LiCo Energy Metals CEO: The Bucke Cobalt Property Provides a Long-term Relationship with Glencore

LiCo Energy Metals CEO Tim Fernback and Director Greg Reimer speak about their five ongoing projects in mining-friendly jurisdictions.

LiCo Energy Metals (TSXV:LIC) is a Canadian company that conducts exploration for both cobalt and lithium. Finding these metals has become critical in the face of surging demand for electric vehicles, cell phones and many other modern devices.
In this interview, LiCo Energy Metals CEO Tim Fernback speaks about his company’s five ongoing projects in mining-friendly jurisdictions, including the recently acquired Glencore (LSE:GLEN) Bucke property.
The Bucke property is located in Eastern Ontario, on the western border of LiCo’s Teledyne project. “This purchase agreement allows LiCo to expand upon one of Glencore’s longstanding Canadian cobalt assets,” said Fernback. “If all goes as planned, we could be selling all our cobalt produced back to Glencore in the future. It is a property sale, but we have also found a significant future customer.”
In our interview with Fernback and one of LiCo Energy Metals’ directors, Greg Reimer, the gentlemen discuss the company’s position in the cobalt and lithium markets and explain their outlooks for both of the metals as demand continues to rise.
Below is a transcript of our interview with LiCo Energy Metals CEO Tim Fernback and Director Greg Reimer. It has been edited for clarity and brevity.
Investing News Network: What is the story behind the Bucke cobalt property in Ontario that was purchased from Glencore?
LiCo Energy Metals President and CEO Tim Fernback: The Bucke property has an interesting story. We have been active in the Eastern Ontario region with our Teledyne property for some time, and Glencore is one of our neighbors. We have always been interested in negotiating and working with them as they are the world’s largest producer of cobalt.
In April 2017, we saw the opportunity to negotiate with them for this property. They were interested in us as candidates due to our proximity and our focus on cobalt exploration. Under the proposed partnership, their terms included smelter return, net smelter revenue, an offtake agreement and a back-end option. We were happy to agree to those terms as they provided us with a long-term relationship with Glencore. We negotiated with them and struck a deal that was announced in early September 2017.
INN: What has it been like for a company of your size to work with such a large player like Glencore?
TF: Glencore has a really talented and diverse geological team that was a pleasure to work with during the acquisition. They are looking to us to continue to explore the property, and they understand that a small and nimble company like LiCo is able to devote funds for exploration and develop the property at a faster rate than they might be able to. Meanwhile, they are able to focus on their mining operations.
The partnership works well in that LiCo will explore the property and move it towards a $100-million in-situ resource level, then encourage Glencore to take up their back-end option, working with them on a joint-venture basis from then on.


INN: We know that Greg Reimer recently joined LiCo’s board, bringing on his extensive experience. Greg, what encouraged you to join LiCo’s leadership team?
LiCo Energy Metals Director Greg Reimer: Approximately nine months ago, I was introduced to a major shareholder of the company, and we discovered that our thoughts on the development of lithium batteries and electric vehicles across the globe were very much aligned. With my experience in the electricity industry and transmission distribution, I have useful insights on the future of storage for electricity grids from a customer, community and grid perspective. I saw a huge opportunity for LiCo — with its focus on lithium and cobalt — and wanted to be a part of it. I joined the advisory committee first, and recently joined the board.
INN: What will your role look like at LiCo?
GR: My role is to determine the opportunities relating to activities in the electric industry and the potential uptake for lithium and cobalt batteries. Electric vehicles are becoming widely accepted and have increased their presence on the road. What we still don’t understand is how quickly the industry will grow, and the levels of adaptation required.
The Edison Electric Institute — an industry association for electric utilities in the US — estimates that by 2025 there will be 7 million zero-emission vehicles on the road in the US. Currently, there are about 570,000. The majority of those new vehicles will be electric vehicles with lithium-cobalt batteries. My job is to highlight things like that and keep track of predictions for the industry.
INN: In your background on the utility side of things, did you see a lot of activity linked to grid storage?
GR: There are three opportunities for storage that the utilities industry is currently developing. Firstly, there’s local storage, which is the storage of electricity in your home or your business. If a person has solar panels on their roof, then electricity is only generated when the sun is out. Near-term developments for local storage would allow for electricity to be accessible for usage at any point of the day, or to be sold back into the grid if not used. Secondly, small neighborhood communities are also coming together to consolidate their excess electricity and store it for later usage or for sale back into the grid. Thirdly, there’s grid-level storage, which electric utilities companies are looking into at the moment by conducting feasibility and pilot tests.
Taking the recent drastic weather events in the US into account, these storage opportunities are becoming more important as regulators and utilities look to make the grid more resilient against extreme weather conditions.
INN: What catalysts are coming up for LiCo that investors should keep an eye out for?
TF: We recently launched drill and assaying programs on our two cobalt properties in Ontario. We are currently working on seven drill cores, and we will drill another 15 or so holes in the area, focusing on several key target areas. The drill program will continue into November, and we expect to release drill and assay results later this year.
In the near future we will also be providing updates regarding our lithium property in Chile. We are currently working with the local indigenous population to determine how best to explore and exploit the resource on our property. We hope to reach an agreement with the local community and be able to bring our drill rigs onto the property by the end of 2017, early 2018.
We are also actively looking for additional properties in both the lithium and cobalt space internationally, in the hopes of increasing our portfolio and our exploration potential.
INN: What is your outlook for lithium and cobalt prices?
TF: Lithium prices have been on the rise, month-over-month, since mid-2015. The price for lithium carbonate is ranging between US$12,000 to US$14,000 a tonne, with a supply-demand imbalance for both lithium and cobalt that is driving the price upwards. It is hard to say if this will continue in the long term. While there is ample supply of lithium in the world, it comes down to whether it is near extraction and whether that supply enters the market in time. We believe that the demand for lithium will be strong over the next few years, so we expect prices to firm up and remain strong.
We also see a demand and supply imbalance for cobalt. We have seen historic cobalt price spikes, where the price went up to US$50 a pound. While we don’t expect it to reach that point in the near term, the price has been rising over the last couple of years, particularly due to demand exceeding supply.
Both these resources are of interest to investors, and that has to do with the increased popularity of electric vehicles and lithium-ion batteries, which will drive the demand for both lithium and cobalt. To give you an idea: in a single Tesla Model S there are roughly 113 pounds of lithium and 51 pounds of cobalt. As the demand for these vehicles rises, as more manufacturers of electric vehicles emerge and as consumer adoption increases, there will be significantly more demand for these two resources.
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Catch up and get informed with this week's content highlights from Charlotte McLeod, our editorial director.

