It’s only been in existence for just over 18 months, but already Global Energy Metals Corporation (TSXV:GEMC) is making serious inroads into the cobalt space. That’s because although the company may be recently listed, the people behind it are not.
In fact, they have a very good idea indeed of what they are doing and what they are trying to achieve.
Part of the story for over a decade..
“We’ve been part of the cobalt story for just over a decade now,” says Mitchell Smith, the chief executive of Global Energy Metals.
“We followed the markets and gained a good understanding of the space before it was a hot topic. The reason for creating GEMC was to create an aggregator of cobalt projects and materials in jurisdictions outside the Democratic Republic of Congo to become a supplier of cobalt material as the demand for the metal ramps.”
No-one doubts the ability of the DRC to deliver up some of the most prolific cobalt production in the world, albeit that it mainly comes as a by-product of the country’s famous copper mines.
But the question of political stability and the increasing prominence of cobalt as a material central to the manufacture of electric vehicle batteries all come together to make a non-DRC focus on cobalt a strategic no-brainer.
“We saw the DRC as a real bottleneck in terms of supply given the country’s geo-political and ethical situation let alone the major transportation and infrastructure logistics,” says Smith.
And as the dynamics for cobalt demand began to change with new technology, Smith and his team also saw the opportunity to create a new vehicle to provide a solution.
Global Energy Metals was created to be a non-conflict, non-DRC, supplier of cobalt material through project acquisition, development and material sale to successfully compete in the global cobalt market.
“We learned over time that the cobalt market was becoming more and more centralised around the rechargeable battery space,” says Smith.
“A few years ago it was PCs and mobiles. Now it’s electric vehicles. We see a great deal of potential for that.”
Who’s buying cobalt…?
Who’s buying cobalt and why will obviously be crucial to the way the industry develops, and Smith quickly plugged GEMC into potential partnerships with likely customers, particularly in China.
“We spent a lot of time in China and recognised it as the largest cobalt market,” says Smith.
“We have a partnership with Beijing Easpring Material Technology Co. Ltd., one of the world’s leading battery cathode manufacturers. They supply various battery producers, groups like Samsung, LG Chem, BYD and Panasonic who are of course partnered with Tesla. We have a well-established relationship with a major buyer of cobalt in place.”
As it stands, GEMC has two potential sources of cobalt, a project in Australia called Millennium and a project in Canada called Werner Lake.
Werner Lake is the most advanced, near-term primary cobalt mine in Canada, and though the historic resource is relatively small a NI 43-101 resource estimate is currently underway with confirmation work expected to prove out the historic resource of over 1.1 million tonnes at 0.32% cobalt with associated copper and gold. .
GEMC is earning in to the Millennium Cobalt Project, currently owned by Hammer Metals, Australia’s 2015 explorer of the year, who are also engaged with Newmont Mining on its gold assets. There’s room for expansion at Millennium, guided by Hammer’s technical expertise and understanding of the project. Millennium boasts a significant resource of 3.1 mln tonnes at 0.14% cobalt, with copper and gold.
So the Millennium project will be something to pay attention to as GEMC is planning an aggressive work program to advance the already well understood cobalt project.
It’s likely though that more projects will be added to the Global Energy Metals stable in due course, and not just at project level.
“Our strategy is to be suppliers of material to new partners in the battery sector,” says Smith. “That means acquiring projects and stakes in projects and having the ability to market the cobalt material.”
The deal with Easpring points the way, but it’s not exclusive, to allow GEMC to solidify relationships with other battery cathode manufacturers
“It’s a good building block,” says Smith. “They (Easpring) are mandated by the Central Government to secure upstream raw material from outside of the DRC. But there are other groups that we are actively in discussions with as well.”
And there’s more….
“Our strategy is to aggregate supply via producing mines, streams and off-take,” says Smith.
“GEMC‘s goal is for us to wrap our arms around as many high quality projects as we can. The real opportunities may end up coming from off-takes, given the majority of product comes from copper production. We see vast opportunity with cobalt and are positioning the company by actioning our corporate strategy to become a supplier of cobalt material.“.