Sunday, July 9, 2017

Added Cobalt 27 Capital Corp. (KBLT.V) as a speculation on cobalt demand

I talked about Cobalt 27 in a previous post. With the explosion in demand for lithium batteries I think that the fact that cobalt plays a big part in some of the various battery chemistrys is a big opportunity. Because most cobalt production is a by-product of copper and nickel mining it is difficult to find a pure play way to ride this bull market in cobalt.

Cobalt price per pound
The price of cobalt is slowly but surely marching higher. My expectation is that this trend will continue. As I have indicated in the past, a good portion of the cobalt supply comes from the DRC. Congo is not the most stable place as evidenced by its recent history.

 In fact the Banro Gold's operations in the eastern portion of the DRC recently had to be evacuated due to militant violence in the area of its operation.

Any long term conflict in the DRC could have a detrimental effect on the supply of cobalt. In addition, many countries are imposing rules on manufacturers that they can only source cobalt from conflict free areas which could limit the potential supply. .

The attributes that attract me to Cobalt 27 is the fact that they are going to hold a large amount of physical cobalt as an asset. They will also provide streaming contracts to cobalt miners and developers.

This is where the streaming company pays an upfront amount of money for a future steam of production usually at a reduced price.

Cobalt 27 has Justin Cochrane, former executive at Sandstorm Gold, on board as President and COO. Sandstorm is of course a big gold streaming company. I suspect he will be able to apply what he learned in gold streaming to the cobalt market.

This is a speculation as the success of this is based on a continued rise in the cobalt price and the ability of Cobalt 27 to successfully execute its business plan. No guarantees on either of those two events occurring.

1 comment:

The Tourist said...
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