Canada’s Best Microcap Cobalt Play $CSK.V

ColbalTech

At $16.67 a pound, cobalt is getting due love these days.  The shiny brittle metal is riding shotgun with Lithium as Tesla jacks up the demand for this by-product metal used to manufacture Lithium-Ion (Li-ion) batteries. As a matter of fact, 42% of the global cobalt market is attributable to the battery industry alone with the remaining 58% driven by industrial and military applications. Cobalt is used in super-alloys, aircraft engines, drill bits, catalysts, magnets, pigmentation, and gamma rays. The Democratic Republic of Congo (DRC) in Central Africa produces the most cobalt globally, which is typically a by-product of copper and nickel mining. Third on the list of cobalt producing countries is Canada, due to the Kidds Creek, Sudbury and Raglan copper/nickel mines

CobaltWhether he gets there or not, Elon Musk is aiming to produce 500,000 Electric Vehicles (EV’s) a year by 2018, and Tesla is straight up calling for more North American cobalt suppliers so that supply meets their demand. Sebastien Gandor, a contributor to TechCrunch had this to say in his article No Cobalt, No Tesla?: “Tesla has stated that the cobalt it needs will be sourced exclusively in North America, but the math doesn’t seem to add up.” In other words, North America is not yet pulling their cobalt production weight with a big off take buyer in the commodity’s back pocket.

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For Tesla to scale up electric vehicles to the masses, ongoing supply of affordable Li-ion batteries is a necessary part of the equation.  It is a fact that Li-ion batteries use more cobalt than lithium. The market noticed the obvious Tesla metal play, lithium, and now more investors are tuning in to the logical cobalt opportunity at hand.

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CobalTech Mining

CobalTech Mining Inc. (TSX.V: CSK) is a North American cobalt company with near-term production assets in Ontario, Canada. Their mission is to obtain 100% ownership of mineral deposits and processing facilities, giving CobalTech the ability to vertically deliver from the ground to the market. The company is acquiring assets in a mining friendly area known for its geological setting, with unique mineralization composed of quartz-carbonate veins enriched in silver, cobalt, nickel, bismuth and arsenic.

CobalTech is positioned to become North America’s first vertically integrated cobalt processing company.  They envision the full spectrum, exploring for and producing cobalt for eventual sale to the lithium battery industry.

ColbalTech currently has 70.7 million shares outstanding, and $CSK is trading well, emerging from the land of shells mid last year, as you can see from this chart:

CSK

CobalTech’s SEDAR Link here: CSK Profile

The Duncan Kerr Acquisition

The Duncan Kerr property, acquired in November of last year, is a 32.3 hectare, past-producing property located near Cobalt, Ontario. That’s right folks, Cobalt Ontario.  The area was made famous from major discoveries by the Timmins and Kirkland camps. Between 1905 and 1966 the mines on the Duncan Kerr property produced approximately 32.7 million oz’s of silver as well as significant cobalt as a by-product.  To date, 464.9 million ounces of silver have been produced in Cobalt, Ontario.

The Duncan Kerr property has a fully permitted 360 tonne per day (tpd) milling facility with a gravity and flotation circuit- mill capacity could be expanded to 500 tpd. Other infrastructure includes access to a main road, highways, railway spurs, power, and ample water supply.

On January 17th, 2017, the CobalTech announced assay results on four samples collected from Duncan Kerr.  The grades came back strong; so strong in fact they need to reassay. 

From the official press release:

“Three (3) of the four (4) samples reached the upper instrumental assay limits for cobalt and are currently being re-assayed using a higher limit method to adequately quantify the cobalt content of these rocks.  Silver content is usually very erratic on this type of deposit and these samples were selected to try to estimate a background value.  It is interesting to note that even the “barren” material returned positive silver grades.

Antoine Fournier, President & CEO comments: ‘Although the intent was to gain an honest appraisal of the project, we were very pleased to see that cobalt grades were above detection limits for the 3 samples with visible mineralization. These are samples coming from rock piles lying directly at surface on the property. CobalTech will now put together a plan of action to evaluate the surface potential of the project.’

The samples were selected to be characteristic of the different rock units observed on the project and collected from within the historic workings.  It must be reminded that grab samples are selective by nature and may not be considered representative of the overall grade of the rocks from the project, they may only serve to illustrate its potential.”

Duncan Kerr DD Samples

The Duncan Kerr prospect has two past-producing mines on the property, the Kerr Lake and Lawson Mines, plus multiple stockpiles, and a fully permitted milling facility. They estimate an additional 1.3 million tonnes of stockpiles exist on the property.

In the early 1900’s a total of 8 shafts were sunk on the Kerr Lake claims, along with one adit that was driven south from the shoreline of Kerr Lake. The main Number 3 shaft was sunk to a depth of 550 ft with 9 levels being developed. A total of 4 shafts were sunk on the Lawson mine claims with the deepest shaft, the No 8, sunk to a depth of approximately 410 ft.

Here is a link to the recent technical report (pre name change, so CobalTech was Big North Graphite at that point): NI 43-101 Technical Report On The Duncan Kerr Property Larder Lake Mining Division, Northeastern Ontario  There are no current cobalt resources or reserves at this time.

