WWW.RESOURCEGLOBALNETWORK.COM
BATTERY METALS | Cobalt 27 Capital Corp
COBALT 27
Resource Global Network
Pure play exposure to cobalt ahead of the EV market explosion
BATTERY METALS | Cobalt 27 Capital Corp
Cobalt 27 Capital Corp is the culmination of nearly three years of exhaustive market research and planning by a group of professionals specialising in various roles within the global mining and metals industry. The TSX-V-listed company was forged from a succession of discussions on different types of transformational disruptive technology and how they will ultimately impact basic materials. They looked at a range of technologies including semi-conductors and robotics but concluded that the energy and automobile industries are set to undergo a complete transformation, driven by advances in renewable energy, battery storage technology and the inbound electric vehicle revolution.
“What is probably most important is that it’s
These disruptive industries require a
Before looking at Cobalt 27’s asset base,
host of minerals and metals from lithium,
it is important to consider the current
graphite and cobalt in cathode and anode
sentiment and attitudes across the world
manufacturing, to copper and aluminium in
that are shaping these disruptive industries,
EV model production. This begs the following
particularly within the EV market.
a by-product of nickel and copper mining in approximately 98% of cases. That is interesting because as a by-product, cobalt on its own, doesn’t have the ability to form the supply side response. “However, SQM were recently able to announce that they will double global output of lithium in a single day, whereas with cobalt, you’d have to build a large, multibillion dollar copper or nickel mine, so it’s a very unique commodity in that respect.” After concluding that cobalt was the best material to back based on supply and demand fundamentals and projected demand growth from disruptive technology markets, such as electric vehicles and largescale energy storage systems, the hard work began for Cobalt 27. The board and management team, comprised of industry experts in mining, mine financing, cobalt and streaming and royalties, began to build the company’s asset base.
question to investors: Why cobalt? At the crux of the gradual shift towards “We found that cobalt was the most
electrification of the global vehicle fleet
interesting because of how critical it is to so
is a greater awareness of environmental
many types of existing batteries and future
degradation. According to the World Health
batteries,” says Cobalt 27’s chairman and
Organization, air pollution is the world largest
CEO, Anthony Milewski.
single environmental health risk, with up to
Resource Global Network
Anthony Milewski, chairman and CEO
BATTERY METALS | Cobalt 27 Capital Corp 80% of greenhouse gas emissions since the
breached in many developed markets,
1970s attributable to combustion engine
Milewski points to the recent explosion
vehicles.
in quarterly and year-on-year growth, an acceleration that not many people
However, the world has responded. The
anticipated just two years ago.
watershed Paris climate accord targets 100 million EVs across the global vehicle fleet
“In terms of Cobalt 27, we are really one of
by 2030, meanwhile governments have
the purist ways to invest in that adoption,
responded by banning the sale of gasoline
because it’s hard to say if Ford is going to be
and diesel engine vehicles, such as Norway
the winner, or if it will be Tesla, or GM.
and Netherlands by 2025, and the UK and France by 2040.
“Certainly there is going to be a winner in that EV race, and if you believe there is
Today, the global EV fleet remains relatively
going to be a winner then it is cobalt,
small, with three million cars on the road
because cobalt is in every single battery
worldwide. But, the targets loom large over
cell that’s used in automobiles.”
the sector and, as technological advances continue to drive costs down, the tipping point shuffles ever closer.
Pure play cobalt exposure Cobalt 27’s asset base
“When we investigated disruptive technology, includes 2,982 tonnes of what we arrived at was the significance
physical cobalt, valued
of two factors: 1) Cost and 2) Utility,” says
at approximately
Milewski. “If you look at the EV, you are now
C$323 million, which
reaching cost parity with a like-for-like gas
is securely stored
vehicle and I think secondly, on the utility
at LME-certified
side, what’s interesting now is that range
warehouses
exceeds the majority of commuter distances. in Baltimore, Antwerp and “Range was one of the significant concerns and that has kind of gone away now. The second part of utility is the ease of recharging. If you go and look at the Tesla website what you will find is you can drive to any place in the US and can charge along the way.” Now that these two barriers have been
Amsterdam.
