eCobalt represents the only near term, cobalt deposit in North America
eCobalt Solutions Inc. (TSX:ECS | OTCQB: ECSIF), formally known as Formation Metals Inc. represents a unique opportunity for investors wanting exposure to the cobalt market. The company owns the Idaho Cobalt Project (ICP) and as the name suggests, the project is located in the USA. Why is this significant?
ICP represents the sole, advanced stage, near term primary cobalt deposit in the United States. At present the majority of cobalt is supplied from the Democratic Republic of Congo (DRC), which is responsible for roughly 69,500 tonnes of cobalt per annum out of a total 108,600 tonnes.
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As more attention is being directed to sustainable and responsible supply chain management, there has been an effort over recent years on eradicating a group of metals known as “conflict minerals.” These generally are defined as gold, tungsten and tin containing minerals originating from the DRC and adjacent countries.
Although cobalt is mined in the Katanga province in the DRC and is quite distinct from the war-torn provinces of Eastern Congo and South Kivu regions which by and large are responsible for conflict mineral supply, as the bulk of cobalt originates from the DRC, the metal has been associated with these conflict minerals and this has created some supply uncertainty. This uncertainty in the United States in particular was further exacerbated when in March, Obama amended a bill that prohibited the import of key raw materials from African and selected countries as part of an effort to stamp out child labour. Cobalt (heterogenite) ore was on that list (click for more information).
In June this year, eCobalt commissioned a feasibility study from SNC-Lavalin and Micon International, the results of which are expected by June 2017. Expecting a positive feasibility study, the company is considering its capital financing, including sourcing potential offtakes.
The Company has overcome a number of milestones over the last year including the completion of its Preliminary Economic Assessment (PEA) in May 2015, the completion of benchmark metallurgical tests and the successful oversubscribed private placement which raised C$4.4m which has enabled eCobalt to move forward with the commissioning of its bankable feasibility study in June this year. As such we believe that the company is well placed to become the first dedicated cobalt producer in the United States.
eCobalt trades on the TSX and its share price has risen to $0.59 this month from $0.13 a year ago, indicative of management’s consistent delivery of its goals.
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>