Source: Ron Struthers for Streetwise Reports 05/08/2018
Ron Struthers of Struthers Resource Stock Report profiles a microcap company with a prospective cobalt property in BC’s Golden Triangle.
A key element in lithium-ion batteries (LIBs) is cobalt. I have focused a lot on graphite and lithium, but cobalt is unique in its own regard and probably has more bullish factors than graphite, lithium and nickel. There are two major factors that differ cobalt from the other LIB metals. Most of the world’s cobalt is currently sourced from an unstable political source, namely Democratic Republic of the Congo (DRC). Wars continue to rage there and currently, The Guardian writes that 13 million Congolese need humanitarian aid. No doubt it is one of the worse places on earth today, very sad. The other factor is cobalt is only mined as a byproduct of other mines, with 98% as a byproduct of nickel and copper mines. Only Moroccan and some Canadian arsenide ores extract cobalt only.
Cobalt is classed as a critical raw material by the EU due to both being an essential mineral in creating a sustainable planet, and 55% of the global supply originating from the politically unstable DRC. The large percentage of cobalt that originates from the DRC highlights the importance for companies to follow Due Diligence procedures with regards to responsible sourcing.
Unlike lithium, graphite and nickel, the major end use of cobalt is already denominated by the LIB market. The other major use is alloys and if you lump together the similar items here such as hardfacing, super alloys and hard materials, it gets close to the LIB demand.
The LIB demand started to heavily influence the cobalt price in early 2017 and it shows no signs of abating yet. It will be difficult to bring new supply on stream because it has to come as a byproduct of nickel or copper. The heavy reliance on the DRC, where China gets a lot of its supply, is very precarious. This graphic comes from a cobalt report by Palisade Research and although it is from 2016, nothing has really changed on this front and is still very relevant.
The cobalt price moved over $15 in February 2017 and shows no sign of slowing. Not long ago I pointed out that copper was the best performing element among base and precious metals. If we add in the battery-tech metals, cobalt up 180% moves to number one ahead of copper.
In the past year lots of junior companies have been rushing around trying to find good cobalt projects. The best place to find cobalt is the mining camp in Ontario in the vicinity of the town called Cobalt. Over 50 million tons have been mined there. At PDAC this year, I was very fortunate to meet, through an associate of mine, “The King of Cobalt” for an anomalous name to use at this time. Talk about foresight, because this fella spent many of the last several years accumulating properties in the camp. For the most part, the majors held the best ground but they let it go as the metals bear market pummeled downward from 2011.
Most of the juniors sourced their projects through this gentleman. As you might expect, he has kept the best properties to himself but they are in a private company. This will go public later this year and as far as I am concerned there is no sense buying the others here, when in due course we can buy into the best.
That is many months away yet and I want to take advantage of the current market correction to buy another cobalt company that is cheap, a new play so not known yet and we can buy in the ground floor. The next best area for cobalt in Canada is British Columbia, and no other than the Golden Triangle near Hazleton where Garibaldi and Jaxon reside. The company just went public in March, has hardly traded and is not known yet.
Primary Cobalt Corp.
CSE:PRIM Recent Price $0.13
Shares outstanding 19.6 million
Management
Patrick CT Morris, CEO and Director, is an entrepreneur and capital markets executive experienced in a number of industries including resource exploration, pharmaceutical cannabis, Blockchain technologies and finance. With 15 years capital markets experience raising funds for microcap companies and executing corporate development strategies, Mr. Morris has taken numerous companies public via IPO, RTO and CPC.
Kenneth Phillippe, Chief Financial Officer, is a Chartered Professional Accountant and received a Bachelor of Commerce degree from the University of British Columbia in 1976 and obtained his professional accounting designation in 1981, after articulating with the firm of Thorne Riddell (now KPMG). In 1981 he established a private accounting practice, which continues to the present. He is currently an officer/director of a number of junior listed companies.
Barry Hemsworth, Director, received a Bachelor of Commerce degree from the University of British Columbia (UBC) in 1964 and a law degree from UBC in 1965. (At the time he was enrolled in a combined commerce/law program at UBC). He was a practicing lawyer and a member in good standing with the Law Society of British Columbia from 1966 to 2009 when he retired. In the past five years, Mr. Hemsworth has acted as a consultant to several reporting issuers and been involved in the establishment of several private companies.
John Michael Mackey Director, received a Bachelor of Arts in International Studies and Political Science in 1961 from UBC and a law degree from UBC in 1964. He was a practicing lawyer and a member in good standing with the Law Society of British Columbia from 1965 to 1991. He was a director of the following two TSX.V companies: Vangold Resources Ltd. from January 2008 to December 2013 and Vanoil Resources Ltd. from January 2009 to February 2013.
Management is very strong in corporate finance …read more
From:: The Energy Report