Last week, Red Cloud Klondike Strike Inc. (RCKS) in partnership with Stormcrow Capital hosted another installment of our Drilling Deeper Lunch series,
this time featuring three companies focused in the cobalt exploration, development and royalty/holding company space. Dr. Jon Hykawy co-founder of
Stormcrow opened the event discussing the cobalt market and other key battery metals, followed by presentations from Cobalt 27 Capital Corp. (TSXV:KBLT),
First Cobalt Corp. (TSXV:FCC) and eCobalt Solutions Inc. (TSX:ECS).
Dr. Jon Hykawy began with reviewing essential battery materials and their role in the growing electric vehicle and battery market. As the demand for lithium-ion
batteries grows, not only does the demand for lithium grow, but also, it’s other key components, graphite and cobalt. Unlike lithium and graphite,
there is limited supply of cobalt in today’s market, and by 2025 all known production is expected to be consumed by the battery market alone. Cobalt’s
high-value use and energy storage make it a critical component in batteries. In order to keep up with growing demand, production must materially grow
over the coming years. It is anticipated that cobalt prices will continue to benefit from the booming market.
Cobalt 27 Capital Corp. (TSXV:KBLT)
is a pure-play cobalt company which currently has royalties on 8
exploration stage properties and ~2,100 tonnes of physical cobalt valued at ~C$180 million. After completing an ~C$200 million initial public offering
in June of this year, the company is well-funded and remains focused on adding value through meaningful royalty and streaming transactions, expecting
to announce two transactions over the next six months.
eCobalt Solutions Inc. (TSX:ECS)
owns the fully permitted Idaho Cobalt Project
(ICP) in Idaho, U.S. A feasibility study is underway and although delayed, is expected to progress under the supervision of a strengthened management
team, with the recent addition of a COO (Q3 2017). The project’s Ram deposit comprises only 7% of the company’s total land position which remains open
at depth and along strike, highlighting the project’s significant exploration upside. Initial production is to begin 12-16 months after construction
starts (planned for Q3 2018). The company is well-financed, and the completion of the feasibility study is the next key milestone which should benefit
from higher cobalt prices.
First Cobalt Corp. (TSXV:FCC)
is a cobalt focused exploration and development company, currently
in the midst of two separate mergers with Cobalt One Limited (ASX:CO1) and Cobalt Tech Mining Inc. (TSXV:CSK), both of which are expected to be completed
by the end of October. The proforma company will own ~45% of the land in the historic Cobalt mining camp in Ontario, with a ~C$160 million pro-forma
market capitalization. The company is expected to become one the largest exploration/development stage mining companies focused on cobalt. The company
is planning to begin near-mine drilling in Q3/Q4 2017 for Keeley-Frontier, Silverfields and Kerr-Lawson, followed by additional exploration drilling
in early 2018. The company also owns seven properties in the DRC.
Derek Macpherson | VP Mining Analysis
Victoria Ellis Hayes | Associate
Red Cloud Klondike Strike Inc.
105 King Street East, 2nd Floor
Toronto ON, M5C 1G6
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Nova Scotia, Prince Edward Island, Newfoundland & Labrador, and the Yukon. Part of Red Cloud Klondike Strike Inc.'s business is to connect mining
companies with suitable investors that qualify under available regulatory exemptions (the "Red Cloud KS Business"). Red Cloud Klondike
Strike Inc., its affiliates and associates, and their respective officers, directors, representatives, researchers and members of their families (collectively,
"Red Cloud KS") may hold positions in the companies mentioned in this publication and may buy or sell, or buy and sell their securities
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Red Cloud KS has prepared this publication for general information purposes only, NOT as part of the Red Cloud KS Business. This
document should not be considered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided
by Red Cloud KS for the purposes of this publication has been derived from sources believed to be accurate, but cannot be guaranteed. Opinions or analysis
contained in this publication may be subject to change and Red Cloud KS does not undertake to advise the reader of such changes. This publication does
NOT take into account the particular investment objectives, financial situations, or needs of individual recipients and other
issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons. Recipients should rely on their
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Company Specific Disclosure Details
Cobalt 27 Capital Corp. - TSXV:KBLT - None
First Cobalt Corp. - TSXV:FCC - None
eCobalt Solutions Inc. - TSX:ECS - 1,2
Cobalt One Limited - ASX:CO1 - None
Cobalt Tech Mining Inc. - TSXV:CSK - None
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