As of late, Cobalt has become quite the talk of the town due to its vast use in technology applications such as electric vehicles, batteries, laptops and smart phones just to name a few. With the increased demand for cobalt, speculators have turned bullish on the metal as they anticipate a supply crunch since most of the world’s cobalt comes from the Democratic Republic of the Congo (DRC). In light of the demand pressures, limited supply and increasing requirement of ethical sources, miners have been scouring mining assets in North America for potential supply.
The shift to North American Cobalt properties stems from recent reports of child labour being used in cobalt mining operations in the DRC. Amnesty International stated several companies such as Apple, Microsoft, Tesla and Samsung were sourcing cobalt that was mined by children in their products and the need for an ethical source of cobalt supply is growing. Furthermore, with looming trade wars in the mix, we believe the American government will promote the domestic resource industry to further stimulate the North American economy and push forward with the “Made in America” theme.
An interesting location that has garnered some attention in the United States recently is the coveted 60km long Idaho Cobalt Belt located in Northwestern US in the State of Idaho. The Belt has produced cobalt and copper since the late 1800’s, with total past production and currently estimated resources in excess of ~17 Mt of ore, averaging 0.74% cobalt, 1.4% copper, 1.0g/t gold and REE. Three particular companies in this space are First Cobalt (TSX:V FCC) Hybrid Minerals (TSX:V HZ) and eCobalt Solutions (TSX: ECS).
First Cobalt Corp.
- Shares Outstanding: 337 Million
- Market Cap: $121 Million
- Current Share Price: $0.36 Cents
First Cobalt Corp is a Canadian mining company with assets containing multiple North American cobalt properties and was started with the vision of supplying the growing electric vehicle market. Of note, FCC has three North American assets, one of which, the Iron Creek Project, was recently added through its acquisition of US Cobalt, which is located in the Idaho Cobalt Belt. FCC has recently announced that the company has mobilized two additional drilling rigs to it Iron Creek Cobalt Project and is fully-funded to the tune of $9 Million dollars.
With the company being funded and the recent deployment of additional rigs to the property which is intended to accelerate the drill program, we will be watching the progression of its operations as the company has stated that it will announce its maiden NI 43-101 mineral resource estimate in October of 2018. We will be following closely as there are multiple catalysts in the coming months to confirm the size and grade of The Iron Creek Project which has a historic estimate of 1.3M tons grading an average of 0.59% cobalt and 0.3% copper.
It’s also important to note that TD Securities has rated the Idaho Cobalt Belt to be one of the best potential cobalt resources in the world! Furthermore in 2017 the USGS estimates that there were 123,000 metric tonnes of cobalt resources in the Blackbird district of Idaho. https://pubs.usgs.gov/pp/1802/f/pp1802f.pdf
- Shares Outstanding: 30 Million
- Market Cap: $5.7 Million
- Current Share Price: $0.19 Cents
Strategically located in the Idaho Cobalt is the CAS Project owned by Hybrid Minerals. The CAS cobalt property is near the Iron Creek Project owned by First Cobalt Corporation. The Hybrid Minerals CAS Project is located in prime location within the Idaho Belt which contains several cobalt, copper and gold deposits. The CAS Project consists of 85 mining claims yet to be fully explored and mined. Investors should note that Hybrid Minerals has recently appointed a new Chief Executive Officer named Ross Phillips. Mr. Phillips has held many senior roles in many public companies which includes, Director and previously Chairman of First Cobalt Corp (TSX-V: FCC) where Mr. Phillips built a portfolio of North American cobalt assets for the company and its shareholders. Most notably, Mr. Phillips was a Senior Manager, Financial Analyst and moved up to Director of Business at one of Canada’s leading power generation company Capital Power Corp (TSX: CPX) whose market cap exceeds a 2-billion-dollar valuation.
With the addition of Mr. Phillips at the helm of Hybrid Minerals, we are watching the developments at Hybrid Minerals very closely as the new CEO builds out the CAS Project for shareholders. With a mere $7 Million-dollar market cap and coupled with its tight share structure, we could see the share price move rapidly on positive news flow. Also of note is that the company has granted options to its directors back in February 2018 with a strike price of $.40 cents. With the current share price of $0.19 cents, option holders will need to see an 110% share price appreciation for them to reach par level of being exercised. It is always interesting to see companies who have issued options/warrants at higher prices relative to its current share price as this could present a relative “bargain” for investors.
eCobalt Solutions Inc.
- Shares Outstanding: 157 Million
- Market Cap: $121 Million
- Current Share Price: $0.77 Cents
eCobalt Solutions Inc. is a mineral exploration company whose focus is on their Idaho Cobalt Project located in the Idaho Cobalt Belt that is Wholly owned by its subsidiary Formation Capital Corporation. The Idaho Cobalt Project is located on the Northeast portion of the Idaho Cobalt Belt. eCobalt is committed to social responsible recovery and remains to be one of the only environmentally permitted cobalt mine in the United States. The company has recently announced an update in- regards to the construction currently underway at their Idaho Cobalt Project which is slated to begin production in 2020. Operations at the site include construction of the water treatment plant (WTP), installation of potable water wells and distribution system, and completion of building pads for the crusher and concentrator. Given how advanced eCobalt is and the recent sell-off in share price, we will keep watch during the summer months to see how this company progresses and what the opportunity for investors may be.
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