Cobalt Miners News For The Month Of March 2018
Mar. 25, 2018 2:26 AM Summary
Cobalt spot price news - Spot prices rise 18.7% in the past month as inventory falls. The cobalt spot price is now over USD 40/lb, and approaching USD 100,000/tonne.
Cobalt market news - China leaving West behind in race for electric-car raw materials. Battery makers descend on Australia, Canada cobalt developers.
Design News - "Cobalt will remain an expensive but necessary ingredient in our battery energy future."
VW secures $25 billion battery supplies in electric-car surge.
Cobalt miner news - China's GEM had agreed to buy 52,000 tonnes of cobalt from Glencore over 3 years.
Welcome to the March 2018 cobalt miner news. For some background on the cobalt miners, please check out my earlier articles:
The past month has indeed seen the great cobalt rush intensify triggered in part by Volkswagen (more below). Or as Cobalt Blue CEO Joe Kaderavek says - “We are starting to see the first signs of an arms race to secure long term cobalt supplies.” Added to this cobalt prices moved above USD 40/lb, and is fast approaching USD 100,000/tonne.
The deal fever was kicked of this month with Volkswagen announcing a stunning $25b battery supply deal from Samsung SDI Co., LG Chem Ltd. and Contemporary Amperex Technology Ltd [CATL]. Then Samsung C&T Corp (an affiliate of Samsung) announced it is working on a cobalt deal with Somika SPRL, followed by China's GEM large cobalt deal with Glencore, and finally Cobalt Blue announced a new strategic partnership with LG. This follows the recent SK Innovation deal with Australia Mines. What a month!
Cobalt price news
As of March 22, the cobalt spot price was US$43.09, an 18.7% increase from US$36.29 this time last month. The LME cobalt price has now reached ~95,000/tonne and is closing in on USD 100,000/tonne. The London Metals Exchange [LME] inventory has continued to fall and is slightly lower this month (see graph below).
On March 8 MetalBulletin reported, "Cobalt prices hit $40/lb as larger tonne inquiries dominate. High prices are, at least for now, unlikely to deter purchasing, because tight supplies, strong demand from the battery and super-alloy sectors and larger volume inquiries are sufficient to underpin the latest gains, market sources told Metal Bulletin."
Cobalt demand and supply
Investing News state that Macquarie Bank forecasts "a deficit of 885 tonnes is expected in 2018, with deficits of 3,205 tonnes and 5,340 tonnes expected in 2019 and 2020, respectively."
Darton forecasts increasing cobalt deficits from 2017 to 2020
On March 2 Mining Weekly reported: "EV penetration rates to drive demand for numerous raw materials. Roskill’s baseline forecast suggests that cobalt demand from the battery sector could reach 240 000 t in 2027, up from the current volumes of about 56 000 t. “That is a huge increase that will put huge strain on supply – especially mine supply – after 2021,” Bedder points out."
On March 8 Industrial Minerals reported: "Chinese NEV subsidies prioritize higher driving range, energy density. China's 2018 new energy vehicle [NEV] subsidies prioritize pure electric vehicles with higher driving range and energy density while phasing out subsidies for vehicles with ranges of under 150km."
A little bit of light teading
On March 9 Investors.com reported: "This costly ingredient in electric-car batteries hits 10-year high. The price of cobalt — a scarce and costly ingredient in lithium-ion battery cells — has quadrupled over the past two years and surged to $40 per pound this week, its highest level since 2008, the Financial Times reported, citing Metal Bulletin. The price rise comes as automakers double down on their commitment to an all-electric future and set ambitious output targets for electric vehicles."
On March 13 Bloomberg reported: "Volkswagen secures battery supplies for two biggest markets. Volkswagen AG secured 20 billion euros ($25 billion) in battery supplies to underpin an aggressive push into electric cars in the coming years. The world’s largest carmaker will equip 16 factories to produce electric vehicles by the end of 2022, compared with three currently, Volkswagen said Tuesday in Berlin." Bloomberg also reported: "The German manufacturer’s plans to build as many as 3 million of the cars a year by 2025 is backstopped by deals with suppliers including Samsung SDI Co., LG Chem Ltd. and Contemporary Amperex Technology Ltd. for batteries in Europe and China."
