June 26, 2017

BMR Morning Market Musings…

Gold has traded between $1,256 and strong support at $1,236 so far today…as of 11:15 am Pacific, bullion is down $12 an ounce at $1,245…Silver has declined 11 cents to $16.58…Copper is flat at $2.62..Nickel has slipped 3 pennies to $4.08…Crude Oil has rallied another 21 cents to $43.25 while the U.S. Dollar Index is relatively unchanged at 97.21 after a weaker than expected durable goods report…

Somebody sold Gold by mistake this morning?…that’s what some traders are saying after prices suddenly plunged overnight before quickly stabilizing…the sale of 18,500 lots of Gold, totaling 1.85 million ounces, and 5,000 ounces of Silver in 5,500 lots on Comex in a short space of time was behind falling prices, according to Afshin Nabavi, head of trading at MKS in Switzerland…

“Clearly somebody sold it by mistake and bought it back quickly, triggering stops below $1,250,” said another MKS trader, Bernard Sin. “Fundamentally, there is still a lot of uncertainty in the world, with Italian bank bailouts, Trump’s policies and Brexit. The world is in geopolitical chaos and Gold is still good insurance.”

This is encouraging to see if you’re a contrarian – large speculators exited from Gold and Silver futures during the several days after the last meeting of the Federal Open Market Committee, based on the latest weekly positioning data from the Commodity Futures Trading Commission…Friday’s “disaggregated” report shows that the Gold net-long position of money managers tumbled by 33% to 99,376 futures contracts from 147,496 the week before…

Crude Oil Update

A surge in demand for short sale contracts suggests that investors see potential for a further price fall in Crude Oil…however, that also sets up the possibility for some sudden short-covering…

After 5 straight weekly declines, WTIC has landed at strong support around $43…John’s 3-month chart shows that the intense bearish trend has started to weaken, so a rebound in prices is likely on the way…whether that’ll just be temporary remains to be seen…RSI(14) is up from previous support and will should soon overcome a downtrend line in place for more than a month…

The latest data from Oil services firm Baker Hughes showed U.S. shale producers added 11 more rigs, marking the 23rd weekly rise and the longest streak of increases in decades…

OPEC’s adherence to quotas has thus far been impressive but the impact of that has been offset by virtually uninterrupted gains in shale production and increases within other non-OPEC regions, slowing the anticipated contraction in the U.S. Crude supply surplus against the averages…overall, analysts are still expecting global stocks to decrease during Q3 as refineries come back online…

Northern Ontario Cobalt Rush

Summer is now upon us but it’s starting to feel like January again in the Cobalt market with the price of the metal breaking out to new highs ($26.54 U.S.) not seen in nearly a decade while several stocks are in the midst of major developments…

Trent Mell’s First Cobalt (FCC, TSX-V), halted since pre-market Friday, has suddenly turned very aggressive in the northern Ontario Cobalt-Silver Camp, poised to acquire 2 other juniors, which makes us wonder if they’ve received some bullish preliminary information from initial geophysics, mapping and sampling carried out at their Keeley-Frontier mine…keep in mind, FCC also recently increased its land position in the Camp by 40% to 3,000 hectares…

Take note of these comments from Dr. Frank Santaguida, VP-exploration for First Cobalt, in the company’s June 5 news release following completion of a borehole geophysics and televiewer program:

“The completion of this phase of our exploration program at Keeley-Frontier is essential to our strategy to unlock the Cobalt potential in this camp,” Santaguida stated. “These results placed into the context of the ongoing structural mapping program will provide the foundation for planning the drill program this summer, as it will help predict the location of previously unknown vein sets. I am very pleased with the hard work of the field team and we are looking forward to completing the interpretation of the geophysical data in the coming weeks.”

In its June 14 news release, First Cobalt stated that “outcrops south of Keeley No. 3 shaft show intensely chloritized and veined mafic volcanic rocks. Cobalt found here would represent metal dispersion away from the Woods vein, improving the potential for bulk mining in this area.”

