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Canada's Role in Diversifying the Global Cobalt Supply
Cobalt is a critical battery metal, and creating a stable and secure global supply chain for it is key to a sustainable future.
Global cobalt supply remains dominated by the Democratic Republic of Congo (DRC), which produces more than 70 percent of the world's supply. As demand for cobalt and other battery metals continues to increase in the transition to decarbonization and clean energy, the need to diversify the global cobalt supply chain has never been more critical.
Cobalt resources in more stable jurisdictions like Canada present an opportunity for the resource sector to influence the trajectory of the cobalt supply chain. They also allow investors to take advantage of cobalt production in a more sustainable fashion.
Though these jurisdictions may not possess the same abundant cobalt reserves as the DRC, they possess many clear advantages over the region from both a mining and investment perspective — especially Canada.
Uneven supply, mounting demand
Cobalt is arguably among the most critical battery metals currently in production. The element was already in high demand even prior to the push for net-zero, used in everything from rechargeable batteries to superalloys in jet turbines. According to the International Energy Association, global cobalt production will need to triple by 2030 and quintuple by 2040 just to keep pace with the increased demand. This will require the construction of new mines and the discovery of new deposits. Yet new infrastructure alone will likely not solve the issue fully.
As any investor worth their salt will tell you, diversification is the key to success. Unfortunately, the global cobalt supply chain is anything but diverse, with the DRC accounting for about 70 percent of the world’s production. Any form of destabilization in the region could prove catastrophic to the supply chain. And given that the Fraser Institute's 2021 annual survey of mining companies ranks the DRC near the bottom in policy and investment attractiveness, such risk is not entirely improbable.
This is not the only investment concern presented by the region. Much of the DRC's cobalt production stems from artisanal and small-scale mining operations — and most of these are unregulated and are operating without worker protections or safety standards. Humanitarian concerns are distressingly common, and conflict between mining factions is a regular occurrence.
Unsurprisingly, these operations often occur without regard for their environmental costs. These include extensive pollution, chemicals that leach into water sources and hazardous cobalt dust affecting the surrounding communities. Scientists have also noted that many mining regions in the southern DRC display high levels of radioactivity due to the presence of uranium deposits.
Between the human rights issues and the environmental concerns, the DRC's cobalt supply presents an enormous liability for both investors and brands — to say nothing of its impact on the overall pursuit towards sustainability.
Untapped opportunities in Canadian cobalt
Although currently the fourth largest global producer of cobalt, Canada's contribution pales in comparison to the DRC's, representing roughly 2 percent of global supply. Cobalt production in Canada is largely concentrated in Ontario, Quebec and Newfoundland and Labrador.
Canada's cobalt reserves are admittedly modest compared to those in the DRC. However, Canada’s pre-existing infrastructure and stable regulatory climate represent a considerable advantage. It's also important to note that the majority of Canadian cobalt production is a by-product of nickel and copper mining.
According to Mining Technology, the Voisey's Bay mine, the Raglan mines and the Sudbury Area mine are among the only operating cobalt mines of note. The first, situated in Newfoundland and Labrador, is owned and operated by Vale Canada. It produces roughly 2,000 MT of saleable cobalt per year.
The latter two mines are both owned and operated by Glencore (LSE:GLEN,OTC Pink:GLCNF). The Raglan Mines are situated in Quebec and the Sudbury Area Mines are in Ontario. Together, they produce 1,100 MT of cobalt per year.
Canada ranks seventh in the world for cobalt reserves, with an estimated 220,000 MT. Much of this mineral wealth remains untapped. Thanks to recent developments in cobalt mining and exploration, this may soon change.
Canada's most promising cobalt projects
There are several notable cobalt projects in various stages of development — and all of them show promise from an investment standpoint.
High-Tech Metals’ (ASX:HTM) Werner Lake cobalt project, for instance, has already seen extensive exploration and development work. Situated near the Ontario-Manitoba border, the area in which the project is based hosts extensive pre-existing infrastructure from historic cobalt mining operations. Werner Lake consists of two distinct deposits — the Old Mine deposit and the West Cobalt deposit.
Already in its advanced stages, the project contains an estimated resource of 720,000 pounds at 0.51 percent cobalt.
