- Demand for cobalt forecast to grow in 2019 and the year beyond, increasing the price of the natural resource
- DRC is currently the world’s largest cobalt producer, but political turmoil and ethical considerations are providing excellent opportunities for alternative cobalt producers like First Cobalt
- 2018 was a successful year for First Cobalt, with Iron Creek Cobalt Project prospecting far exceeding initial expectations
The forecast for cobalt in the coming few years is a positive one, with demand set to grow and prices expected to increase 30 percent by mid-2019, according to analysts. The cobalt price reached near decades high in March 2018, but then dropped for a few months and is now expected to reach $70,000 per tonne by the middle of 2019 and $80,000 per tonne by 2020, as noted by a Capital Economics report (http://nnw.fm/i8hNN). The increase in both demand and pricing will most likely benefit alternative cobalt producers such as North American pure-play cobalt company First Cobalt Corp. (TSX.V: FCC) (OTCQX: FTSSF) (ASX: FCC).
Geopolitical events and economic developments will likely contribute to the eventual hike. The Democratic Republic of the Congo (DRC) currently produces over 60 percent of the world’s cobalt. The country is dealing with an Ebola outbreak, as well as a chaotic election. Depending on the outcome of the elections, the country could enforce a new law that raises costs for all mineral producers and imposes a 10 percent royalty on cobalt exports (http://nnw.fm/Ai3Hs).
Awareness about ethical issues surrounding cobalt production in the DRC is increasing, which is yet another factor contributing to a market shift.
These trends are expected to have a positive effect on the work of First Cobalt Corp. As the demand for cobalt is set to increase exponentially, the company is continuing work on its flagship asset – the Iron Creek Cobalt Project in Idaho.
First Cobalt recently reported high grade mineralization intercepts at the Iron Creek Project. The mineralization extends to the eastern portion of the current resource area (http://nnw.fm/a2WHh). Drilling at Iron Creek was ongoing throughout 2018 with a primary aim of extending the mineralization zone from 500 to over 1,500 meters.
The project has already been classified as an advanced, unique asset. In terms of cobalt projects, it is quickly shaping up as one of the most crucial opportunities in North America. Through further development and the exploration of domestic sources of the metal, countries on the continent are expected to become much less dependent on foreign imports marked by serious volatility.
First Cobalt’s Iron Creek Project has inferred mineral resources of 26.9 million tonnes grading 0.11 percent cobalt equivalent.
According to an official statement on the First Cobalt website, the company’s vision “is to become the largest primary cobalt producer outside the DRC and the most attractive cobalt stock on the market.” The statement also suggests that the First Cobalt strategy is “to explore, develop and refine material in North America for sale back into the American battery market.”
An updated resource estimate for the Iron Creek Cobalt Project in Idaho is expected in early 2019. First Cobalt executives are also negotiating with third party investors who could minimize or eliminate altogether equity dilution for the purpose of potentially restarting the company’s refinery within 18 months. First Cobalt’s refinery in eastern Canada is the only permitted cobalt extraction refinery in North America that can produce battery grade material.
For more information, visit the company’s website at http://nnw.fm/FTSSF
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