Wednesday, December 12, 2018

Development of First Cobalt Corp.’s (TSX.V: FCC) (OTCQX: FTSSF) North American Assets Shows Prescience as Congo Boosts Costs of Cobalt Traffic

  • Globe-leading cobalt supplier DRC’s decision to declare metal a strategic resource includes exponential increase in industry tariffs
  • Cobalt is a critical element of computer-powering lithium-ion batteries
  • First Cobalt has North America’s only cobalt refinery capable of producing material suitable for lithium-ion batteries
  • Company is testing varied cobalt feedstocks for suitability as it eyes possibility of restarting the shuttered refinery
  • First Cobalt is also fast-tracking development of its flagship cobalt exploration project in Idaho, with plans to complete updated resource estimate by early 2019
The announcement that government officials in the Democratic Republic of the Congo have signed off on a long-anticipated plan to declare cobalt a strategic resource (http://nnw.fm/GqBt4) underscores the importance of efforts by pure-play cobalt explorer First Cobalt Corp. (TSX.V: FCC) (OTCQX: FTSSF) (ASX: FCC) to establish a North American source for producing the computer-complementing metal.
Reuters’ report on the DRC prime minister’s signing of the strategic metal declaration states that the decree also affixes a 10 percent royalty rate for mining companies to pay in order to extract the metal, which is in demand because of its critical importance to the lithium-ion batteries used in products that include smartphones, mobile computers, electric vehicles and military technologies. The royalty has been a fraction of that amount — at 3.5 percent – since June, when that rate superseded the prior two percent royalty.
While computer products utilizing lithium-ion batteries are ubiquitous in modern society on a global basis, the sourcing of the batteries’ key components is not at all cosmopolitan; the DRC is responsible for more than 60 percent of the world’s current supply and is far and away the world’s largest producer. China, parenthetically, controls the majority of the world’s cobalt refining operations and receives about 90 percent of its raw cobalt from the DRC.
Hence the interest of companies such as First Cobalt in developing domestic sources of the metal in North America that are not dependent on the market influence of overseas powers. First Cobalt has been fast-tracking development of exploration in Idaho at what it regards as its flagship project, and the company is also working on restarting its cobalt refinery in eastern Canada — the only currently permitted cobalt refinery in North America capable of producing materials for lithium-ion batteries (http://nnw.fm/86n7Z).
The company also has a third significant North American asset — the Greater Cobalt Project in the renowned Canadian Cobalt Camp of Ontario, with more than 50 mines that were historically productive.
“Our vision at First Cobalt is to become the largest primary cobalt producer outside the DRC and the most attractive cobalt stock on the market,” the company’s website states. “Our strategy at First Cobalt is to explore, develop and refine material in North America for sale back into the American battery market.”
First Cobalt recently began testing cobalt hydroxide material as feedstock for its refinery (http://nnw.fm/oefY4). Different cobalt feed materials are being tested for suitability using the company’s current flowsheet, beginning with cobalt hydroxide to see how it will perform in production of cobalt sulphate or metallic cobalt products for sale in the North American market.
Drilling at the Idaho site has identified an expanding number of areas with commercial potential, and the company is working to complete an updated resource estimate by early 2019. The company announced its latest drilling results shortly before Thanksgiving (http://nnw.fm/K9oVa), with CEO Trent Mell’s evaluation that the results “confirm the continuity and consistency of mineralization predicted by our geological model and add further support for the development vision for the future of the project as we build towards the updated resource estimate in early 2019.”
In an effort to potentially restart the refinery within 18 months and use it to help fund ongoing exploration at the Idaho site, First Cobalt’s executives are in talks with third party investors who could help “minimize or eliminate any equity dilution” as the refinery gets up and running, according to the news release.
For more information, visit the company’s website at http://nnw.fm/FTSSF
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