Global Energy Metals (TSXV:GEMC,OTCQB:GBLEF) is a major player in Canada's cobalt mining sector. In addition to being the original owner of the Werner Lake cobalt project, it also owns and operates the early-stage Chance Lake and Amiral nickel-copper-cobalt projects, which are both situated in Quebec and together cover roughly 2,900 hectares.
Canada Silver Cobalt Works (TSXV:CCW,OTCQB:CCWOF) is another company worth mentioning. The company's flagship project, Castle East Silver, is currently in its advanced exploration stages. Said project includes both a previously producing mine and an incredibly high-grade silver-cobalt deposit.
Other promising projects include Fortune Minerals' (TSX:FT,OTCQB:FTMDF) NICO project, GIGA Metals' (TSXV:GIGA,OTCQX:HNCKF) Turnagain project, Stratabound Minerals' (TSXV:SB,OTCQB:SBMIF) Captain Project and Nova Royalty's (TSXV:NOVR,OTCQB:NOVRF) Dumont project.
Global demand for cobalt will only increase in the coming years and our current supply chain simply cannot keep up. To keep cobalt production both stable and sustainable, we need to diversify and shift from an overreliance on the DRC. Jurisdictions like Canada present a golden opportunity to do so — and a valuable investment target, as well.
This INNSpired article is sponsored by High-Tech Metals (ASX:HTM).This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by High-Tech Metalsin order to help investors learn more about the company. High-Tech Metals is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.
This INNSpired article was written according to INN editorial standards to educate investors.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with High-Tech Metalsand seek advice from a qualified investment advisor.
Capitalizing on Exploration Upside Potential of a Historic Cobalt Project
High-Tech Metals Limited (ASX:HTM) is an exploration and development mining company focusing on its Canadian cobalt asset in the Kenora Mining District. The company’s Werner Lake project has received no previous modern exploration, creating blue-sky potential as High-Tech leverages new technologies and techniques. Additionally, High-Tech Metals is a well-structured entity from a capital perspective, with a highly experienced team of experts leading the company towards its goals. Toby Hughes was appointed to lead the exploration team and improve the value of the Werner Lake project.Cobalt is widely used in various applications due to its unique high-temperature and magnetic properties. Historically, cobalt has been used in jet turbines, electroplating and alloyed with nickel to make powerful magnets. Now, cobalt demand is skyrocketing as electric vehicles (EVs) increasingly take a big chunk of the market. EVs are projected to consume 320 kilotons of cobalt by 2030, about 84 percent of the total cobalt demand.
The Werner Lake project is near the Ontario-Manitoba border and is on the Werner Lake Geological Belt, known for hosting cobalt-copper and base metal deposits. The region has undergone continual exploration and production since cobalt was discovered in 1921.
Canada has the sixth largest cobalt reserves globally and both Ontario and Newfoundland and Labrador produce more than 1,000 metric tonnes of cobalt annually. In addition, Canada hosts many of the world’s top mining jurisdictions due to its mining-friendly policies, which will allow High-Tech Metals to streamline exploration and move towards production.
High-Tech’s project was explored in the 1930s and 1940s, then was taken into production in the 1990s. Results from historical exploration and production informed the project’s current JORC-compliant resource estimate of 720,000 pounds (lbs) at 0.52 percent cobalt. While encouraging, the team also believes there is a significant exploration of upside potential by leveraging modern tools and techniques.
High-Tech Metals has taken steps to expand its portfolio, securing an agreement to acquire the Norpax Deposit and an option to purchase the Reynar Lake Project, located in Ontario, Canada. The projects are directly west and adjoin the company’s Werner Lake Project The Norpax Nickel Sulphide Deposit has a historical non-JORC compliant resource of 1.01 million tonnes of 1.2 percent nickel and 0.5 percent copper. The Reynar Lake Project is highly prospective for nickel, copper and cobalt which could potentially provide HTM with additional landholding and increase its cobalt resource and explore for additional nickel sulphide mineralisation.
- High-Tech Metals is an exploration and development mining company exploring its underexplored cobalt asset in Canada.
- The company is a well-structured entity from a capital perspective, with the right management team in place to realize the potential of its assets.
- The Werner Lake Cobalt Project has seen some historical exploration and production but has not been explored with modern exploration techniques and technologies, creating upside potential for additional discoveries.
