Investors have renewed their interest in an historic Canadian cobalt play amid a recent boom brought on by the adoption of electric vehicles.
Toronto-based First Cobalt Corp. has seen its stock price double in value since announcing last week that it had received shareholder backing for a three-way merger with fellow juniors Cobaltech Mining Inc. and Cobalt One Ltd. The deal includes past-producing mines near Cobalt, Ont., a town named after the metal and located approximately 500 kilometres north of Toronto.
With its acquisitions expected to close in the coming week or so, First Cobalt says it now controls 45 per cent of the land in the so-called “Cobalt Camp,” in addition to owning the only permitted cobalt refinery on the continent that can produce battery-grade materials. While the camp is still in its exploratory stage, shares of First Cobalt are up nearly 280 per cent for the year, closing at $1.47 Wednesday.
“We are the biggest (in the camp) and we’ll probably seek to grow from there,” said Trent Mell, president and chief executive of First Cobalt. “The reason you’re seeing the interest in our stock right now is we were the first to consolidate.”
Cobalt is used in batteries, and First Cobalt is consolidating its grasp on the Northern Ontario camp as electric automaker Tesla Inc. and other car manufacturers plan to boost production of their battery-powered vehicles. According to the London Metal Exchange, one metric ton of cobalt on Monday was priced at US$64,000, nearly double the price from the start of 2017.