First Cobalt, which raised $6 million at 50 cents in February, sees major new possibilities for this historic Camp. “A rebirth of this historic mining district will occur through the application of modern geoscience, a better understanding of disseminated Cobalt mineralization and ultimately bulk mining methods,” stated CEO Mell…

Last Wednesday, Mell pulled the trigger on 2 friendly potential takeovers, announcing an LOI with CobalTech Mining (CSK, TSX-V) to acquire all the outstanding shares of CSK which has developed a strong presence around the town of Cobalt, while also proposing a “merger” with Australian-listed Cobalt One (CO1, ASX)…

The proposed combined entity, operated by First Cobalt, would hold a large land position in the northern Ontario Cobalt-Silver Camp, multiple past producing mines, and assets that hold potential for Cobalt processing and refining…together, the 3 companies have a market cap in excess of $100 million…

News just hit the wire regarding details of the FCC takeover of CSK…CobalTech shareholders will receive 0.2632 of a First Cobalt common share for each CobalTech share…this represents the equivalent of 20 cents per CobalTech share, so CSK will push higher from its Thursday 14-cent close as soon as trading resumes at 11:45 am Pacific…how FCC trades of course will also impact CSK…

Cobalt Camp Media Coverage Heats Up

The resurgence of the northern Ontario Cobalt-Silver district is a great story for the media to digs its teeth into, so we expect much more on that front over the summer.

On Friday, the news leader in North Bay ran 2 separate stories, one of them highlighting Castle Silver Resources (CSR, TSX-V) which in our view represents extraordinary value in the mid-20’s given the company’s current success at the Castle mine, its proprietary Re-2OX process for optimal recovery of Cobalt and other metals from ore in the region as well as Lithium-ion batteries, and its past producing Beaver mine near the town of Cobalt…

North Bay Poised To Profit From Cobalt Mining

Cobalt Camp Is Ready To Roll

“King of Cobalt” – Part 2!

A couple of weeks ago we introduced to BMR readers Gino Chitaroni, a key player in the northern Ontario Cobalt-Silver Camp featured in one of the articles linked above…Chitaroni, President of the Northern Prospectors Association as well as Polymet Labs, is a lifelong resident of Cobalt, a respected entrepreneur, prospector and geologist (he has a brother, now a police officer, who also starred for Italy’s Olympic hockey team for many years)…

Chitaroni sees enormous potential for new discoveries in the region given a lack of exploration over the last half century throughout much of the district…sustained higher Cobalt prices will attract investment dollars that will revolutionize this historic Camp…

Learn more by clicking on the arrow…

In today’s Morning Musings…

1. Two attractive Venture Gold stocks that should outperform…

2. Jaxon Minerals (JAX, TSX-V) strengthens its team…

3. Silver update – powerful Q3 in the works?…

4. Daniel’s Den – Daniel has extended his trip, DD returns Friday with much to report beginning next week!…

Did you know that for as little as just over $2 a day, you can be a BMR subscriber and tap into the best analysis and picks for the junior resource sector that you’ll find anywhere? Last year’s BMRTop 50 List returned a whopping 118% and we are delivering market-trouncing returns again in 2017. BMR was the first to call the new bull market in the Venture in early 2016, and our coverage of the commodities space gives you valuable daily insights into price movements and critical trends. BMR is daily information that puts you ahead of the crowd!

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Comments (30)

30 Comments

TUO has started drilling in the golden triangle. So where is GGI. Regotti are you there, hello, hello, hello, ah shoot nobody there.

Comment by dave — June 26, 2017 @ 11:49 am
Mr. Trent Mell of First Cobalt reports

COBALTTECH TO MERGE WITH FIRST COBALT

Following the non-binding letter of intent announced on June 21, 2017, First Cobalt Corp. and Cobaltech Mining Inc. subsequently signed a binding letter of intent on June 23, 2017, pursuant to which First Cobalt intends to acquire all of the issued and outstanding common shares of Cobaltech by way of a court-approved plan of arrangement.