- Renowned geologist Toby Hughes leads the exploration team.
- Cobalt is currently used throughout a wide range of applications, and the growth of renewable technologies will continually drive up demand for the metal.
- The Werner Lake project is located on the Ontario-Manitoba border in a prolific mining district with an existing road network to facilitate future transportation.
- The company’s asset has a current JORC-compliant resource estimate of 720,000 lbs of ore at 0.52 percent cobalt.
- An experienced management team leads the company towards fully exploring its cobalt asset.
Werner Lake Cobalt Project
The company’s cobalt project sits on the Ontario-Manitoba border in the Kenora Mining District, a region known for cobalt, copper and other base metals. The Werner Lake project has some historical exploration and production but has not received any exploration using modern technologies and techniques. High-Tech Metals is currently preparing for its initial geophysics exploration campaign.
- Encouraging Mineral Resource Estimate: The Werner Lake project has a current JORC-compliant resource estimate of 720,000 lbs at 0.52 percent cobalt. This optimistic estimate demonstrates the presence of cobalt, yet the exploration team believes there is tremendous potential to expand known deposits.
- Favorable Geological Formations: The Werner Lake Geological Belt, where the company's project is located, hosts numerous cobalt-copper and base metal showings. Additionally, the region contains multiple past-producing mines, which indicates its potential.
- Exploration Expertise: Renowned exploration expert Toby Hughes leads the exploration team. High-Tech Metals hopes to expand known deposits to improve the value of its asset.
- Significant Assay Results from Summer Sampling Program: High-Tech Metals collected approximately 209 rock samples which returned high-grade nickel sulphide (greater than 1 percent Ni) rock chips, which have predominantly been explored for cobalt and copper, also returned high-grade samples including 6.22 percent copper and >1 percent cobalt.
Charles Thomas - Non-executive Chairman
Charles Thomas is an executive director and founding partner of GTT Ventures a leading boutique corporate advisory firm based in Australia. Thomas holds a Bachelor of Commerce from UWA majoring in corporate finance. Thomas has worked in the financial service industry for more than 17 years and has extensive experience in capital markets as well as the structuring of corporate transactions. Thomas has significant experience sitting on numerous ASX boards spanning the mining, resources and technology space. Thomas is currently non-executive director of Chase Mining Corporation (ASX:CML), non-executive chairman of Viking Mines Ltd (ASX.VKA) and executive chairman of Marquee Resources Limited (ASX:MQR).
Sonu Cheema - Executive Director
Sonu Cheema is a director at Cicero Group Pty Ltd and has over 12 years of experience working with public and private companies in Australia and abroad. Roles and responsibilities include financial control, preparation of statutory financial reporting, investor relations, initial public offers (IPO), reverse takeovers (RTO), management of capital raising activities, project management and audit management. Cheema currently serves as a non-executive director and company secretary for Avira Resources (ASX:AVW) and Austin Metals (ASX:AYT).
Quinton Meyers - Non-executive Director & Company Secretary
Quinton Meyers has over six years of experience working in the equities markets in the capacity of a stockbroker, company secretary and accountant for multiple ASX-listed companies gaining exposure to the resource, oil and gas and technology sectors. During this time, Meyers has worked on multiple initial public offers, reverse takeovers, equity capital markets transactions, while developing his knowledge of the ASX Listing Rules and Corporations Act.
Meyers holds a Bachelor of Commerce in accounting and finance from Curtin University, a Graduate Diploma in financial planning and is a member of the Chartered Accountants Australian & New Zealand.
Toby Hughes - Leader of Exploration
Toby Hughes is a professional geologist having worked in mineral exploration for more than 40 years, with experience in orogenic and epithermal systems, volcanogenic massive sulphides, and Cu-Ni-Co. He has worked for several years on and around the Werner Lake deposit, with additional experience in cobalt exploration within the Bear Magmatic Province, NT, Cobalt, ON and China. As a consultant, he has held senior positions with junior and senior mining companies across Canada, Argentina, China, Columbia, Ghana, Guyana, Mongolia, Peru, Venezuela, and the USA exploring for precious, base metal, industrial minerals and diamonds. Hughes is a graduate of The University of Dundee, Scotland (Honours B.Sc. Geology) and a registered professional geoscientist in Ontario.