- First Cobalt resources include large swath of under-explored Cobalt Camp land in Canada, mill and mineral extraction facility
- Addition of US Cobalt’s Idaho project creates new activation possibility for potential cobalt source
- Electric vehicle production plans drive fears of cobalt shortage among existing world suppliers
The largest cobalt explorer in North America is actively building its potential, paving the way for possible new production of the tech industry-friendly metal without the political conflicts currently plaguing its overall market. First Cobalt Corp.’s (TSX.V: FCC) (OTCQX: FTSSF) bid to acquire US Cobalt, Inc. (TSX.V: USCO) (OTCQB: USCFF) gives First Cobalt an additional tool to leverage as a player in the cobalt market (http://ibn.fm/AHDpW).
First Cobalt controls 50 historic mining operations for prospecting across Canada’s renowned Cobalt Camp on over 10,000 hectares (24,710.54 acres) in Ontario. The company also owns a mill and the only permitted cobalt extraction refinery in North America capable of production of battery-grade material. The US Cobalt deal provides First Cobalt with access to US Cobalt’s Iron Creek project in Idaho, which has the potential to produce cobalt within a short period.
Cobalt is one of the critical and hard-to-find metals used in the low-heat batteries preferred by modern computer-reliant technology. Smartphones, which have become as ubiquitous as automobiles themselves, use about eight grams of refined cobalt; electric vehicles, which are gaining a demanding audience from China to Chino, California, amid concerns about petroleum product pollution, use more than 1,000 times that amount.
Further complicating the somewhat limited sources of cobalt available for use in lithium-ion batteries, about two-thirds of the entire cobalt supply worldwide flows from the Democratic Republic of the Congo — an African country criticized for allegations of political corruption and child labor violations as it exploits its rich mineral resources to obtain the profits that foreigners provide. First Cobalt’s unique positioning in the United States and Canada opens the door for a possible mineral source that’s untrammeled by the DRC’s conflict issues.
Bloomberg New Energy Finance analysts foresee electric vehicles obtaining cost parity with gasoline engine models by the middle of the next decade and accounting for a third of the global fleet by 2040. However, they noted this month that a hastening supply shortage of cobalt complicates such forecasts, because price spikes resulting from a supply imbalance could stall factors improving the affordability of lithium-ion batteries (http://ibn.fm/L1MlG). In China, the world’s biggest consumer of electric vehicles, the sales of EVs are outpacing predictions, which may further squeeze supplies on a short-term basis.
“The long lead time to bring on new mines and the concentration of cobalt reserves in the Democratic Republic of the Congo mean there is a real possibility of supply shocks in the early 2020s,” the BNEF analysts reported.
First Cobalt’s significant stockpile material and the processing infrastructure that it has at the Canadian site support early production and cash flow generation in a region that the company views as under-explored for its cobalt potential and one that has never been examined for bulk mining opportunities.
US Cobalt’s May 18 announcement that 99.87 percent of its security holders had voted to accept First Cobalt’s acquisition bid noted that the Iron Creek project in Idaho has a historic mineral resource estimate of 1.3 million tons with a grade of 0.59 percent cobalt, but, since the historical estimate is non-compliant with modern NI 43-101 reporting standards, a new resource estimate is expected by October.
“On behalf of the Board and management, I look forward to welcoming our new US Cobalt shareholders,” First Cobalt board Chairman Paul Matysek stated following the announcement. “Our vision is to create the largest North American pure-play exploration and development company in the world. With this acquisition, we have an opportunity to fast track the Iron Creek Cobalt project into one of the first producing cobalt mines this century.”
For more information, visit the company’s website at http://ibn.fm/FTSSF
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