Highlights: Creates a leading pure-play cobalt exploration company with a portfolio of high quality exploration assets, 14 former producing mines and a mill facility in the Cobalt, Ontario mining camp (the “Cobalt Camp”) Experienced management team based in Toronto, with a proven track record of discovery, development, and finance, and located in close proximity to the Cobalt Camp

Increased scale of the combined company will enhance its capital markets profile, liquidity, provide greater access to capital across the exchanges and provides for rerating potential

CobaltTech CEO Bruce Bragagnolo commented,

“First Cobalt has a strong vision for the future of this region and this transaction will be beneficial to both to CobalTech shareholders and the community. We are pleased to have come to financial terms with First Cobalt and look forward to finalizing this transaction.”

Trent Mell, First Cobalt President and CEO commented,

“We believe CobalTech’s assets at the north end of the Cobalt camp are complementary to our asset base at the south end of the camp, approximately 25 kilometres away. With an asset base consisting of 11 past-producing mines and a mill facility, CobalTech has assembled an excellent asset base in this historic mining district.”

Benefits to CobalTech Shareholders: Positions First Cobalt as a significant landholder in the north and south of the Cobalt Camp, consolidating a significant portion of the prospective properties in the camp, including 14 past-producing mines

Greater liquidity and prospect of market re-rating with enhanced scale, capital markets profile and increased access to capital

CobalTech will maintain a position in First Cobalt, allowing for upside participation as First Cobalt progresses with exploration programs

Terms of the Arrangement

Under the terms of the Arrangement, CobalTech will receive 0.2632 of a First Cobalt common share for each CobalTech common share (a “CobalTech Share”), representing the equivalent of $0.20 per CobalTech Share.

Completion of the Arrangement is subject to a number of conditions, including the entering into of definitive documentation, approval by the shareholders of CobalTech and receipt of all required regulatory approvals, including the approval of the TSXV. The Arrangement cannot close until these conditions are satisfied and the required approvals are obtained.

Advisors and Counsel

Canaccord Genuity Corp. is acting as financial advisor to First Cobalt, Cassels Brock and Blackwell LLP is acting as legal counsel to First Cobalt.

McMillan LLP is acting as legal counsel to CobalTech.

About First Cobalt

First Cobalt is focused on building a diversified global portfolio of assets that are highly leveraged to the cobalt market. The Company’s current assets include almost 3,000 hectares and three former mines in the Cobalt camp in Ontario, Canada. Cornerstone assets include an option for the former producing Keeley-Frontier mine, a high-grade mine that produced over 3.3 million pounds of cobalt and 19.1 million ounces of silver from 301,000 tonnes of ore, as well as a joint venture on a fully permitted cobalt refinery in Cobalt, Ontario. The Company also has interests in seven prospective copper-cobalt properties covering 190 square kilometres in the Democratic Republic of the Congo, all with known surface mineralization.

About CobalTech

CobalTech Mining Inc. is a North American cobalt company with assets in Ontario, Canada. The company owns the Duncan Kerr Property located outside of Cobalt, Ontario, in an area known for its geological setting responsible for unique mineralization composed of quartz-carbonate veins enriched in silver-cobalt-nickel-bismuth-arsenic. The company is committed to operating within the strict environmental, health, and safety framework governed by the e3 Plus regulation put forth by the Prospectors & Developers Association of Canada (PDAC).

Comment by Jon - BMR — June 26, 2017 @ 11:54 am
AGH.H is close to CSK and has doubled. CSR not moving.

Comment by dave — June 26, 2017 @ 11:59 am
FCC optioned Keeley-Frontier from AGH.H, Dave…that accounts for the price move.

Comment by Jon - BMR — June 26, 2017 @ 12:29 pm
You got me interested in Orex Exploration many years ago, they got bought out by Anaconda Mining. Wondering if you have any opiinions on it. Looks like Great Synergy to me.???

