- Cobalt may be ready for huge run up
- 75% of Li-ion batteries will contain cobalt by 2020
- First Cobalt positioned as a global cobalt resource company
When presented with a serious market imbalance, savvy investors often look tangentially at the impacts of the imbalance to achieve outsized capital gains. In a severe gasoline shortage, an investor may take positions in electric vehicle manufacturers knowing that long gasoline will be a crowded trade and that gasoline shortages will ripple through the market till it affects EV makers. A similar case can now be made for cobalt. Even though cobalt has risen over the last year, it may hold greater returns than lithium. Most investors are keenly aware of the vast impending shortages anticipated for lithium. In expectation of the imminent imbalance in the lithium markets, smart money has poured into lithium stocks, driving up prices to record highs, with many gaining well over 100% in the last year.
Almost as important for lithium-ion batteries, cobalt hasn’t appreciated at the same pace. It’s projected that 75 percent of lithium-ion batteries will contain cobalt by 2020 (http://nnw.fm/K8M9u). Demand is predicted to sky-rocket because of cobalt’s unique properties that allow electric cars to greatly extend range between charges. Already widely used for super-alloys in turbines, space vehicles, rocket engines and power plants, the importance of cobalt is underscored by the U.S. Defense Logistics Agency’s designation of lithium cobalt oxide and lithium nickel cobalt aluminum oxide compounds as strategic for national interests. As a result, the agency has been stockpiling cobalt since 2014.
First Cobalt Corp. (TSX.V: FCC) (OTCQB: FTSSF) is rapidly assembling one of the largest pure-play cobalt portfolios in the world. The company holds interests in key mineral rights in a region that boasts historic production of 50 million pounds of cobalt and 600 million ounces of silver mined over a 60-year period. Cobalt is produced as a by-product of mining other metals like nickel, copper or, in this case, silver. First Cobalt’s location is easily accessible and has excellent infrastructure nearby. First Cobalt holds one of only four fully-permitted cobalt extraction refineries in Canada and, given deals in play, the company is likely to soon control over 10,000 hectares of prospective land and 50 historic mining operations in Canada.
Currently, the global cobalt market is largely dependent on the Democratic Republic of Congo. With a long history of political instability and violence, the Democratic Republic of Congo accounted for more than half the world’s production in 2016. Extremely concerned about secure and steady supply chains, cobalt end users, especially EV makers, are looking for safe, stable cobalt resources. This factor, combined with impending supply and demand imbalances, could easily drive more attention toward First Cobalt. Savvy investors looking for outsized capital appreciation should take note of the cobalt market.
For more information, visit the company’s website at www.FirstCobalt.com
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