How a junior exploration company built a ditch
(Kitco News) – An asset that “came along for the ride” in a transaction is now a major economic divide for a metal battery junior.
First Cobalt CEO Trent Mell spoke to Kitco last week from the company’s Ontario refinery.
Popularized by Warren Buffett, economic moats are any factor that gives a business a competitive advantage, a position that competitors find difficult to attack.
First cobalt (TSX.V: FCC) claims that it has the only licensed cobalt refinery in North America capable of producing battery materials. It is currently configured to refine cobalt, but other battery metals will soon be recoverable in the facility.
Prior to acquiring the facility, First Cobalt was advancing cobalt projects. The company is advancing its Iron Creek project in Idaho, which has inferred mineral resources of 26.9 million tonnes grading 0.11% cobalt equivalent. He resumed drilling on the property in September.
For the refinery, Mell said the total capital infrastructure is nearly $ 200 million. Permits are difficult to obtain.
“Something like that – five years, eight years, hard to say. So we have the first-mover advantage. We’re going to be producing in 14 months,†Mell said.
When the company started five years ago, the company was focused on cobalt projects that could break China and the Democratic Republic of the Congo’s supply strangulation.
“Initially, the world needed cobalt. The world needed cobalt which was the former DRC, the former China. And so this refinery came as part of a three-way merger that brought together the ‘historic Canadian Cobalt Camp,’ Mell said, referring to the old producing mines on Ontario’s border with Quebec. Later, First Cobalt took over the Idaho asset. A drop in the price of cobalt, however, made drilling too expensive.
First, Cobalt saw a better opportunity to move the refinery forward “… when we recognized that the supply chain is pointing to China and America is looking for alternatives.”
“And here we are sitting with a refinery. It became our main asset almost by accident. We came in initially as explorers, and now we have a chemical division that is going to bring some value.”
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