Comment by KD Dougan — June 26, 2017 @ 12:40 pm
Hey Jon, you seem sure that ggi will fly. What do you think is a fair value of the share price if they hit?

Comment by Kalkan — June 26, 2017 @ 4:14 pm
This is going to add some new chapters to the B.C. geological playbook, Kalkan…a discovery seemingly “out of the blue” that takes much of the broader market by total surprise would profoundly reset the GGI valuation, especially given the world class district…I don’t want to limit numbers at this particular point, but for starters look at the valuation EGM reached recently (and it’s still at $90 million) on its high-grade Copper discovery at Lac La Hache…think about this for a minute with regards to just the first drill hole at the E&L…it cuts through the known Ni-Cu-rich mineralized zone (guaranteed) and then continues into a previously undrilled strong conductor that almost certainly has to contain good sections of massive sulphides, plus disseminated sulphides that wouldn’t even be picked up on the VTEM…250-300 m barnburner hole right off the bat, into the magma highway…what do you think that would do to the GGI market?…coming to a theatre near you, very soon…

Comment by Jon - BMR — June 26, 2017 @ 4:56 pm
kalkan – voisey’s bay hit on second drill hole: a 33 metres of massive sulphides at 2.23% nickel, 1.47% copper 0.123 cobalt. Its share price exploded to $13.50/share after assays came in, up from $4.65 a month prior…..
Different context, environment, etc. now but likely going to be very difficult to properly value GGI if they hit (really believe WHEN they hit 🙂 ) initially because of the “out of the blue” nature described by Jon. Expect some real market madness …..

Comment by Foz1971 — June 26, 2017 @ 5:21 pm
Jon, that sounds promising. And they are about to drill soon right. How long after that could we get some initial results. In August/september

Comment by Kalkan — June 26, 2017 @ 6:00 pm
Good explanation on GGI’s valuation Jon. Kalkan, my only worry is that some GGI shareholders will “cash out” before the whole GGI story unfolds,and then kick themselves later. Just my opinion.

Comment by pole — June 26, 2017 @ 6:02 pm
Hope our dream comes true Jon. Having said that, how soon do you think the drill will be on top of nickel mountain?

Comment by Dan1 — June 26, 2017 @ 6:05 pm
BMR brought Supreme Metals (ABJ) and Power Americas (PAM) to our attention some months back for their acquisition of a couple of cobalt properties in Ontario. I would like to know if these 2 cheapies now trading near their yearly lows are a worth a look once again as action in Ontario cobalt stocks is heating up again. I don’t really care if the cobalt properties they acquired have much merit but am looking at ABJ and PAM as extremely oversold and due for a technical bounce in conjunction with a “rising cobalt tide will lift all cobalt stocks scenario.”
Would like to know what your thoughts are (is there a chance of a double here?) and if so would it be worth putting up a couple of charts for us?

John

Comment by John — June 26, 2017 @ 7:36 pm
With ground conditions rapidly improving, they’ll be moving quickly, Dan1, to make up for lost time from the slow spring melt…first order of business will be to ground truth these conductors up to 6 km from the historic mineralized zones, then it’s drill time into the guts of the known zones and the conductor that could represent even richer grades. I don’t doubt that the 1960’s drilling touched just the edge of the system and they had no clue on the geometry of this. Would be nice to get update from company before end of week, going into long weekend. First drill results during 2nd half of July?…a lot of investors and so-called experts will be left wondering how they missed this one…

Comment by Jon - BMR — June 26, 2017 @ 8:07 pm
Good point, John…it’s possible those could be situations (ABJ, PAM) to consider more seriously now, will have to do some double checking and will report back. They weren’t part of our official buy list back then but they may be plays that make more sense now at current levels given how things are developing in the district. Can’t say one way or the other at the moment, other than to offer a general caution about companies that try to tie on to area plays. This Camp separates the men from the boys in a hurry.

