The more cobalt prices rise, the more pressure companies with cobalt projects face. On Monday, Vancouver-based eCobalt Solutions Inc. found itself under siege from Australian rival Jervois Mining Ltd, which announced it has acquired 4.7 per cent of its shares — the potential rumblings of a hostile take over.
The announcement comes two days after Australian hedge fund Tribeca Investment Partners sent a stern letter to eCobalt’s board, rebuking its management for “unnecessary” delays and mistakes as it seeks to build a cobalt mine in Idaho.
The letter, obtained by the Financial Post from an industry insider, highlights the eCobalt’s struggling stock price, calling for a sale of the company and a change in management.
“Our contention is that (eCobalt)’s poor performance is the result of strategic missteps,” Ben Cleary, a portfolio manager at Tribeca, wrote in the letter. The TSX-listed eCobalt’s stock price has declined 42 per cent in the past year even as the cash price of cobalt rose 22.5 per cent, according to the letter.
Its stock was trading at 92 cents on Monday, down from $2.07 at the start of the year. Cleary was not immediately available for comment and J. Paul Farquharson, chief executive of eCobalt, declined to comment.