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Monday, July 24, 2017 Derek Macpherson

RCKS Drilling Deeper Lunch; Cobalt: A Battery Metal


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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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All values in USD unless otherwise noted

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Red Cloud Klondike Strike Inc. is registered as an Exempt Market Dealer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, 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 or securities of the same class on the market or otherwise. Additionally, Red Cloud KS may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.
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 own investigations and take their own professional advice before investment. Red Cloud KS will not treat recipients of this publication as customers or clients by virtue of having viewed this report.

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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7) A member of Red Cloud KS team or a member’s household serves as a Director or Officer or Advisory Board Member of the subject issuer.

 

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