Comment by Jon - BMR — June 26, 2017 @ 8:17 pm
Thanks Jon.
Also out it is being reported that 3 CNN reporters/editors have resigned as a result of putting out a fake news story about Trump, a Trump associate and the Russians.
CNN has absolutely lost all credibility as a reliable news source. This is the final nail in the coffin.

Comment by John — June 27, 2017 @ 1:30 am
Does Ggi need helicopters to move in people and equipment each year after the snow melts? The terrain looks somewhat challenging.which could explain delays getting preliminary results.

Comment by Donald — June 27, 2017 @ 4:27 am
Castle Silver (CSR.V) kicks a hole in a stained glass window
Lukas KaneJune 26, 20170

In 1983, a newly-graduated metallurgical engineer named Frank Basa got a job working at the Castle Silver Mine in Ontario – then operated by Agnico Eagle (AEM.TSX). The mine was situated about 80 kilometers northwest of the historic Ontario Cobalt camp.

The young metallurgical engineer (Basa) is now the CEO of Castle Silver (CSR.V) which controls the old Castle Silver Mine. Cobalt is a critical ingredient in lithium-ion batteries. Prices have risen 500% since Basa first worked in the mine.

In the wake of child labour scandals in Africa – companies like General Motors (GM.NYSE), Apple (AAPL.NASDAQ), Toyota (TM.NYSE), and Ford (F.NYSE) – are desperately seeking North American supply lines.

The market believes that Basa is the key to unlocking value in this silver cobalt project.

Is “the market” always right? Absolutely not. In 2008 “the market” thought oil was going to $200 a barrel (it’s currently at stalled at $43). We recommend skepticism as a default mode.

So before we drink the Kool-Aid – let’s rewind the tape.

According to Canadian mining folklore – in 1903, an Ontario railway blacksmith named Fred LaRose threw a hammer at a loitering fox. The hammer missed but chipped off a piece of shiny rock.

LaRose gave the rock to some buddies who thought it was nickel. When LaRose’s friends confirmed it was silver – word leaked out – and an army of prospectors descended on the area.

One of these prospectors was William Trethewey, a former real-estate developer.

“I came to a bluff where the point ran down into a swamp,” recalled Trethewey in his 1904 diary, “I had to wade into the water to get round its western face. I could not see the face of the cliff until I had got out about twenty feet, when I saw a black streak on its face I knew it was a silver vein.”

“My first anxiety was to see if anyone had been there before me,” continued Trethewey, “There were fellows down at camp who would have made a wild rush up there if they had known. So I threw sticks and moss over the rock where I had chipped it, and came down to my tent and quietly had my tea.’”

Trethewey staked his claim and excavated an open cut 50 feet long by 25 feet deep, from which he removed 340,000 troy ounces of silver. Astonishingly, the vein was no more than eight inches thick at any point and it was very close to surface.

The veins discovered by Trethewey eventually produced over 40 million troy ounces of silver. But as you can see from this 1923 Globe & Mail news item – there was zero interest in the cobalt.

The mine was in production from 1920 to 1931 and produced 6.5 million ounces of silver. But then the price of silver bottomed out:

Leading to the closure of the mine as stated in this 1931 Globe & Mail article.

CSR is now in complete control of the high-grade Castle Silver property, including the former producing Castle #2 and #3 shafts, which were part of the Castle Trethewey Mining Company.

The historical data confirms that there is a significant amount of cobalt there.

The three shafts of the Castle Silver Mine were held by different companies over the years. Some of the shafts are connected via tunnels. The chain of ownership is complicated. Sometimes mining occurred on one property but the ore was brought to the surface at a shaft on another property.

Banks won’t finance a mine based on “historical data” so CSR must begin proving up the resource from the ground up.