On March 13 Bloomberg reported: "Samsung in talks for multi-year cobalt deal from Congo. Samsung C&T Corp., an affiliate of the world’s biggest smartphone maker, is in talks for a multi-year deal to buy cobalt from a Congolese miner, joining Apple Inc. in the global rush to secure supplies of the metal at the heart of the electric-car boom. Samsung C&T has approached Somika SPRL to buy cobalt produced at its Kisanfu mine in the Democratic Republic of Congo after only buying copper from the company for the past four years, according to people familiar with the situation."
Note Apple (AAPL) has also been reported to be in talks to buy into the cobalt miners. The report stated: "Apple is seeking contracts to secure several thousand metric tons of cobalt a year for five years or longer."
On March 14 Investor Intel wrote, "Cobalt supply chain massively disrupted by Glencore and China. China-based GEM is reported to have signed an agreement with Glencore PLC for 52,000 tonnes of cobalt hydroxide." The deal runs over 3 years.
On March 15 Mining.com reported, "Cobalt to be declared a strategic mineral in Congo. Royalties paid to the government from cobalt and coltan mining will jump to 10 percent from 2 percent previously. Miners of the two metals used in batteries, would have paid a royalty of 3.5 percent under the new code if they had not been designated as strategic. "We have to make sure for the next 20 years we make money from these minerals because demand is going to be so high. It's going to continue to grow and we are not going to stop raising the royalties on these minerals. International mining companies have said the new mining code will deter foreign investment but have agreed to start negotiations with the government over measures to implement the code."
On March 15 Bloomberg reported: "China leaving West behind in race for electric-car raw materials. China is first out of the blocks in the global race to secure raw material supplies critical for the batteries that will power the electric vehicles of the future. Glencore will sell a third of cobalt output to Chinese company. Deal will shake carmakers as brands rush to lock down supply."
On March 19 Reuters reported: "Nervous Asian battery makers are turning to early-stage cobalt projects in Australia and Canada to lock in supplies of the critical battery ingredient ahead of expected shortages as demand for electric vehicles revs up. Mine developers say interest from Japanese and Korean firms is particularly strong as they compete with rivals from China, which has built deep supply chain ties with the Democratic Republic of Congo, the world’s top producer. “We are starting to see the first signs of an arms race to secure long term cobalt supplies,” said Joe Kaderavek, chief executive of Australia’s Cobalt Blue."
On March 20 Mining Weekly wrote, "EV adoption rate reaching critical mass as search for ethical cobalt heats up. Cobalt company Cobalt 27 is seeing an ideal storm brewing for its key commodity as the adoption rate of electric vehicles [EVs] accelerates faster than even optimistic forecasts had speculated. “Currently, Wall Street has projections for 2025 of an EV penetration rate of 15%. If you extrapolate the current growth rate, 462% year-on-year in January, and EV adoption growth of 1.8% at year-end, one is actually looking at something closer to 30% penetration by 2025."
Cobalt company news China Molybdenum [HKSE:3993] [SHE:603993] (OTC:CMCLF)
No news for the month. A relevant article for all the DRC cobalt miners is "How Congo faced down some of the world's biggest mining firms." The summary being the DRC plans to go ahead with their 10% cobalt royalties and 50% profits tax, despite several miners threatening to shut down their DRC operations.
On March 16 Reuters reported, "Glencore signs massive cobalt sale deal with China's GEM. Glencore Plc, the world’s biggest producer of cobalt, has agreed to sell around a third of its cobalt production over the next three years to Chinese battery recycler GEM Co Ltd, according to a filing by GEM on Wednesday. Glencore will sell 52,800 tonnes of cobalt hydroxide to GEM between 2018 and 2020 as demand for cobalt, a critical metal in lithium-ion batteries, soars on a forecasted boom in electric vehicle sales. According to the filing, GEM and its subsidiaries will purchase 13,800 tonnes of cobalt hydroxide from Glencore in 2018. They will buy 18,000 tonnes in 2019 and 21,000 tonnes in 2020."
Some news I missed in February 4-traders reported, "Katanga Mining: Announces ore reserves and mineral resources. The result of the December 31, 2017 ore reserve estimate is a net increase of 13.4 million tonnes of ore reserves since December 31, 2016, of which 6.0 million tonnes is attributable to optimization and design updates for KOV Open Pit and KTO Underground. In addition, 7.4 million tonnes of reserves were added from the KITD tailings."
