.
The option agreement follows an executed cobalt-copper concentrate offtake agreement with Glencore and a processing letter of intent with US Strategic Metals. Chilean Cobalt also referred to a USD $375 million project financing letter of interest from US EXIM Bank for proposed development at La Cobaltera and El Cofre. The EXIM letter is not a financing commitment; financing remains subject to due diligence, approvals, and definitive agreements.
#Key Takeaways
- Baltum Minería signed a definitive option agreement covering approximately 1,381 hectares of exploitation concessions and 2,900 hectares of exploration concessions in northern Chile.
- Title to the concessions remains conditional on exercising the option and making the required staged payments.
- The agreement provides for fixed consideration of $28.3 million, plus royalty and other obligations.
- Exercise would grant the sellers a 1.5% NSR royalty for 99 years from the commencement of commercial production, subject to the stated repurchase right.
- Further drilling, metallurgical testing and technical studies are required to assess additional resources and potential development.
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