High-grade mineralization was encountered in 3 of the 5 initial chip samples:

1.8% cobalt, 8.6% nickel and 25.2 g/t silver (CSR-17-S03)
1.6% cobalt, 7.6% nickel and 32 g/t silver (CSR-17-S04)
0.81% cobalt, 5.9% nickel and 4.1 g/t silver (CSR-17-S01)

CSR is currently is processing bulk samples using the company’s proprietary Re-2OX hydrometallurgical process to produce high purity cobalt for batteries.

It turns out this process may also be useful in recovering cobalt from recycled batteries.

A reminder: this tide is rising:

In the early 1980’s Agnico Eagle abandoned cobalt in its extract and tailings.

Basa – young, ballsy and brilliant – figured out a way to extract 13,000 tonnes of cobalt from Agnico Eagle’s dumpster.

Despite the recent stock price surge, Castle Silver is still a micro-cap company with a stock price of .26 and a market cap of $11.5 million.

To paraphrase the late great American novelist Raymond Chandler, “Basa has a cobalt resume to make a bishop kick a hole in a stained-glass window.”

The CEO of Castle Silver was right in 1983. If he’s right again, this is a once-in-a-lifetime wealth generation opportunity.

FULL DISCLOSURE: Castle Silver is a new Equity Guru marketing client. If we sound excited, it’s because we are.

Comment by diesel — June 27, 2017 @ 4:43 am
ggi pp must be closing today 500 k @ .155 gone

Comment by brian — June 27, 2017 @ 7:27 am
Trump + CNN. the reporters stories were not vetted properly. stupid. but there are ties to trump and Russia. whether they are worth any more DD is another thing. It was always quite well known how Trump Toronto was financed via Alex via Russian banks via some other dubious sale of some asset in Russia. CNN is no more done than Trump is. So the stupidity continues

Comment by david — June 27, 2017 @ 7:35 am
GGI. nice flush of the 1/2MM offer after the eblast last night! news now would be really nice

Comment by david — June 27, 2017 @ 7:36 am
It’s more than that, Brian, much more—-bulls-eye massive sulphide target right next to the known mineralized zones. Can’t get much better than that.

Comment by Jon - BMR — June 27, 2017 @ 7:53 am
Hope you’re right Jon because I am loaded to the hilt with GGI shares.

Comment by Dan1 — June 27, 2017 @ 8:07 am
Took advantage when the share price dropped to 13 cents. Could have waited until 12 but a cent here or there won’t mean much if this turns out like we all hope and expect.

Comment by Dan1 — June 27, 2017 @ 8:09 am
Jon, that half a million on the ask at .155 yesterday is not there today. Wonder why?

Comment by Dan1 — June 27, 2017 @ 8:11 am
If there are any “ties” between Trump and Russia, David, there are far more between the Clintons and Russia – but of course no one will hear about that on the Clinton News Network. CNN has been doing its best, with little regard for facts, to destroy Trump for more than a year now, and they’re failing badly – very badly, and losing credibility in the process. Ultimately it’ll lead IMHO to a destruction of the Democrats in 2018 mid-terms.

Comment by Jon - BMR — June 27, 2017 @ 8:30 am
MTS. closes off the $500KK pp announced in April and did it at or above mkt for that period, despite requests to lower it . PP was done at 18 cents NFT and 25 cent FT w 1/2 wt at .35 w acceleration clause if it trades above 50 cents. Insiders took down 20% of the PP! should be boots on the ground shortly.

Comment by david — June 27, 2017 @ 8:38 am
oh ya . Clintons were bad asses too, that started years ago with flights into Arkansas. But Frankie Guistra, hero of Yorkton in its heydays, is using Clinton to make sure that his massive gains are put to good use throughout the world. lotsa backscratching in all the 1%

Comment by david — June 27, 2017 @ 8:44 am
Jon
Did you mean middle of August above on GGI results? Can they get results back by end of July?
Thanks

Comment by Gregh — June 27, 2017 @ 9:47 am
I believe the end of July is possible, Greg, for first results, especially on a rush.

