Global Energy Metals CEO: Now is the Time to Invest in Cobalt
Global Energy Metals CEO Mitchell Smith talks about the evolution of cobalt over the past 10 years and its critical role in the battery space.
In the interview below, Smith provides an update on the company’s pure-play cobalt assets in Australia, Canada and the US. He also emphasizes the importance of investors understanding cobalt’s role in lithium-ion batteries and the battery sector.
Below is a transcript of our interview with Global Energy Metals CEO Mitchell Smith. It has been edited for clarity and brevity.
Investing News Network: Please provide our investor audience an overview of Global Energy Metals.
Global Energy Metals CEO Mitchell Smith: We’ve been a cobalt-focused exploration company since we started. Looking for cobalt is not new to us, and our team has over a decade of experience in the sector, which I believe is building as we speak.
INN: The cobalt market emerged 10 years ago, where is it at now?
MS: In the last 10 years, it’s evolved from a specialty metal used in industrial applications and strengthening steel to being a critical component in the battery space.
INN: Will there be a demand for cobalt?
MS: The demand for cobalt is vast and being fueled by the adoption of EVs across the globe, in China, India, not just in North America.
INN: How important is cobalt to lithium-ion batteries?
MS: Lithium accounts for two percent of the weight in a lithium-ion battery. Cobalt accounts for seven percent. Only within the past two years have people have realized the importance of cobalt in the battery space.
INN: Why is cobalt an integral component in lithium-ion batteries?
MS: There’s talk right now about substituting or removing cobalt from the battery, but it’s not going to happen any time soon. Cobalt is crucial to the thermal stability of battery packs, which increases the battery’s longevity, its ability to keep its charge and ensures that it won’t blow up.
Companies like Volkswagen (FWB:VOW) have been talking about investing billions of dollars into developing batteries for EVs and in removing internal combustion engines from their fleets. They don’t want to have another dieselgate, and cobalt is critical to that role.
INN: What properties do you have under development?
MS: Currently, 98 percent of cobalt is produced as a by-product in copper and nickel production, and 65 percent of the world’s cobalt comes from the Democratic Republic of Congo, which can be a challenging jurisdiction to work in.
We did things differently and went to top-tier mining jurisdictions and acquired the Millennium cobalt project in Queensland, Australia and the Werner Lake cobalt mine in Ontario, Canada. We’ve also announced the option for 85 percent interest in two high-grade cobalt projects in Lovelock, Nevada, which is 150 kilometers away from Tesla’s (NASDAQ:TSLA) gigafactory.
INN: What stage of development are those properties at?
MS: Our Nevada assets are early-stage exploration projects. Werner Lake is a past-producing cobalt mine that we’re advancing in partnership with Marquee Resources, who is putting $2.5 million into the project.
We’re currently completing our 100 percent acquisition of the Millennium cobalt property. To date, we’ve completed a drill program on the property, and we’ll be updating the resource in a couple of weeks. We’ll also be completing a second program now that we’ve completed metallurgical testing, confirmed historical data and shown opportunity at the concentrate level. We have new targets we’d like to explore and hopefully expand the resource with.
INN: Why is cobalt a good opportunity for investors?
MS: Cobalt is a niche market that produces approximately 120,000 tonnes per annum. We believe that we can offer investors a secure and stable supply of cobalt from top mining jurisdictions.
INN: What’s the price of cobalt compared to the cost of production?
MS: There was a spike in cobalt prices heading into 2018, but the price has come down a bit. I think a lot of this is due to the trade issues with China and the US. However, our projects are primary cobalt plays that are driven by the price of cobalt and historically, cobalt prices have never been higher.
INN: What’s next for the cobalt market and how does that fit into your long-term goals?
MS: Right now is the time to invest in cobalt, to understand the market and the role cobalt plays in the battery space. As the world adopts EV technology, cobalt is only going to become more important.
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