In Search Of The World’s Next Big Cobalt Producer

With cobalt universally regarded as “the next big thing” in energy metals, investors everywhere are looking to capitalize on the next big cobalt producing company.
The record shows that First Cobalt Corp (FCC.V, FTSSF.OTCQB:) may be it.
The good news: While this stock has already begun to take off, the story seems to be just beginning.

Dear John,

Investors on the hunt for the next big play in cobalt are increasingly agreeing that First Cobalt Corp (FCC.V; FTSSF.OTCQB) is just what they’re looking for.

There’s no doubt that First Cobalt has had a great 2017 so far, with a parade of positive news from its Greater Cobalt Project in Ontario, Canada.

For one thing, its upcoming merger with Cobalt One and CobaltTech will see the company control over 10,000 hectares of prospective land and no less than 50 historic mining operations...plus a mill and a permitted refinery facility.

And the market has certainly taken notice of the company, with its stock price more than doubling so far this year. But while 2017 may have been great for the company, it pales in comparison to what it could achieve in the weeks just ahead.

Five Reasons Why
First Cobalt Corp
Will Continue To Rise

Reason #1: Early Drill Results Are Highly Promising

The big question for First Cobalt was whether or not economically viable cobalt deposits remained in the area around its main Keeley-Frontier mine.
Well, the company just released early results from its 9,000-meter maiden drill program...and they were extremely promising.
Reporting results from eight out of 61 holes drilled so far, covering over 6,200 meters of the 9,000-meter program, First Cobalt noted that one hole returned 0.83% cobalt and 30 g/t silver over 0.5 meters. This was located north of the Frontier mine, an area previously believed to be barren.
This means there’s a good possibility of an extension of the Woods-Watson vein system, the main vein responsible for most of the mine’s historical production.
The strong potential of a high-grade mineralized system beyond the historically mined veins is a huge positive for the company. In fact, a grade of 0.83% is hgher than most of the cobalt mines found in the Congo, the world’s largest cobalt producer.
As First Cobalt continues to expand its drill program throughout 2018 and report results, there is no doubt that the market will be watching. More positive news will provide increasing upside pressure.

Reason #2: High-Grade Cobalt In Recent Sampling

Muck pile sampling from the project’s Silver Banner Mine has returned cobalt grades as high as 1.14%. All in, five samples showed a significant presence of cobalt. This could mean the presence of a productive vein system in the underexplored mafic volcanic rocks, similar to that seen in the Keeley-Frontier mine.
This makes the Silver Banner Mine a prime target for further drilling work, which will be conducted throughout 2018. Right now, the Silver Banner Mine is owned by Cobalt Tech, but upon completion of the merger, it will belong to the expanded First Cobalt. The mine only had a short production history, likely from a cobalt-rich but silver-poor vein system.
While this was bad for the previous miners, it is good news for First Cobalt. The existence of further cobalt-rich veins in previously overlooked areas of the Cobalt Camp further boosts the potential of the company.
That’s why drilling here will be closely watched.

Reason #3: Bob Cross Has Stepped Up His Position in the Company

Mining legend Bob Cross is a huge shareholder of First Cobalt and was recently appointed to its Board of Directors. For those not in the know about Bob, he was the co-founder and chairman of Bankers Petroleum and B2Gold.
During his tenure, he oversaw a rise in both their share prices of over 1,000%. As chairman of Northern Resources, he took the company’s market cap from a mere $20 million to $1.4 billion in less than five years.
With a track record such as his, intelligent investors follow Bob’s moves very keenly. And when Bob shows his commitment to a company by becoming one of its board members, they pay close attention.

Reason #4: Demand for Cobalt Is Only Expected to Increase

Cobalt is a huge component of lithium-ion batteries, the kind found in your laptop, smartphone and electric vehicle. But while laptops and smartphones only require a few grams of cobalt, electric vehicle batteries use on average 10-15 kilos of the metal!
So with the electric vehicle revolution upon us, it’s no wonder why automakers are very concerned about the availability of the metal moving forward.
Demand for electric vehicle batteries have already sent cobalt prices through the roof, doubling since the beginning of the year.

Volkswagen, the world’s largest automaker, recently tried to lock in five- to 10-year supply agreements with producers, who were understandably disagreeable. This (failed) attempt was a smart move by Volkswagen, after all Bloomberg New Energy Finance estimates that 54% of new vehicle sales will be electric by 2030. And it sees the demand for cobalt to power these vehicles rising by an exponential rate — almost 30-fold!

Reason #5: North American Cobalt Resources Will Be Even More Valuable

At the moment, as much as 65% of the world’s cobalt supply comes from one country, the Democratic Republic of the Congo. All of the largest producers have mines over there. But as you can imagine, conditions over there are terrible, and Congolese miners endure some of the worst conditions on earth.
UNICEF estimates that as many as 40,000 children work as artisanal miners — “freelance” miners that have no safety equipment and mostly use handmade tools). Adult miners get on average $2 to $3 a day, and fatal accidents, which frequently go unreported, are common. You can read this in-depth investigative piece if you want to know more.
But the bottom line is, cobalt from the DRC is highly problematic. Right now, companies have no choice but to use cobalt sourced from there. But if other alternatives were more viable, companies would look elsewhere. Tesla already leads the pack, committing to only source cobalt from North America for its Gigafactory.
Tesla is the first, but you can be sure that as electric vehicles become more popular and the public becomes aware of the dire conditions in the Congo, there will be increasing pressure to source metal elsewhere. And cobalt producers in countries that guarantee proper and safe conditions for miners, such as Canada, will be even more valuable.

First Cobalt’s Bull Run
Is Only The Beginning

As an investor, you might take a look at First Cobalt’s stock price after its astounding bull run and conclude that the big money has been made.
But that would be a mistake. First Cobalt’s 2017 bull run was no fluke. The market conditions that led to such a run in the first place will not only continue to persist, but make it even more likely that 2018 and onwards will be even better for First Cobalt.
Mainstream business publications are already talking about First Cobalt. Click on the link below to check out Bloomberg’s piece on how the electric vehicle revolution and the demand for cobalt is bringing life back to a sleepy Canadian town.

Read The Bloomberg Feature Here