Technological Innovations Set to Push Demand for Lithium and Cobalt Markets
FinancialBuzz.com News Commentary
NEW YORK, February 21, 2018 /PRNewswire/ --
According to data compiled by CRU Group, cobalt demand is estimated to have exceeded 100kt in 2017, and is projected to grow at a CAGR of 11.6 percent over the next ten years. Currently, Cobalt is most commonly used in superalloys and other metallic applications, but in the coming years cobalt demand is expected to increase significantly due to increasing popularity of electric vehicles (EVs). Cobalt is one of the main components in lithium-ion batteries, which are used mainly to power electric vehicles and portable consumer electronic devices. According to Research and Markets, the rising demand for EVs will contribute the most to the lithium-ion market growth, which is forecasted to grow at a CAGR of 11.34 percent. First Cobalt Corp. (OTC: FTSSF), Katanga Mining Limited (OTC: KATFF), Lithium Americas Corp. (NYSE: LAC), Albemarle Corporation (NYSE: ALB), Lundin Mining Corporation (OTC: LUNMF)
The shift from diesel powered vehicles to electric vehicles is due to growing environmental concerns. Many countries have acknowledged the issue and have already pushed automotive manufacturers to ramp up production. Demand is also expected to increase in the coming years because manufacturers look for more cost-efficient solutions. "We need to make a car that most people can afford, in order to have a substantial impact," said Elon Musk, CEO of Tesla, "Electric vehicles were always going to be the long-term transportation mechanism, but to make that day come sooner, you have to bridge the gap with innovation."
First Cobalt Corp. (OTCQB: FTSSF) is also listed on the TSX Venture Exchange under the ticker symbol 'FCC'. Earlier today the company announced breaking news that, "it has begun drilling in Cobalt North, near the historic Drummond, Kerr and Conisil mines. This new program follows completion of a maiden drill program in Cobalt South that identified three distinct mineralized areas that will require follow up. Highlights:
- Three distinct mineralized areas identified in Cobalt South to date: Woods Extension Zone, Keeley South Zone and Bellellen Mine
- Initial Cobalt North drill program to consist of 16 holes for 3,500m to follow up on polymetallic mineralization found in muckpile grab samples that returned grades of up to 0.65% cobalt with 4,990 g/t silver and up to 1.79% copper with 56 g/t silver
- Drill hole targeting in Cobalt North guided by new 3D geological model based on extensive historic data compilation and 2017 regional field mapping
Trent Mell, President & Chief Executive Officer, commented: "In our first drill campaign, we successfully identified three distinct cobalt mineralized zones in Cobalt South that warrant follow up. As we focus on Cobalt North for the second leg of the winter drill campaign, we have combined a rich set historical data with our own field work to build a 3D geological model. In Cobalt North, we have several opportunities to identify resources in different styles of mineralization that would not have been considered historically. We believe this program will increase our options to find new cobalt resources in the Camp."
Following a successful maiden drill program in Cobalt South, First Cobalt has initiated drilling in Cobalt North, with the first target area near the Drummond, Kerr and Conisil mines. Historic records indicate these three mines produced nearly one million pounds of cobalt and over 36 million ounces of silver in an era when silver was the primary focus.
Drummond, Kerr and Conisil Program - The initial drill program in Cobalt North will consist of 16 drill holes for a total of 3,500 metres designed to test trends in mineralization found in historic drilling and major structures interpreted to be associated with mineralization (Figure 1). Disseminated polymetallic cobalt-silver-copper-zinc-lead mineralization has been recognized in samples from underground material in muckpiles from the Drummond mine showing a wide range of styles occur in this area (October 26, 2017 press release).
Holes were targeted using a new 3D geological model prepared with the support of InnovExplo of Val d'Or, Quebec. The model incorporates 2017 regional field mapping information and extensive historic data from more than 100km2 and to a depth of 500m, integrating information from twelve historic mines in the area and from government and unpublished surface geology maps. Major structures controlling known silver-cobalt-nickel mineralization throughout the area are reflected in the model. The drill program will test structural interpretation of faults and folds considered to be associated with mineralization. At the Keeley, Frontier and Bellellen mines in Cobalt South, breccia zones develop along the major structures hosting cobalt-silver mineralization. Broad zones of disseminated and fracture-controlled cobalt-nickel-silver-copper mineralization are developed along the margins of these structures as well… Drilling will also test mineralized trends based on historic drill holes with calcite veins containing silver mineralization to test for cobalt, which was not typically assayed with silver. Depth extensions to mineralization will also be tested where appropriate.
Cobalt South Drill Results- Results from the 2017 drill program in Cobalt South successfully identified three target areas: the Woods Extension Zone, the Keeley South Zone and the Bellellen Mine (Figure 2). The program focused on a two kilometre strike length of the Keeley-Frontier vein system and was designed to test the wallrocks hosting silver-rich mineralization as well as areas known to be cobalt-rich. Holes were drilled from 30m to 300m deep to establish variable vein orientations and to determine the Co-Ni-Ag grades in the host rocks to the known Ag-Co calcite veins.
(1) Woods Extension Zone - The Woods Extension Zone was identified from assay results at the northern extent of the Frontier mine. Assays from all holes near the historic Frontier mine drilled in 2017 have now been received. Early assay results from the Frontier mine included an intersection of 0.83% Co and 30 g/t Ag over 0.48 metres (November 2, 2017), which was the first indication of a possible extension of the Woods Vein system. Most cobalt-rich veins intersected demonstrate that mineralization extends outside of the silver-bearing veins. A new cobalt-nickel vein was found between the Woods and Watson veins, grading 0.57% Co and 1.40% Ni over 0.40m (January 10, 2018), suggesting a network may exist where faults and folds converge. The highest grade cobalt veins occur at the north end of the Frontier mine, specifically along the Watson Vein.
