#3 Tight Supply for Best-Performing Metal of the Year
The global cobalt market is already facing tight supply, and analysts see no release through 2021, when the supply gap is expected to reach 12,000 tons, according to Research and Markets.
It's a contradiction that is set to keep cobalt prices swelling this year and beyond.
Future supply is uncertain, at best. Some 60% of the world's cobalt is source from the DRC, where it's mined by children under inhuman conditions.
Buyers are under massive pressure to look elsewhere because it's mined by children under inhumane conditions.
Ask Apple Inc. The tech giant recently announced it would stop buying unethical DRC cobalt for its iPhones-so it's looking for new suppliers.
It gets worse: Some 98% of the world's ethical cobalt is produced as a byproduct of copper and nickel mining. This means that cobalt supply is dependent on copper and nickel mining, and if they aren't worth it, we have no cobalt.
With this tight supply situation, even without the DRC uncertainty, prices are poised to continue their upward momentum.
One of these emerging cobalt players is Quantum Cobalt (QBOT ; BRVVF) …
#4 Demand is Understated
Even with this clear contradictory supply and demand picture, many believe that demand remains understated.
For investors, though, it's hard to get in on the cobalt game. Purchasing shares of miners is tricky because the big miners only dabble in cobalt as a byproduct of copper and nickel, so exposure is skewed and diluted. And copper and nickel prices aren't great performers right now.
As Wealth Research Group noted recently, in looking for positions in the sector, without any ETFs for futures exchanges, investors looked at exploration stocks for exposure, and could only find 24 cobalt-related stocks on North American exchanges. Worse, while the 60 lithium stocks they found were primarily focused on lithium, 19 of the 24 cobalt-related stocks were really focused on copper, nickel, gold or silver.
China alone is a huge factor in the supply/demand equation, and what many investors don't know is that this goes far beyond EVs.
China's has introduced a new 5-Year Plan to push for up to 15% of power to come from non-fossil fuels-that will be another huge push for electric, and another huge consumer of cobalt, even beyond Beijing's recent plan to ban all fossil fuel cars.
Even Tesla's success in the area of energy storage takes us far beyond this cobalt supply equation for EVs.
This isn't just an electric car story-it's an energy revolution story, and right now, the most critical metal is cobalt.
Both China and the US view cobalt as a metal of strategic importance. The hoarding has already begun.
#5 Three Cobalt Plays, Made in North America
In Canada, all the talk is about Cobalt, Ontario. Cobalt was instrumental during the industrial revolution and it is now becoming superhot again, and Canada is sure it will lead the country into the next industrial revolution.
But it's not just Canadian talk. Everyone wants cobalt, but as Quartz notes, "few want to get tangled up in the world's largest producing nation"-the Democratic Republic of Congo.
So, they're heading to Canada, and specifically to Cobalt, Ontario, the site of a historical silver rush. That was a century ago, and everyone forgot about it when Africa started emerging as a metals bonanza. But now they're back in droves. Africa is too hot to handle.
"The whole situation is a cobalt-style rush, just like an old fashioned staking rush," said Gino Chitaroni, president of the Northern Prospectors Association and a geologist from the area, told Canada's CBC.
And right in the heart of Ontario's cobalt belt, Quantum Cobalt ( QBOT ; BRVVF ) has the Nipissing Lorrain Cobalt Project, which has in the past produced over 1,650 tons of the critical metal.
According to the company, the cobalt mineralization here is striking. Past production of five tonnes of material was reported to be an unusually high grade of 22% cobalt. That's impressive when you consider that most projects are deemed valuable with as little as 0.05% cobalt, says CEO Greg Burns. (its 14.75% on Nipising property)
And that's just one project in this massive cobalt belt. The company has already launched exploration to identify targets in two other projects in the heart of this cobalt belt: Rabbit and Kahuna. (Kahuna project has 22 percent showings)
The Rabbit project is just 55 kilometers north of Ontario's prolific Cobalt district, with historic work returning an assay of 8.76% cobalt.
The Kahuna Cobalt-Silver property, covering 77 claims over 1,200 hectares, has also seen mineralization of cobalt discovered in past work.
The company has mobilized field crews to carry out first-pass exploration on both of these properties, and we expect rapid news flow on prospecting, geologic mapping, geochemical mapping, geochemical surveying and sampling to locate and delineate mineralized structures.
Nearby, First Cobalt Corp.-which pulled out of the DRC to expand in safer Canada, has past-producing assets and a market capitalization of CAD$39 million, which is expected to reach CAD$156 million pending an acquisition transaction. It all suggests that Quantum Cobalt, with its three cobalt projects at ground zero--may be undervalued.
The past production on these properties suggests that Quantum Cobalt has significant exploration and development potential, and it could be coming into this game right at the edge of the cobalt cliff. And it's got the team to back it up.
Jerry Huwang, a Quantum Cobalt director, is an instrumental player in Energold Drilling Corp., a leading drilling solutions company servicing the mining and energy sectors in the Americas, Africa and Asia. With experience from Energold, which is internationally recognized for its social and environmental approach to drilling and operating 270 rigs in 24 countries worldwide, Jerry bring a wealth of knowledge and expertise in exploration and drilling.
CEO Greg Burns, Director of Mergers and Acquisitions at Capital Investment Partners-a multi-billion-dollar fund out of Australia-has lead multiple large-scale deals, including the development of Coalspur Mines into a billion-dollar market cap company at one point.