Tuesday, September 25, 2018

First Cobalt Corp. (TSX.V: FCC) (OTCQX: FTSSF) Eagerly Awaits Maiden Resource Estimate as Geopolitics Muddy Outlook for Foreign Cobalt Supplies

  • First Cobalt anticipates completion of maiden resource estimate imminently at Idaho site
  • Company completed 100 percent acquisition of Idaho site earlier this month, is underway on updated mineral resource report including additional drilling that’s already commenced
  • Cobalt market demand expected to double on electric vehicle production needs alone, with larger industry driving additional demand
As geopolitical forces put new pressure on the emerging electric vehicle market, vertically oriented pure-play cobalt company First Cobalt Corp. (TSX.V: FCC) (OTCQX: FTSSF) (ASX: FCC) is feeling excitement about the pending issuance of a maiden resource estimate on the Idaho cobalt project that it only recently acquired full ownership of, which company president and CEO Trent Mell has described (http://nnw.fm/j3pS7) as “one of the most prospective and advanced projects in North America.”
Cobalt and lithium are critical components in relatively short supply for the low-heat, high-efficiency batteries that power a list of computer tech products, most significantly the electric vehicles whose star is rising worldwide amid heightened concerns about pollution and its contribution to planetary climate change. Electric vehicles are generally regarded as much more environmentally friendly than petroleum-burning automobiles, but the large majority of the world’s supply originates in the mine fields of the Democratic Republic of the Congo. The DRC has historically been troubled by human rights violation claims amid its workforce, and it is now expected to declare cobalt as one of its strategic resources (http://nnw.fm/1TbrA), which would lead to increased taxes and royalties for the metal. Similarly, Chile is contemplating raising taxes on lithium and copper (http://nnw.fm/XrD0b) in the heart of the world-renowned “Lithium Triangle” in response to the rising demand for those metals for use in EVs.
First Cobalt’s efforts to find a domestic solution to the production of one of those metals has led it to focus much of its attention on the Iron Creek property that it obtained last year through the acquisition of explorer US Cobalt, Inc., although the Canada-based company also owns more than 50 past-producing mines in Canada’s renowned Cobalt Camp and the only permitted cobalt refinery (currently shuttered) in North America capable of producing battery materials, giving it three significant North American assets. The Iron Creek project is located in Idaho’s prolific Cobalt Belt, and drilling from 2017 and 2018 is now being calculated into a mineral resource estimate that’s expected shortly.
“Our outlook for the Iron Creek Project was instrumental in the decision to eliminate the outstanding royalty and acquire 100% ownership of the project at this time,” Mell stated in a news release earlier this month (http://nnw.fm/J8KOc).
The maiden resource estimate is expected by October, and work is already underway to inform an updated mineral resource report that’s expected in the first half of next year. The company has already stated that it expects the maiden report due within the next week and a half to show wider true thickness of mineralization than was reported during prior exploration.
The company has been drilling at the site with the expectation of extending the strike length in two zones and potentially opening a third zone between drill holes along the strike. First Cobalt found one of the two existing zones to be noticeably copper-rich along the extended exploration line, and some of the lower-grade cobalt-copper finds have high enough mineralization to potentially merit bulk mining there.
Revenue forecasts for cobalt have been mixed this year, and uncertainty after Metal Bulletin reduced low-grade cobalt price assessments by 24 percent last month after a multi-year high in April led some consumers to lower their purchase volumes of cobalt tetroxide compounds (http://nnw.fm/2l8BY), according to FastMarkets. However, the launch of new electronic products ahead of the holiday season is expected to bring an upswing in demand, and, for the long-term international metals, minerals research agency Roskill expects that demand from the battery sector alone will increase the size of the entire cobalt market by more than double by 2027 (http://nnw.fm/onrR5).
Cobalt comprises about 60 percent of the lithium cobaltate in the positive electrodes of lithium-ion batteries. High cobalt prices have driven some electronic product manufacturers to begin using nickel-cobalt-manganese (NCM) lithium-ion batteries as substitutes for the more prevalent lithium cobaltate batteries, but even the NCM batteries contain about 20 percent cobalt.
For more information, visit the company’s website at http://nnw.fm/FTSSF
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