Resource Global Network
BATTERY METALS | Cobalt 27 Capital Corp
Resource Global Network The company’s strategy also incorporates the
the geopolitically secure and mining-friendly
management of cobalt streams and royalties,
Abitibi region in the Canadian province of
which involve purchase agreements with
Québec.
nickel and copper mining companies who extract cobalt as a by-product metal. The
“The current royalties we have right now are
company’s physical cobalt position, combined
largely options,” reveals Milewski. “We are
with its plan to acquire a portfolio of cobalt
currently focused on producing assets and
streaming and royalty assets, is expected to
this gives shareholders leverage to the cobalt
provide shareholders with diversified asset
price.
exposure, free cash flow, and additional future avenues for growth, within a pure play cobalt investment vehicle.
“We are not operators and we do not intend to become a mining company. Instead we are really focused on giving people leverage
Cobalt 27 also holds royalties on seven exploration-stage projects prospective for cobalt and in
to cobalt and leveraging the EV story as opposed to running a mining company which is a very different business.
February 2018, acquired a 1.75% Net Smelter Return royalty on all future production over all metals from the Dumont Nickel-Cobalt Project, which contains
“Going forward, the growth of the company will really be coming from streaming and royalty transactions. That’s how we are going to get the scale and size that we want to achieve.”
the world’s largest undeveloped, permitted, and constructionready reserves of nickel and cobalt, and is
The decision to build its asset portfolio on physical cobalt and mining streams and royalties, has resulted in the company evolving into one of the best pure play cobalt investment vehicles on the TSX-V, and this has been recognised by investors globally.
located in In June 2017, Cobalt 27 completed the single largest IPO on the TSX and TSX-V since 2012, raising C$200 million in equity financing and signalling to Canadian and international capital markets the beginning of a large and fast-growing battery metals upcycle.
BATTERY METALS | Cobalt 27 Capital Corp
The company raised a total of C$300
reports of exploitative and conflict-driven
million in equity financing in 2017 and
mining practises, many of which originate in
acquired the world’s second largest above
the Democratic Republic of Congo, home to
ground inventory of refined cobalt after the
over 60% of global cobalt supply.
government of China’s strategic stockpile. Plus, on March 9, 2018, Cobalt 27 closed a
So, how does Cobalt 27 ensure all its physical
C$200 million private placement offering
holdings and the cobalt from its streams and
conducted by a syndicate of agents co-led
royalties are ethically sourced?
by Credit Suisse and TD Securities, with proceeds to be used by the company to fund
“First and foremost, we are not operating,
the acquisition of further cobalt streams and
transacting or doing business in DRC. There
royalties.
are companies that do that, and if you do it
Cobalt and conflict mining
ethically then there are no problems. I think Glencore does a tremendous job there, but that’s not really our business model.
In recent years the global cobalt supply chain has come into disrepute after numerous
“For us, we buy branded cobalt from outside
Australian Resource Business Global Network
DRC, whether that is Norilsk, Vale or Sherrit,
“This is a once-in-a-lifetime change in two
there are any number of brands globally
of the biggest industries in the world and
that are outside of DRC. If you buy metal in
there are a variety of ways to play it, but I
Canada, you know that there are no conflict
believe that cobalt is one of the purest forms
issues there,� explains Milewski.
of playing the adoption of the EV. If people share that view of the global adoption of the
Today, the world is hovering on the cusp
EV than this is a really unique opportunity
of a significant energy transformation.
and time to invest.�
Electrification of the global vehicle fleet will have untold effects on basic materials, and Cobalt 27 offers direct leverage to one of the most vital metals powering the EV revolution, with limited exposure to capital risks.
aj
152
Published by Anderson Murray Media Ltd
To tell the resource market your story, contact: editorial@resourceglobalnetwork.com
WWW.RESOURCEGLOBALNETWORK.COM