Cobalt price: Supply scramble heats up with Canadian deal – by Frik Els ( – February 22, 2018)

Investors piled into Cobalt 27 Capital Corp (TSX-V:KBLT) and RNC Minerals (TSX:RNX) on Thursday after the companies entered into a royalty deal on all future nickel and cobalt production at RNC Minerals’ Dumont project in Quebec in a deal worth $70 million.

Shares in Toronto-based Cobalt 27 gained as much as 6% in lunchtime trade lifting its market cap to C$440m ($350m) . Investors who bought into the battery metals story when Cobalt 27 listed in June are now enjoying a 45% appreciation in the value of the stock since then. Cobalt 27 stockpiles the metal, holds options on cobalt juniors and enters into streaming and royalty deals in an effort to be a pure play on the cobalt price.

RNC Minerals stock popped 12% shortly after the open on the TSX affording the company a market value C$90m before cooling off in later trade. The Toronto-based firm which changed its name from Royal Nickel Corp in 2016 owns 50% of the Dumont project in the Abitibi mining camp in a joint venture with Waterton, a private equity investor. RNC Minerals is up 43% year to date.

The transaction is for a 1.75% net smelter return royalty on the project which according to RNC holds 3.15 million tonnes of nickel sulphide and 126,000 tonnes of cobalt, making it the largest undeveloped deposit of both minerals in the world. At full production Dumont would be the world’s fifth largest nickel sulphide mine.

RNC puts capital outlay to build the mine at around $1 billion, which could be in production as early as 2020. The project has been fully permitted since June 2015, when the Quebec Ministry of Sustainable Development, Environment and Fight Against Climate Change (to give the ministry its full name) issued a certificate of authorization, which is the province’s most significant permit for a mining project.

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