Wednesday 19th December 2018

Resource Clips

Posts tagged ‘Cobalt 27 Capital Corp (KBLT)’

Streamers turn to cobalt as Vale extends Voisey’s Bay nickel operations

June 11th, 2018

by Greg Klein | June 11, 2018

It was a day of big moves for energy minerals as China bought into Ivanhoe, Vale lengthened Voisey’s and streaming companies went after the Labrador nickel mine’s cobalt.

On June 11 Robert Friedland announced CITIC Metal would pay $723 million for a 19.9% interest in Ivanhoe Mines TSX:IVN, surpassing the boss’ own 17% stake to make the Chinese state-owned company Ivanhoe’s largest single shareholder. Another $78 million might also materialize, should China’s Zijin Mining Group decide to exercise its anti-dilution rights to increase its current 9.9% piece of Ivanhoe.

Streamers turn to cobalt as Vale extends Voisey’s Bay nickel operations

At peak production, Voisey’s underground operations are expected to
ship about 45,000 tonnes of nickel concentrate annually to Vale’s
processing plant at Long Harbour, Newfoundland.

Proceeds would help develop the flagship Kamoa-Kakula copper-cobalt mine in the Democratic Republic of Congo and the Platreef platinum-palladium-nickel-copper-gold mine in South Africa, as well as upgrade the DRC’s historic Kipushi zinc-copper-silver-germanium mine. Ivanhoe and Zijin each hold a 39.6% share in the Kamoa-Kakula joint venture.

Even bigger news came from St. John’s, where Newfoundland and Labrador Premier Dwight Ball joined Vale NYSE:VALE brass to herald the company’s decision to extend Voisey’s Bay operations by building an underground mine.

The announcement marked the 16th anniversary of Vale’s original decision to put Voisey (a Friedland company discovery) into production. Mining began in 2005, producing about $15 billion worth of nickel, copper and cobalt so far. Open pit operations were expected to end by 2022. Although a 2013 decision to go ahead with underground development was confirmed in 2015, the commitment seemed uncertain as nickel prices fell. That changed dramatically over the last 12 months.

With construction beginning this summer, nearly $2 billion in new investment should have underground operations running by April 2021, adding at least 15 years to Voisey’s life. The company estimates 16,000 person-years of employment during five years of construction, followed by 1,700 jobs at the underground mine and Long Harbour processing plant, with 2,135 person-years in indirect and induced employment annually.

Nickel’s 75% price improvement over the last year must have prodded Vale’s decision. But streaming companies were quick to go after Voisey’s cobalt. In separate deals Wheaton Precious Metals TSX:WPM and Cobalt 27 Capital TSXV:KBLT have agreed to buy a total of 75% of the mine’s cobalt beginning in 2021, paying US$390 million and US$300 million respectively. They foresee an average 2.6 million pounds of cobalt per year for the first 10 years, with a life-of-mine average of 2.4 million pounds annually.

Both companies attribute cobalt’s attraction to clean energy demand and a decided lack of DRC-style jurisdictional risk. But Vale also emphasizes nickel’s promise as a battery metal. Last month spokesperson Robert Morris told Metal Bulletin that nickel demand for EVs could rise 10-fold by 2025, reaching 350,000 to 500,000 tonnes.

Total nickel demand currently sits at slightly more than two million tonnes, Morris said. New supply would call for price increases well above the record levels set this year, he added.

Confidence resumes as junior mining market caps reach 2010 levels: PwC

November 8th, 2017

by Greg Klein | November 8, 2017

Cautioning that the market hasn’t fully returned, PricewaterhouseCoopers released data that quantifies the sector’s encouraging mood. As of June 30, TSXV-listed mining/exploration market caps, financings, M&A and IPOs all increased substantially over the previous 12-month period. Calling it a “delicate recovery,” PwC says the numbers show the second straight year of improvement and some of the best results since 2010. Commodity prices get much of the credit, although a more disciplined approach to spending contributed to the positive circumstances.

Junior Mine 2017: Confidence Rekindled examines data from TSXV mining/exploration companies, where almost 1,000 such firms dominate the Venture’s membership and make up 47% of the exchange’s total value and 59% of its trading volume.

The top 100 TSXV mining/exploration market caps totalled $12.2 billion, up 7% from the previous 12-month period. Overall, mining/exploration capitalization increased 18%.

But the numbers compared less impressively with other Venture sectors, where market caps for financial services rose almost 56%, oil and gas 43% and life sciences 95%. PwC attributed the under-performance partly to gold’s levelled-off price.

Treasuries for the Venture’s top 100 miners/explorers rose 74% to $1.57 billion. Those 100 companies raised a total of $2.04 billion in equities, up 174%, and $487 million in debt, up 20%. “But this windfall was unevenly spread, as many juniors continued to struggle to raise financing and more than one-quarter of the total funds went to just four companies”: Cobalt 27 Capital TSXV:KBLT, Leagold Mining (since graduated to the big board as TSX:LMC), Trek Mining TSXV:TREK (expected to merge with NewCastle Gold TSX:NCA and Anfield Gold TSXV:ANF to form an anticipated new company called Equinox Gold TSXV:EQX) and Bluestone Resources TSXV:BSR.

Still, 56 of the top 100 raised over $10 million, seven of them raking in over $50 million.

Spending for the top 100 hit $1.15 billion, compared with $268 million previously. Nevertheless “junior miners appear to be avoiding the temptation of rushing to spend,” the report stated.

PwC quoted Barkerville Gold Mines TSXV:BGM CFO Andres Tinajero saying, “Even though there are a lot of resources flowing around in terms of funding for the juniors, they’re not spending the money as fast as before. So probably, yes, we’ve learned our lesson from the past.”

M&A activity brought more encouragement, as did IPOs. Five of the latter raised $40.2 million. That compared with the previous period’s zero IPOs raising zero dollars.

“We’re not fully recovered from the downturn but we’re definitely on a slow but bumpy ride to recovery,” commented PwC Canada partner Rebecca Chan.

The report is the first of four planned PwC studies examining the industry.