Rick Rule is talking about up-and-coming cobalt, and Bloomberg just put out this article titled: “Billionaire Who Made Killing on Cobalt Bets on Electric Car Fund” so hurrah to us for being on the cobalt train a while back. The message of cobalt’s relevance in light of the electric car boom and the rechargeable batteries that use both lithium and cobalt in their making, is trickling towards the mainstream. Interesting, Rule mentions Congolese, Brazil and Russian, but doesn’t mention Canada’s hot cobalt district in Ontario, nor does he mention Idaho where eCobalt Solutions (formerly Formation Metals) is gunning for production next year. As for the Billionaire article, they are referring to Russian billionaire Vladimir Iorich and his investment fund, Pala New Energy Metal. Iorich is following the “winning bet on cobalt this year by creating a $150 million fund to buy into metals used in electric cars.”
Pala began hoarding cobalt in light of tightening supply and increasing demand from the battery sector. They put their physical holding into the public vehicle, Cobalt 27, and sold shares of the company earlier this year. Pala’s Managing Director, Anthony Milewski, runs the Toronto based firm, and they bought up 2,158.6 tons of cobalt for cash and shares, or about 2.5 percent of annual global demand. Spot prices have increased around 120 percent in the past year to $57,500 a ton.
Like Sprott pointed out, it’s difficult to invest in cobalt as you won’t find cobalt ETF’s, it’s illiquid on the LME, and the metal is typically a byproduct, so you won’t find a list of big producers out there with cobalt as a main focus, it is a side gig for the copper and nickel miners. So gaining exposure could mean dipping into the microcaps and juniors who are ahead of the exploration game.
Cobalt Company Updates
eCobalt Solutions (ECS.T) at their Idaho Cobalt Project is advancing to production the only environmentally permitted, near term primary cobalt deposit in the United States. They have a feasibility study pending and a preliminary mine schedule has been provided to Small Mine Development for costing. Paul Farquharson, President & CEO of eCobalt had this to say: “We are encouraged by the recent progress and preliminary results of the Feasibility Study. As we anticipate results to be filed in September, we are fast tracking key pre-construction activities at the mine site this fall in preparation for the expected recommencement of construction in 2018 after project financing is completed”. He continued, “The recent addition of Floyd Varley, COO, and LLee Chapman, VP Administration has proven instrumental in the advancement of the Idaho Cobalt Project towards these pivotal goals.”
North of eCobalt, Castle Silver (CSR.V) has commenced drilling their past producing, high grade cobalt silver property of the same name, and the campaign has expanded to 2000m- an underground bulk sample returned 1.48% cobalt, 5.7 g/t gold and 46.3 g/t silver. Surprisingly high gold grades.
In late July, CSR announced that SGS Lakefield produced a 14.8% cobalt concentrate from material sampled from the first level of the Castle mine. The cobalt concentrate will now go through Castle Silver’s proprietary Re-2OX process, designed to meet the cobalt hydroxide specifications of four large Japanese metal trading companies that Castle Silver knows in Japan. While the exploration angle is the key focus, the technology angle is a sweet one as well. It means the potential to recycle old lithium batteries and extract the cobalt- it also means Battery manufacturers will be the target market for the planned test samples, which will be cobalt salts (powder) with a range of purities. Re-2OX is extremely adaptable and designed for high recovery of multiple metals and elements from all feeds with varying chemistries. CSR is also working over at the Beaver property, another high grade silver cobalt prospect in Ontario that to any other company would be flagship worthy. They are trading well in this range and more positive drill results pending should, could and might move the dial a notch.
Cobalt 27 (KBLT.V) has closed five royalty agreements where they will acquire seven net smelter royalties (Pala Investments owns 19.48% of this vehicle). Pala’s view on the changing tide of the automobile industry, part and parcel with a broader shift of “reducing carbon intensity in the global energy mix and industrial economy” enabled Pala and team, to be early movers in building a pure play cobalt company. They truly believe in the “exceptional underlying cobalt fundamentals.”
Cobalt Power (CPO.V) has acquired 7,400 hectares of strategically located mining claims in the Silver Center area of the Cobalt camp, Ontario. CPO also found a new mineralized zone on the Smith cobalt project in Cobalt, Ontario. The zone was discovered on surface 800 metres southeast of the Smith cobalt shaft. Approximately 4,000 square metres surrounding the zone were cleared and work is continuing so that detailed mapping and systematic channel sampling can be carried out. This will allow the company to develop a drill strategy for the new zone.
CobalTech (CSK.V) and First Cobalt (FCC.V) have signed a binding letter of intent to join forces and merge companies. They intend to create a leading pure play cobalt exploration company with a portfolio of high-quality exploration assets, 14 former producing mines and a mill facility in the Cobalt mining camp in Ontario. Merging allows them to increase scale and enhance the capital markets’ profile and liquidity, providing greater access to capital across the exchanges.
This is not in any way investment advice nor any sort of stock recommendation. Please do your own due diligence and talk to a qualified investment advisor.
The contents of this article are for informational purposes only. Nothing in this article, in any way whatsoever, should be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy, hold or sell any security. Note the inherent risks when investing in microcap stocks. Prior to making any investment decision, we recommend that you seek outside advice from a qualified and registered investment advisor.
Castle Silver Resources is a marketing client of an arm’s length party to one of the owners of the Stock Syndicate. One or more of the Stock Syndicate owners does own shares in Castle Silver Resources, CobalTech, and the Cobalt Power Group.