Comment by Jon - BMR — June 27, 2017 @ 11:13 am
Cobalt now at another new high – $26.76…
and another nice piece on CSR…

Castle Silver To Charge Cobalt Sector
MINING JOURNAL

Castle Silver Resources (CN:CSR) is aiming to breathe new life into the historical silver-producing Cobalt camp in Ontario, Canada, and become a primary cobalt producer in the process.

Cobalt, used in three of the four types of batteries typically used in electric vehicles, is primarily produced as a by-product of copper or nickel output, with the majority of that originating in the Democratic Republic of the Congo. The metal is facing an increasing supply deficit, though, which has seen the LME cobalt price increase by more than 100% over the past year.

Castle thinks it has the answer to this supply conundrum through both its mining projects and a technology it is developing to recycle batteries.

Its Castle and Beaver properties were formerly mined for silver but the veins also contain high-grade cobalt, which was overlooked during previous extraction due to the focus on the precious metal. Mines in the greater Cobalt camp produced over 500 million ounces of silver and thousands of tonnes of cobalt in the 20th century.

Silver and cobalt are typically found together in quartz and calcite veins but historical silver production didn¹t focus on cobalt mineralisation and the low-grade silver veins were largely ignored, even if they had high-grade cobalt. The Castle property historically produced 9.5Moz silver and at least 136t of cobalt.

Castle¹s CEO Frank Basa is a professional hydrometallurgical engineer. More importantly, he worked at Agnico Eagle Mines (CN:AEM) when it operated the Castle mine in the 1980s and developed the Re-2OX process to extract the cobalt from the Castle deposit.

Having acquired the Castle properties seven years ago, Basa is now looking to bring it back online as a primary cobalt operation with a silver by-product.

With plenty of historical drill hole data to fall back on and permits in place, it is one step ahead of a number of other explorers in the camp.

The company is taking a two-pronged approach to exploration. It has received permits to access the old underground workings to undertake bulk sampling on the first level and then underground drilling, which is likely to start in July.

The mine workings have visible cobalt in veins that pinch and swell and continue intermittently for tens of metres. The first level extends about 365m east-west and 360m north-south.

The company will also undertake greenfield exploration from surface on targets identified from a recent geophysical IP survey. It plans to drill test these areas later in the year.

“I have a feeling that this is going to move quick. It is best to move with it, or we will get left behind.”

Drilling in 2011 in the area where the IP survey was conducted returned high-grade cobalt, with grades such as 0.12m at 1.44% Co. The company aims to produce an initial resource estimate within a year.
Recycling

Castle potentially has another ace up its sleeve.

Basa thinks the Re-2OX cobalt processing technology he developed can be adapted to extract cobalt from lithium-ion batteries.

Test work is currently underway with SGS Lakefield on the effectiveness of using the Re-2OX process on used lithium-ion batteries and the company expects to have the results soon.

Used telephone and computer batteries with cobalt in them are piling up in warehouses due to a lack of recycling for them in North America, while there seems to be no suitable recylcling solution in Asia either, Basa said.

Asian demand

Electric battery production is increasing rapidly in Asia. Sensing an opportunity, Basa met with battery makers and trading companies in China and Japan last week with the aim of arranging offtake agreements for the Castle mine production and potentially financing a mill at the Castle property.

Basa came back from his trip to Asia with product spec sheets to hand and a sense of real demand for cobalt.

“There is no way that they [cobalt producers] will be able to meet the demand,” he told Mining Journal.

The trip has also made him realise he may need to speed up the bulk sampling at Castle in order to start the product qualification process. This is likely to lead to the company carrying out resource drilling and develop its product at the same time.

“I have a feeling that this is going to move quick. It is best to move with it, or we will get left behind,” he said.

“We weren¹t planning to do bulk sampling for quite a while and it was only going to be small samples, but right now people are already asking me when am I going to start mining.”

Mining Journal

Comment by Jon - BMR — June 27, 2017 @ 7:14 pm