Green Swan strikes cobalt (and gold!)
Green Swan Capital Corp.(TSXV: GSW) is a Canadian mining company operating in the world-renowned Sudbury Basin in Ontario. Green Swan is well-poised to deliver real value to shareholders as it completes its first exploration program involving surface samples, clearing and a 300 metre diamond drill program where it observed visible gold. Management has been here before.
The Sudbury Basin is the second oldest known impact craters on Earth, containing resulting metal deposits that made the Sudbury area one of the world’s largest suppliers of nickel and copper, alongside which cobalt is commonly produced. Roughly 53% of the world’s supply of cobalt comes from nickel and copper mining in Africa, an area of rapidly decreasing appeal over stability concerns arising from conflict and child labour issues.
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The cobalt market entered a period of oversupply in late 2009 which has continued to keep prices low; however, the cobalt supply/demand balance is expected to move into deficit territory in 2016. 49% of demand is driven by rechargeable batteries, used primarily in electric vehicles, portable tools, and portable electronic devices, and growing 11.7% y.o.y. Developments in Africa are likely leading to a decreased production from DRC as Amnesty International leads a global campaign for an ethical and regulated supply chain on cobalt. The exploration of Green Swan’s flagship primary cobalt mining project shows astounding cobalt numbers with strong gold & nickel presence in politically stable northern Ontario. Green Swan is well-placed to take advantage of the growing demand for ethically-sourced North-American cobalt; The Tesla Model 3 is set to require roughly 7.5 million kilograms of cobalt alone for the Nevada gigafactory site.
Focusing in the south end around the area known as Ed’s Watering Hole, Green Swan just completed a five-hole diamond drill project, assay results are expected mid-December, after which the company expects to receive a grant under the JEAP program, in an amount to be determined. Green Swan announced strong assay results on September 26, revealing new mineralised quartz veins, of which two had visible cobaltite and up to 0.183% cobalt along with up to 25.5 g/t gold. The November results published on the 7th, included a sample of over 44g/t gold. Green Swan expanded the known area of mineralisation, and undertook that summer work program to gather data and prepare for November’s drilling project, which was completed on schedule and on budget.
Green Swan management theorises that mineralised quartz veins up to 1.2 metres in width occur over a ten to twenty-meter-wide pinch and swell zone extending discontinuously up to fifty metres from Ed’s Watering Hole northward. The diamond drill program was designed to further test this theory and visible gold was reported from hole one at 48.2m within a 4cm quartz-carbonate vein on November 28th. Ed’s Watering Hole features in the south zone of Green Swan’s wider Copper Prince site, a block of sixteen contiguous mining claims over two hundred and sixty hectares and its primary asset and focus.
According to Green Swan’s CEO, Peter Clausi, “The high consistent surface cobalt levels are one thing that make the property special. The other, is that the gold and cobalt are on patented lands, immediately next door to Glencore’s Sudbury smelter operations. While the usual path is to complete a NI 43-101 report and then a Feasibility Study, Green Swan’s results are strong enough it may go directly to a simple bulk sample to be processed immediately next door Glencore. There is no need for a smelter, concentrator, tailing pond, or any of the other multimillion dollars capital projects. All Green Swan might need is an improved road, some dynamite, a backhoe and a dumptruck!”
The United Nations projects that Earth will have over eight-billion human residents by 2030, about five-billion of which will live in urban areas. With the great consequences of petrol-based vehicles already visible in our most dense cities, it is imperative that we transition to a cleaner engine solution swiftly. Cobalt, and companies like Green Swan along with it, are essential to a seemingly inevitable future in which urbanisation and lithium-ion battery requirements continue to grow.
Lara has been an analyst for over ten years, starting her career as an equity analyst at Foord Asset Management and more recently as the ... <Read more about Lara Smith>