You can also read my original article from Jan. 1, 2017, "Katanga Mining is a potential turnaround story." Followers of mine who bought back then with me at CAD 0.13 have made a nice 1,323% gain in 15 months.
On March 6 Mining Weekly reported, "Nornickel profit falls 16%, palladium now largest revenue contributor. Nornickel reported a net profit of $2.12-billion for 2017, compared with $2.53-billion in 2016, the company reported on Tuesday. Earnings before interest, taxes, depreciation, and amortisation (Ebitda) increased by 2% to $4-billion, with an Ebitda margin amounting to 44%, down from 47% in 2016. Revenue rose by 11% to $9.15-billion, of which metal sales accounted for $8.42-billion. Palladium was the largest contributor to total metal sales at 28%, or $2.35-billion, followed by nickel at 27%, or $2.30-billion, copper at 27%, or $2.28-billion and platinum at 7%, or $623-million. During 2017, Nornickel invested $2-billion on capital expenditure (CAPEX), which was a 17% increase on the previous year. The higher capex figure was as a result of the Bystrynksy copperproject, which was in its final construction stage, and the Bystrinsky concentrator, which was launched into hot commissioning at the end of 2017." Bystrynksy is forecast to produce "70 000 t of copper and 250 000 oz of gold per annum. " The report also stated: "At the end of December, Nornickel’s total debt amounted to $9.05-billion and its net debt/Ebitda ratio increased to 2.1 times at the end of 2017, from 1.2 times at the end of 2016."
On March 22 Highlands Pacific announced, "Highlands Pacific records K100m profit. Highlands Pacific Ltd has recorded a net profit of $37.4 million (K118.9 million) in the last financial year. Chief executive Craig Lennon said: “While many other companies are now aspiring to become producers of battery metals in the coming years, Ramu is already one of the largest producers of cobalt in the world. And it has a potential mine life of more than 30 years ahead of it. Ramu’s production went up by 55 per cent or 34,666 tonnes of nickel last year compared with the previous year. Cobalt production increased to 51 per cent or 3308 tonnes. "
Of interest 4-traders shows an analyst price target of AUD 0.21, representing 139% upside.
Possible mid-term producers (by ~2020) eCobalt Solutions [TSX:ECS] (OTCQX:OTCQX:ECSIF)
On March 12 eCobalt Solutions announced, "eCobalt announces appointment of Process Manager. Mr. Stacey will be responsible for leading all mineral processing and metallurgical activities for the Company’s Idaho Cobalt Project."
Investors can read the latest company presentation here.
No news for the month; however a new video with CEO Robin Goad can be viewed here.
Investors can read the latest company presentation here.
Upcoming catalysts include:
Early 2018 - Updated feasibility study capital and operating costs
2018 - Possible off-take or equity partners; project financing
RNC Minerals [TSX:RNX] (OTCQX:RNKLF)(formerly Royal Nickel Corporation)
On March 1 RNC Minerals announced, "RNC Minerals advances value enhancement initiatives for Dumont Nickel-Cobalt Project. CRU has been engaged to complete a value-in-use and market value analysis of the nickel-cobalt concentrate expected to be produced by the Dumont Nickel-Cobalt Project."
On March 22 RNC Minerals announced, "RNC Minerals sharpens focus on advancing Dumont Nickel-Cobalt Project; Launches strategic alternatives process for the Beta Hunt mine. "RNC has made the decision that its central strategic focus going forward will be the advancement of the Dumont Nickel-Cobalt Project. With this shift in our focus, Beta Hunt is considered to be non-core to RNC," said Mark Selby, President and CEO of RNC Minerals."
Investors can view the company presentations here, or my CEO Mark Selby interview on Trend Investing here.
On March 9 Clean TeQ announced, "Successful completion of A$150m underwritten placement. Proceeds raised via the Placement will be used to fund early works and long lead items to accelerate the development of the Company’s 100% owned Clean TeQ Sunrise Nickel/Cobalt/Scandium Project."
Clean TeQ has 132kt contained cobalt at their Sunrise project.
On March 7 Australia Mines announced: "High-priority bedrock conductors detected at Thackaringa, NSW. Helicopter-borne electromagnetic survey detects a cluster of geophysical anomalies with in Australian Mines’ Thackaringa Project. Results of ground-based geophysical survey and surface sampling program expected by May 2018." Best to read all of this link as it looks very promising.
