CBLT’s early Canadian cobalt investments put it at front of pack
Cobalt’s price spike in 2017 led to a pile of investments into old mining tenements around the town of Cobalt in Canada’s Ontario province. They are looking in the wrong place, says mining entrepreneur Peter Clausi, President, CEO and Director of CBLT Inc. (TSXV: CBLT).
Clausi has just returned from Melbourne after signing an exploration deal with Sydney-traded Winmar Resources for three exploration properties he holds in the Gowganda area 85 kilometers west of Cobalt. His trip to Australia helped him drum up interest in two other cobalt-rich concessions he holds in the area, with deals ensuing for the first half of this year.
“The silver and the cobalt around the town of Cobalt, we don’t think there’s anything left in them. They are drilling mud-piles,” Clausi said of the exploration frenzy. “Out here in Gowganda, we have a different theory.”
Gowganda is also an old mining area like Cobalt, which experienced a silver mining boom a century ago that ran out in the 1980s. Investors are interested in this remote area of Ontario to serve surging demand for cobalt metal in car and mobile phone batteries. The area still yields small but dense veins of cobalt that are difficult to find in other parts of the world, Clausi said.
About two thirds of the world’s cobalt in mined in the Democratic Republic of Congo (DRC), where producers have been accused of environmental damage and employing minors. What’s more, parliamentarians in the landlocked African country voted in favor of a sharp and unexpected rise in mining royalties that could derail investments in new cobalt projects.
Most of the world’s cobalt supply comes as by-product from copper mines. Ivanhoe Mines Ltd., which has a fabled track record of major discoveries from Voisey’s Bay in Newfoundland to the Oyu Tolgoi copper mine in Mongolia, is developing the massive Komoa-Kakula copper-cobalt project in the DRC.
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Clausi guessed interest would spike in smaller yet richer cobalt-rich geologies in safer countries as demand rises for lithium-ion batteries. He bought properties in Gowganda in 2016, just before an investor frenzy in cobalt projects. Demand for the metal surged from 64,000 tons in 2010 to 95,000 tons in 2015 due to the proliferation of lithium batteries. The market will expand again to 124,000 tons of yearly demand in 2020, driven by electronics, Clausi predicts.
Cobalt prices remained strong despite the sell-off in global markets in early February, buttressed with the supply scare news from the DRC. Cobalt prices were trading at over $80,000 a ton ($36.28/lb) on the London Metal Exchange as of Feb. 5.
CBLT has so far outsmarted the market. Clausi, at the same time as buying up his Canadian properties, correctly predicted prices would surge to about $35 a pound from $24 a pound at InvestorIntel’s 7th Annual Technology Metals Summit in May.
Winmar agreed to buy a CBLT claim to a mining property at Bloom Lake in the Gowganda area and a right to buy into two other properties. Clausi, who is currently acting as interim CEO of CBLT, expects another Australian company to bid for two other properties that the company holds in the area.
CBLT will now focus on delineating cobalt discoveries that it has at other properties. The company has identified multiple targets at its Chilton project in Saint-Jovite, Quebec showing Co-Ni-Cu mineralization in rock samples from linear anomalies. And using proceeds from the sale to Winmar, CBLT acquired the Mactrack gold and cobalt claim in Sudbury, Ontario, which shows early promise.
“You can make as much money with your pen as you can with the drill-bit,” Clausi said.
Matt Craze has covered commodity markets for more than 20 years, working as a research at CRU International, and for over 10 years as a ... <Read more about Matt Craze>