News | November 20, 2017

The Electric Vehicle Revolution Will Send This Super Metal Soaring

New York /PRNewswire/ - After running a poor second to the internal combustion automobile for a century, the electric vehicle (EV) now looks very likely to win the race. At the beginning of the twentieth century, EVs were on track but they lost position to gasoline automobiles. Now in America, in China and in Europe, EVs are taking to the roads once again. And in response to a more environmentally aware citizenry and government mandates, many car manufacturers plan to phase out fossil-fueled vehicles and increase output of EVs over the next two decades. The increasing adoption of EVs is already beginning to raise demand for the metals that comprise the batteries under their hoods. Chief of these is lithium, naturally, since lithium-ion is the leading EV battery technology. However, equally necessary, is the cobalt used in lithium cobalt oxide (LiCoO2) electrodes, one of the most common lithium ion (Li-ion) technologies. As search for this rare metal intensifies, cobalt miners like Quantum Cobalt Corp. (CSE: QBOT) (FRA: 23B) (QBOT Profile), eCobalt Solutions (OTC: ECSIF) (TSX: ECS), First Cobalt Corporation (OTCQB: FTSSF) (TSX-V: FCC), Fortune Minerals Limited (OTC: FTMDF) (TSX: FT) and Freeport-McMoRan (NYSE: FCX) are likely to see their share prices rise. In the coming months, cobalt looks set to make fortunes.

One of the factors driving the shift to EVs has been the Paris Climate Accord, an international effort to slow global warming by reducing carbon emissions, which became effective on November 4, 2016. The U.N. Intergovernmental Panel on Climate Change (IPCC) has estimated that transportation is responsible for fourteen percent (14 percent) of global greenhouse gas emissions (http://nnw.fm/4G0m7). On November 7, Syria announced it would sign the agreement, following Nicaragua, which said in October it would join the Accord (http://nnw.fm/S0uWY). The Central American nation had, initially, refused to sign because it wanted the Agreement to go further. This leaves the U.S. as the only country rejecting the pact. However, under its terms, which the White House said it will respect, the soonest any country can withdraw from the landmark agreement is November 4, 2020.

The Accord has prompted a series of initiatives across the globe. Recently, China, France, Germany, India, Norway, the Netherlands and the U.K. all announced measures intended to curb carbon emissions. China, which has the world's largest vehicle market, is in the lead. With air pollution at crisis levels in Beijing and other major cities, the Chinese government wants to see vehicles using gasoline and diesel phased out. It also, it seems, plans to dominate the global EV market, according to the LA Times (http://nnw.fm/sWsE3). The government in India is facing similar problems. India'scarbon emissions are rising: they rose almost 5 percent in 2016. But now there's hope that trend will be reversed by replacing fossil fuel cars with EVs by 2030. European nations are also in the vanguard of this battle against global warming. The Norwegian government has said, that after 2025, it will only allow sales of vehicles that are 100 percent electric. And Germany is following suit, albeit with a less rigorous schedule. It plans a total ban on all internal combustion engines by 2030. In Britain, a deadline has been set for 2040, after which time no cars powered by petrol (gasoline) or diesel will be allowed. The Netherlands is also considering similar plans, while France, the host of the Accord, wants all petrol and diesel cars off its roads by 2040.

The big car manufacturers are already making plans to ramp up EV production. Volkswagen, now the largest global automaker by sales, is planning 30 new EV models by 2025. It hopes to garner annual sales of between two and three million units by then. The company has announced it will invest around $84 billion in batteries and electric cars. In addition, No. 2 Toyota has formed a joint venture with Mazda and Denso, the Japanese auto parts manufacturer, to develop EV technologies for the future. The new company, called EV Common Architecture Spirit Co. Ltd., will be 90 percent owned by Toyota, with Mazda and Denso sharing the remaining 10 percent equally. The joint venture will produce models based on Toyota's Prius and 2018 Camry. And Mary Barra, CEO of General Motors, told an investor conference on November 15 that the company plans to launch a new EV platform in 2021 (http://nnw.fm/XP8zF). The modular EV stereotype will be the basis for at least 20 new battery-powered vehicles by 2023 and will be flexible enough to accommodate nine different body styles in multiple sizes, segments and brands in the U.S., China and elsewhere. Meanwhile in July, when Tesla delivered the first Model 3s off the line, its CEO Elon Musk revealed the company had 'over half a million advance reservations'. The EV revolution seems unstoppable.

Bloomberg has estimated (http://nnw.fm/M3iGb) that EVs will enjoy a 2 percent share of the auto market by 2020. This is expected to rise to 8 percent by 2025, to 20 percent by 2030, and to at least 35 percent by 2040. These statistics have fueled a great deal of anxiety in some corners, with automakers scrambling to secure supplies. They have also given rise to a very tight global cobalt market. Recently, Volkswagen announced it had failed to secure a long-term supplier for cobalt. In September, the German carmaker put out a tender seeking a five-year supply of the strategic metal at a fixed price but there were no takers at the offer price. Demand for cobalt is expected to surge from 2k tonnes in 2017 to over 300k tonnes by 2030, a stupendous 14,900 percent increase that will see prices reach record levels. With the battery industry currently uses 42 percent of global cobalt production, the question arises: where is all this cobalt going to come from?