On March 22 Australia Mines announced, "Australian Mines trading on American OTCQB market." The ticker is "AMSLF".
Investors can read my recent article here, my CEO interview here, or view the latest company presentation here.
On March 14 Ardea Resources announced: "Resource update at KNP Cobalt Zone delivers over 100 million tonnes. An updated KNP Cobalt Zone resource has increased markedly to 108.3Mt at 0.10% cobalt and 0.79% nickel. Includes over 108,000 tonnes of contained cobalt metal and over 856,000 tonnes of nickel metal. Shallow, lateritic, cobalt-nickel mineralisation is up to 16 km long and 1 km wide. PFS finalisation progressing." The above refers to their high grade zone.
In total Ardea has 405kt of contained cobalt and 5.46mt of contained nickel at their KNP project.
Investors can view their latest company presentation here, and my interview with Managing Director Dr Matt Painter on Trend Investing here.
Below is some good charts below from the latest Ardea presentation.
On March 19 Cobalt Blue announced: "Thackaringa – Significant mineral resource upgrade. The global Mineral Resource estimate now comprises 72Mt at 852ppm cobalt (Co), 9.3% sulphur (NYSE:S) & 10% iron (Fe) for 61Kt contained cobalt (at a 500ppm cobalt cut-off) – compared to the June 2017 Mineral Resource estimate (detailed in ASX release of 5 June 2017) the upgrade reflects a 31% increase in total tonnes and a 23% increase in contained cobalt. "
On March 23 Cobalt Blue announced, "COB – LG strategic partnership announced. Cobalt Blue is proud to announce a strategic First Mover partnership with LG International (NYSE:LGI), the resources investment arm of LG Corporation, acting in cooperation with LG Chem. Under the First Mover partnership LG will provide capital and technical assistance for Cobalt Blue to make a high purity battery grade cobalt sulphate. Cobalt Blue has executed a binding term sheet with LGI to raise gross proceeds of US$6.0m with the transaction to be completed by Monday 16 April 2018."
Trend Investing subscribers would have been able to buy Cobalt Blue when I wrote about them back in November 2017 at AUD 0.23, making a nice 500% gain in 5 months. My interview with CEO Joe Kaderavek is on Trend Investing here.
Upcoming catalysts include:
End February/early March, 2018 - An upgraded resource estimate.
Aeon Metals 100% own their Walford Creek copper-cobalt project in Queensland Australia. The 2012 JORC stated Indicated and Inferred Resources of 73Mt at 1.43% Cu equivalent containing: 296,000t of copper, 60,000t of cobalt, 623,000t of zinc, 626,000t of lead, 55moz of silver.
No significant new for the month, except the half yearly financial report which you can view here.
Investors can view a recent Bell Potter broker report here, with a price target of AUD 0.48 (~100% upside), and the latest company presentation here.
Upcoming catalysts include:
2018 - Further drilling and drill results, further upgrades to the resource.
Aeon Metals - Australian Cobalt miners compared - Walford Creek (sulphide ore) project (shown by the red dots)
GME Resources own the NiWest Nickel-Cobalt Project located adjacent to Glencore’s Murrin Murrin Nickel operations in the North Eastern Goldfields of Western Australia. The NiWest Project which has a total resource (0.8% Ni cut-off): 81Mt at 1.03% Ni and 0.06% Co (~75% in M&I categories) for an estimated 830,000 tonnes of nickel metal and 52,000 tonnes of cobalt.
No news for the month.
Investors can read the latest activities report here, or an excellent investor presentation here.
Cassini's flagship is the West Musgrave Project hosting over 1.0 million tonnes of contained nickel and 2.0 million tonnes of contained copper in Resource. The company has a buy in JV with Oz Minerals [ASX:OZL] (OTCPK:OZMLF) for West Musgrave. The company also has several other promising projects.
No news except the half yearly financial report which you can view here.
Investors can read the latest company presentation here.
Nzuri 85% own the Kalongwe copper-cobalt project in the Kolwezi region of the Democratic Republic of Congo [DRC]. The Kalongwe resource is a near surface oxide resource of 302,000t contained copper at an average grade of 2.72% copper, that also includes 42,000t contained Cobalt (at an average 0.62% grade). In late 2017 China’s Huayou Cobalt invested US$10m in Nzuri Copper buying a 14.8% stake.
