Weathered resource investors know how hard commodity headwinds can blow, whether it is economic downturns slowing demand, or flurries of new projects coming online to create a glut of supply. In boom times, though, disruptive technology shifts can create sharp spikes in demand that generate new opportunities for investors. In 2016, that was what happened to lithium– Tesla announced a Nevada Gigafactory, which combined with sky rocketing global demand for lithium-ion batteries to spark huge capital flows into exploration plays- with a big emphasis on North American sources. While Lithium is available throughout the Americas, proximity to Tesla’s Nevada base created a subset of exploration companies in a domestic land rush. 2016 saw juniors like Lithium X (TSXV:LIX) and Pure Energy (TSXV:PE) enjoy soaring valuations, and Nemaska Lithium (T.NMX) became one of the most highly traded stocks on the TSX, with a market cap of over $450 Million.
Cobalt is another critical component of Lithium-ion batteries, and it is easy to draw parallels between cobalt’s supply chain and the rise of lithium. Lightweight and efficient lithium–ion batteries keep our smartphones, laptops, and electric cars humming, and demand for cobalt is stretching supply. Similar to lithium, North America is a net importer of cobalt, with a whopping 60% of the world’s cobalt supply coming from the Democratic Republic of the Congo, a nation wracked by political uncertainty and problematic economic landscape. Just like lithium, increased demand from U.S. companies for cobalt is sure to encourage new domestic cobalt supply.
While this isn’t news to investors already following the commodity, on September 30 the Washington Post released footage and an investigative article that exposes the supply chain for Congo cobalt production. According to Todd Frankel, author of “The cobalt pipeline: From dangerous tunnels in Congo to consumers’ mobile tech”, “ The world’s soaring demand for cobalt is at times met by workers, including children, who labour in harsh and dangerous conditions. An estimated 100,000 cobalt miners in Congo use hand tools to dig hundreds of feet underground, with little oversight and few safety measures..” As part of the investigation, Frankel interviewed Apple, LG Chem, and Samsung, who all cited concerns over their Congo supply chain, and promised increased scrutiny. Ford and GM went as far as stating that they no longer use Congo sourced cobalt in any of their battery production.
With 60% of the current supply already creating issues for the world’s largest battery manufacturers, there is speculation of an even greater need for domestic supply, and the cobalt buzz is growing.
Finore Mining (C.FIN) is one North American junior that is working to be a first mover on domestic cobalt development, announcing acquisition of 100% interest in the Panther Creek Cobalt property, in East-Central Idaho.
The company reports that the property is located within the famous Blackbird District, in the heart of the Idaho cobalt belt, which is home to the Salmon Canyon and Iron Creek Deposits. It is road accessible and located 26 miles west of the Salmon in Lemhi County, and consists of 50 lode mining claims with a total area of 1000 acres. As part of the earn-in agreement, the Finore has agreed to fund and incur exploration expenditures of at least $375,000 within the first three years.
In order to fund development of the site, Finore has also announced that it will conduct a non-brokered private placement of up to 20,000,000 units at a price of $0.10 per Unit to raise total gross proceeds of up to $2,000,000, including a half warrant at an exercise price of $.15 per share. The net proceeds from the Offering will be used for the option payments and first year work program on the Panther Creek Property, general working capital, clearing outstanding payables and for evaluating other green metal properties.
The shift to “green metal” comes with a full corporate rebrand as well- management plans to apply to regulatory authorities for a name change from Finore Mining to Hybrid Minerals Corp.
When asked for comment on their recent announcements, Mohan R. Vulimiri, M.Sc., Principal Geologist for Finore Mining, responded “The rise of the electric vehicle and energy storage will most likely result in enormous new demand for cobalt. Our acquisition of the Panther Creek Property in the Idaho Cobalt Belt and name change to Hybrid Minerals Corp, confirms our commitment to focus on energy metals in the coming year. We are planning an aggressive exploration program at Panther Creek in the coming months and will provide updates as we get results."
Background on the Idaho cobalt belt
The Idaho cobalt belt trends northwest-southeast for nearly 60 km in east-central Idaho (Fig. 1). Included within this belt are numerous historic mines and prospects of the centrally located Blackbird district, the Salmon Canyon deposit at the northwest end, and deposits of the Iron Creek area at the southeast end (U.S. Geological Survey, 2010). The Idaho cobalt belt is important nationally because it contains the largest known cobalt resources in the United States (Slack et al., 2012). Ecobalt Solutions Inc. is developing the Idaho Cobalt Project, located in the Blackbird district. Ecobalt completed a Preliminary Economic Assessment with a measured and indicated resource of 3.48 million tonnes grading 0.55% Co and 0.85% Cu.
The location of the Idaho Cobalt Belt with the historic mines and occurrences is shown in the figures below.
Map of central Idaho showing location of mineral deposits (modified, Lund, et al, 2011. Econ Geol. v.106) Dot overlay shows location of Idaho cobalt belt. Index map is (upper right) shows location of Late Cretaceous Idaho batholith relative to area of this figure. Numbers refer to important named mines and prospects: 1 = Yellowjacket mine, 2 = Salmon Canyon copper mine, 3 = more than 40 deposits of the Blackbird district including the Panther Creek property, 4 = Musgrove prospect, 5 = Blackpine mine, 6 = Iron Creek prospect, 7 = Spring Creek deposits, 8 = Shoup area mines, 9 = Pine Creek mines, 10 = Diamond Creek mines, 11 = Copper King mine, 12 = Pope Shenon mine, 13 = Woods Creek deposit, 14 = McConn Creek deposit, 15 = Ulysses mine, 16 = Lemhi Pass thorite mines and prospects, 17 = Copper Queen Mine
FULL DISCLOSURE: Finore Mining is a paid client of Stockhouse Publishing