At present, about 97 percent of the world's supply of cobalt is a by-product of nickel or copper mining, mostly out of Africa. A lot comes from the Democratic Republic of the Congo (DRC), home to the largest cobalt asset in the world, the Tenke Fungurume mine. However, political instability and charges that child labor is used in the mines is putting pressure on producers to seek less controversial sources. As a result, exploration companies are turning to North America, and particularly Canada, in what must seem like déjà vu, particularly in places like Cobalt, Ontario, so named over a century ago after the mineral was discovered there.

One such exploration outfit is Quantum Cobalt Corp. (CSE: QBOT) (FRA: 23B), which has interests in past producing mines with historic assays of 8.76 percent cobalt. Its Nipissing Lorrain Cobalt Project has produced over 16,500 tons of cobalt, as well as 5,500 tons of silver, in the past. The asset consists of 29 claim units covering approximately 464 hectares. Quantum is also working the Rabbit Cobalt property, located 14 km southeast of the town of Temagami near the eastern border of Ontario. The property has in the past produced cobalt assayed at 8.76 percent. A third project is the Kahuna Cobalt-Silver mine, which comprises 77 claims over an area of around 1,200 hectares, and is located 37 km south of Cobalt. These are encouraging metrics considering that cobalt projects with assays as low as 0.05 percent are considered viable. Quantum also has gold projects underway at Grew Creek in the Yukon, Canada and Musgrove Creekin Lemhi County, Idaho.

Driven by an experienced team, Quantum Cobalt expects more than quantum success. The company's CEO is Greg Burns, who is also the Director of Mergers and Acquisitions for Capital Investment Partners, a Western Australian investment bank. Mr. Burns was previously Managing Director of Xenolith, subsequently Coalspur Mines Ltd., acquired by the Cline Group in 2015. He was also a director of White Canyon Uranium before that company's acquisition by Denison Mines in 2010. The rest of Board Members include Ken Tollstam, CPA, formerly of Deloitte Touche, Jerry Huang, CPA, MBA, who has worked in wealth management and in mining, Von Torres, who brings experience in corporate management services, and Quinn Field-Dyte, who comes with a financial services background. Quantum Cobalt was previously Bravura Ventures Corporation. Its name change became effective in November 2017.

eCobalt Solutions (OTCQB: ECSIF) (TSX: ECS) has its primary asset in Idaho. The company claims its Idaho Cobalt Project is the only advanced-stage, near term, environmentally permitted, primary cobalt deposit in the United States. The Idaho Cobalt Project is comprised of the Mine/Mill (M/M) site located in Lemhi County, Idaho, near the town of Salmon, Idaho and the Cobalt Production Facility (CPF), a stand-alone hydrometallurgical facility located in Southern Idaho near the city of Blackfoot. The CPF will process concentrates from the M/M into cobalt, copper and gold end products. The project is slated to produce the equivalent of 1,500 tons of high purity cobalt sulfate annually over a projected mine life of 12.5 years.

Back in Canada, First Cobalt Corporation (OTCQB: FTSSF) (TSX-V: FCC) is currently advancing its 2,100-hectare Silver Centre, Ontario property, which includes the former producing Keely-Frontier mine, a high-grade mine that has produced over 3.3 million pounds of cobalt and 19.1 million ounces of silver. First Cobalt, which pulled out of the DRC just months after signing a copper and cobalt deal with the government, has past-producing assets and a market capitalization of CAD$39 million, expected to reach CAD$156 million pending an acquisition.

Meanwhile, Fortune Minerals Limited (OTCQX: FTMDF) (TSX: FT) is ploughing ahead with its NICO Cobalt-Gold-Bismuth-Copper Project in Canada's Northwest Territories, which the company is positioning as a dedicated North American cobalt asset. Freeport-McMoRan (NYSE: FCX) is also in hot pursuit of the hard, lustrous, silver-gray metal. Together with Lundin Mining Corporation and La Générale des Carrières et des Mines (Gécamines), it has formed Freeport Cobalt, which will operate the world's largest cobalt refinery, located in Kokkola, Finland. This will link its global sales and marketing distribution network with output from the Tenke Fungurume Mine in the Democratic Republic of Congo(DRC).

The attention cobalt is enjoying at present is pushing up share prices. eCobalt (ECSIF) trading at around $0.40 a year ago has appreciated by over 100 percent and is now at $0.84. First Cobalt (FCC), down at $0.25 a year ago has gone up by 180 percent and currently trades at $0.70. Fortune Minerals (FTMDF) has risen by 67 percent over the past twelve months, from $0.09 to $0.15. It seems like Quantum Cobalt, may be undervalued.Quantum Cobalt is "One to Watch"

Other players to keep your eye on:

  • Freeport-McMoRan (NYSE: FCX) traded 15,328,018 shares and closed at $ 13.86 on Friday.
  • eCobalt Solutions (OTCQB: ECSIF) traded 166,456 shares and closed at $ 0.83 on Friday.
  • First Cobalt Corporation (CVE: FCC) traded 169,405 shares and closed at $ 0.72 on Friday.
  • Fortune Minerals Limited (OTCQX: FTMDF) traded 401,789 shares and closed at $ 0.15 on Friday.

For more information about the Quantum Cobalt please visit: Quantum Cobalt (CSE: QBOT)

Other Quantum Cobalt Articles: Quantum Cobalt is "One to Watch"

Cobalt Perfectly Positioned As Global Cobalt Demand Surges

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