No significant news for the month, except the half year report which you can read here.
On March 14 First Cobalt announced, "First Cobalt announces friendly acquisition of US Cobalt. All of the US Cobalt issued and outstanding common shares will be exchanged on the basis of 1.5 First Cobalt common shares for each US Cobalt common share issued and outstanding."
On March 22 First Cobalt announced, "First Cobalt files 43-101 technical report on Cobalt Camp properties."
Investors can view the company presentations here.
On March 16 Kin Communications reported, "Bankers Cobalt makes near-surface high grade copper and cobalt discovery at Kabolela. Stephen Barley, President and CEO of Bankers states, “We are very excited by the preliminary results from our very first drill program on the previously unexplored Kabolela concession indicating high-grade copper and cobalt in Kabolela North (see attached concession map). In terms of grade and depth, these results appear to be in line with producing mines in the region and follow the regional pattern of high-grade copper with pockets of cobalt. There are producing copper cobalt operations on the east and west side of Kabolela. Kabolela is favorably positioned to benefit Bankers’ shareholders from a new copper cobalt discovery in the DRC. We look forward to further defining the structure and potential size of this high-grade system.”
Investors can view the company presentations here, or my CEO Stephen Barley interview on Trend Investing here.
Celsius Resources [ASX:CLA] [GR:FX8]
Celsius owns 100% of Opuwo Cobalt Pty Ltd, which in turn holds the right to earn up to 76% of the Opuwo Cobalt (sulphide) Project in Namibia. Mineralisation has already been intersected over a 15 km zone in the initial Celsius drilling program. The company has over 100 km of potentially mineralised strike.
On March 5 Mining Weekly reported, "Celsius aims to bring Namibia's first cobalt mine to production by 2020."
On March 13 Celsius announced, "Cobalt Mineral Resource modelling well advanced at Opuwo."
Australian cobalt miners compared by cobalt equivalent grade and contained metal
Australian cobalt projects listed by resource size including grade
(Source: Ardea Resources)
NB: Additional to the above, Aeon Metals has 60kt of contained cobalt at their Walford Creek project, and Australian Mines has 54.5kt of contained cobalt at their Sconi project. Cobalt Blue now has 61kt of contained cobalt.
Cobalt27 Capital Corp. [TSXV:KBLT] [GR:27O][LN:OUPZ] (OTC:CBLLF)
Cobalt27 are a listed investment company that offers unique exposure to a portfolio of cobalt assets - cobalt metal, cobalt royalties and direct cobalt properties. Cobalt27 owns 2,982.9 tonnes of cobalt.
On February 22 Cobalt27 announced, "Cobalt 27 acquires royalty on Dumont, a world class, construction ready Nickel Cobalt Project in Canada. Cobalt27 has acquired a 1.75% Net Smelter Return (“NSR”) royalty on all future production over all metals from the Dumont Nickel-Cobalt Project (the “Dumont Project”), which contains the world's largest undeveloped, permitted, and construction-ready reserves of nickel and cobalt, located in the geopolitically secure and mining-friendly Abitibi region of the Canadian province of Québec. The Dumont Project is a long-life nickel and cobalt project with an initial 33-year life of mine, over 1 billion tonnes of reserves, and the potential for significant future expansion, up to an additional 30 years, from equally large nickel and cobalt resources. The NSR has a 60 year term plus an automatic 60 year renewal."
On March 9 Cobalt27 announced, "Cobalt 27 completes $200 million strategic private placement offering. The Company issued 17,556,828 Common Shares at a price of $11.40 per Common Share for aggregate gross proceeds to the Company of $200,147,842 (the “Offering”). Cobalt 27’s Chairman and CEO, Anthony Milewski commented, “As the Company continues to grow and develop, the completion of this capital raise is integral to the ability of the Company to fully exploit the current market opportunities to invest in cobalt streams and royalties. The offering places Cobalt 27 in an excellent position to deliver growth and solidifies the Company’s position as the leading pure-play cobalt investment vehicle.”The net proceeds of the Offering will be used by the Company to fund the acquisition of cobalt-related streams and royalties and general corporate purposes."
Take care
Mule
CLA Price at posting:
14.0¢ Sentiment: Buy Disclosure: Held
(20min delay)