(2) Keeley South Zone - Broad zones of disseminated silver and cobalt in altered mafic volcanic rocks were found near the Keeley Mine confirming this style of mineralization is present over significant widths and may be found where vein networks converge. Over 70 metres of anomalous cobalt grading 0.043% Co as disseminated mineralization was identified in drill hole KF-WV-0013 in the southern portion of the historic Keeley mine, starting 15 metres from surface. Drilling in the Keeley South Zone intercepted cobalt in the Woods Vein as well as two additional cobalt intercepts, the KeeleyCo#1 vein and the KeeleyCo#2 vein, indicating that several veins exist in this area. Assays included 15.7m of 0.12% Co, including 6.2m at 0.21% Co and 0.68% Co over 0.34m in the Woods Vein and 1.15% Co over 0.42m in the KeeleyCo#1 vein and 0.60% Co over 0.38m in the KeeleyCo#2 vein (December 19, 2017). Limited workings were developed into the KeeleyCo#1 and KeeleyCo#2 veins historically for test mining and it is believed they were abandoned due to the low silver, high cobalt nature of the veins. The grades in these new cobalt veins are consistent with other known veins in Cobalt South such as Haileybury and Frontier 1.
(3) Bellellen Mine - Drilling at the Bellellen Mine began in January 2018 and the program was designed to confirm the presence of cobalt-nickel mineralization away from historic mining and to identify the distribution of both vein-style and disseminated-style mineralization previously sampled from underground material. Drill holes targeted the north-south trending Bellellen Vein and the northeast trending Frontier 2 Vein. Initial assays from this program returned 0.78% Co and 0.83% Ni over 2.0m, including 1.1m of 1.35% Co and 1.47% Ni along the Bellellen Vein system that extends for approximately 300 metres of strike length (February 13, 2018 press release). Several calcite veins and disseminated zones of mineralization were also intersected…"
Katanga Mining Limited (OTC: KATFF) operates a major mine complex in the Democratic Republic of Congo producing refined copper and cobalt. All assets and operations of Katanga Mining Limited are located in the Katanga Province of the Democratic Republic of Congo (DRC). It is a vast country with immense economic resources, including an estimated 10% of the world's copper and 50% of its cobalt. Katanga holds a 75% stake in two joint ventures with Gécamines, a state-owned mining company in the DRC. On January 31, 2018, the company announced its 2017 fourth quarter and year end production results. Design work progressed during Q4 2017 on the acid plant, cobalt debottlenecking and cobalt dryer projects. During Q1, 2018, KTC (including KITD), and Luilu are expected to ramp-up the operations to produce copper and cobalt in accordance with the ramp-up plan.
Lithium Americas Corp. (NYSE: LAC), together with SQM, is developing Cauchari-Olaroz, located in the Province of Jujuy, Argentina, through its 50% interest in Minera Exar. In addition, Lithium Americas owns 100% of Lithium Nevada (formerly Kings Valley project), and RheoMinerals Inc., a supplier of rheology modifiers for oilbased drilling fluids, coatings, and specialty chemicals. In 2016, Lithium Americas announced a strategic investment by SQM to advance the Cauchari-Olaroz project in Jujuy, Argentina. Cauchari-Olaroz is located in Jujuy Province in north-west Argentina. The production process involves two distinct steps and is generally consistent with other established brine operations. The first step uses a solar evaporation process to concentrate lithium in the brine and precipitate competing salts in large-scale ponds. The ponds at Cauchari-Olaroz are based on SQM's pond design criteria used in their existing Atacama operation and involve the use of shallow ponds where the precipitated salt is annually harvested from the flat pond base. The second step uses the processing facilities that transform the concentrated lithium brine into battery-grade lithium carbonate while ensuring the removal of impurities from the end-product.
Albemarle Corporation (NYSE: ALB) is the industry leader in lithium and lithium derivatives, one of the highest growth markets in the specialty chemicals industry. The company's unique natural resource position, derivatization capabilities and technology leadership allow Albemarle a sustainable competitive advantage. Albemarle maintains the strongest vertical position in the industry, from raw material extraction to specialty product manufacturing and are able to provide an unmatched security of supply to its valued customers. On December 19, 2017, the company announced that it is launching a new technology for the Fluid Catalytic Cracking (FCC) catalyst market called Granite™. The Granite™ technology platform is based on a novel matrix/binder system, which expands the catalyst formulation window and enables refiners to maximize their profitability through better bottoms upgrading, improved coke selectivity, and higher zeolite stability while achieving targeted product yields.
Lundin Mining Corporation (OTC: LUNMF) is a diversified Canadian base metals mining company with operations in Chile, the United States of America, Portugal, and Sweden, primarily producing copper, nickel and zinc. In addition, Lundin Mining holds an indirect 24 percent equity stake in the Freeport Cobalt Oy business, which includes a cobalt refinery located in Kokkola, Finland. On February 15, 2018, the company reported cash flows of $230.1 million generated from operations in its fourth quarter of the year and $903.5 million for the year. Net earnings from continuing operations attributable to Lundin Mining shareholders were $133.0 million ($0.18 per share) for the quarter and $371.4 million ($0.51 per share) for the year ended December 31, 2017.
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