CobalTech announced on January 24, 2017 the addition of 8 New Cobalt Properties to their portfolio, showcasing management’s aggressive maneuvering to build value with a portfolio of properties that are early stage, but de-risked by previous historical data:

Each property is centered on an anomaly listed and verified in the government mineral occurrence database.

The eight (8) new cobalt properties in Quebec, Canada are advantageously located for synergy with the Company’s Ontario located cobalt properties. They total an area of 1535 hectares of prospective ground where past sampling have returned values ranging from 0.1% to 0.71% cobalt.  Cobalt commonly being a secondary metal or by-product, these anomalies have been selected for their high Co ratios with respect to total metal contents.”

The package deal is also cash light ($50,000 and 500,000 in shares) which investors should like at this stage of the game.

CobalTech

Run by a Solid Management Team

The team ticks all the boxes- they are proven leaders in their field, and well known assets with deep networks in the mining industry. This means more acquisition opportunities will come their way. Mr. Fournier was announced as the new President, CEO and Director Nov 23, 2016 with a mandate “to evaluate the current state of development of the Duncan Kerr Project and determine the best route to accelerate this asset up the value curve and into production.” 

Antoine Fournier

President, CEO and Director

Mr. Fournier is a geologist with over 25 years’ experience exploring for precious and rare metals, industrial minerals and diamonds. He graduated with a Bachelor’s degree from Concordia University and a Master’s degree from McGill University where he focused on the Rare Earth Mineralization associated with the St-Honoré Carbonatite, Québec. Mr. Fournier was part of the discovery team behind the Knife Lake graphite deposit (Quebec), the Youga gold deposit (Burkina Faso) and the Cargo diamondiferous kimberlite (Nunavut) amongst others. For the past 15 years, he’s been involved in the launching, restructuring and organizing of junior companies assisting in defining their mission, acquiring and developing their assets.

On Dec 15, 2016 they announced that Mr. Bragagnolo would Chair the Board for CobalTech:

Bruce Bragagnolo

Chairman of the Board

Mr. Bragagnolo was the co-founder and former Chief Executive Officer of Timmins Gold Corp. an emerging intermediate, Mexican-focused gold producer. Mr. Bragagnolo was also the co-founder and the former CEO of Silvermex Resources Ltd., a silver explorer which was acquired by First Majestic Silver in 2011 for a market capitalization of $120 million. While at Timmins Gold Mr. Bragagnolo oversaw the administration, business development strategy and the financing of the Company through its IPO, acquisition and construction of the San Francisco Mine, its listing on the TSX and NYSE-MKT, and the acquisition of the Caballo Blanco Project, the Ana Paula Project and the El Sauzal Mill. Mr. Bragagnolo has been responsible for structuring and raising over $120 million in equity and debt for Timmins Gold and overseeing the growth of the Company as it transitioned from junior developer to a +100,000 oz. per year gold producer with a peak market capitalization of over $450 million.

Back to Battery Demand

CRUGroup, Independent Authority on Mining, Metals and Fertilizers, had these positive comments in their article Cobalt and Lithium will be the big winners:

“Battery demand is the most important driver of the cobalt and lithium markets – far more so than for manganese and nickel – meaning that prices for these metals will see the biggest effect from the forecast demand growth…

Additional demand will lead to supply deficits

The result of surging demand for batteries, and the metals within them, mean that CRU’s forecasts reveal looming market deficits for both cobalt and lithium within the next 5 years UNLESS new supply comes on-stream in the period. We also see demand for cobalt surging in the next 5 years.”

Cobalt Demand

Cobalt Demand

Conclusion

Cobalt miners are not waiting in the wings to meet the impending supply requirements predicted to happen from Li-ion battery demand.  Africa is riddled with unfortunate child labour issues directly tied into cobalt mining, and geopolitical uncertainty – a big threat to supply. And no one is killing the electric car any time soon. Time to add $CSK.V to your radar.

UPDATE: From February 21, 2017 Press Release 

Cobaltech Mining Inc. has signed a letter of intent to acquire a fully permitted cobalt processing facility, situated in the settlement of north Cobalt, Ont., Canada, and strategically situated near the company’s current portfolio of cobalt mineral properties.

This acquisition will enable Cobaltech to become one of the first companies in North America to be able to process and refine cobalt. The processing facility is currently fully permitted and production may be expanded to a maximum of 4,000 tonnes per day before additional permitting is required.

CobalTech

~DISCLAIMER~

This is not in any way investment advice or 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.

CobalTech Mining Inc. is a client to an arm’s length party to one of the owners of StockSyndicate.com. One of the Stock Syndicate owners does own shares in CobalTech Mining Inc. with no plans to sell in the next 60 days.

Comments

  1. says

    This is an interesting opportunity for investors wishing to invest in cobalt. I have visited the sight and am also aware of the current undertakings to make this company a cobalt player in Canada. There are other cobalt plays in Ontario which have yet to be published and are even larger in scope and potential in the short term and long term. Cobalt in Ontario will shine brightly in the years to come as its demand increases due to battery market growth in North America. This growth in cobalt demand will allow for the reopening of waste rock and slag piles to be processed through local refiners and expand the cobalt output in Ontario and Canada.

    • EndzoneGreen says

      Thanks Gary, great point re the waste rock etc. Easy pickings. This story should build momentum alongside the commodity’s price. When did you visit the CSK sight?

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