Top Stories This Week: Powell Gets Fed Nomination, Using Gold in a Market Correction youtu.be

We're back after a break last week with quite a bit to cover in the gold space.

After running up past the US$1,860 per ounce mark midway through November, the yellow metal has taken a tumble. At the time of this writing on Friday (November 26) afternoon, it was sitting just under US$1,790.

Gold's losses this week have been attributed to elements like a stronger US dollar and better Treasury yields, although Jerome Powell's US Federal Reserve chair renomination has pulled other factors into play — some market watchers believe he may move to taper and raise interest rates faster than anticipated.


If the Fed follows its previously laid out timeline for tapering, it will wrap up in mid-2022; the central bank has said it won't raise rates until after that. It has also emphasized that its roadmap may change if necessary.

Looking at the larger picture for gold, I heard recently from Nick Barisheff of BMG Group, who believes the stock market is due for a major correction.

"The market is due for a major correction. What will cause it and when it will happen is anybody's guess — it could be tomorrow, it could be six months from now" — Nick Barisheff, BMG Group

It's impossible to know when this correction will happen, but Nick emphasized the importance of acting before it's too late. He pointed out that investors are typically slow to get out of the market once a crash actually begins — they wait for a turnaround, and by the time it's clear there won't be one, they've experienced big losses.

In his opinion, the solution is to get out of the stock market early and transfer money into gold.

Here's how Nick explained it:

"Instead of taking your money off the table and going into cash … you go to gold (because cash is devaluing daily). Gold will at least hold its own and probably appreciate … so by sitting it out in gold you can wait until the market finishes correcting and then buy back in" — Nick Barisheff, BMG Group

With gold's future in mind, we asked our Twitter followers this week what price they think the metal will be at the end of 2021. By the time the poll closed, most respondents had voted for the US$1,800 to US$1,900 range.

We'll be asking another question on Twitter next week, so make sure to follow us @INN_Resource or follow me @Charlotte_McL to share your thoughts.

Finally, in the cannabis space, INN's Bryan Mc Govern spoke with Dan Ahrens of AdvisorShares to get his thoughts on 2021 trends and what's ahead in 2022.

Dan was candid, and said if he had to choose one word to describe the cannabis market in 2021, it would be "painful." Like many others, he's been disappointed in the industry's performance — while positivity initially ran high due to excitement about potential federal changes in the US, ultimately progress has been slow.

"Cannabis started with a big run-up in January and February ... and things dragged from there" — Dan Ahrens, AdvisorShares

Still, Dan has hope for 2022 and said it will be a "huge year" for cannabis. He believes US reforms will come sooner rather than later, and in his opinion those widely anticipated changes will bring a wave of M&A activity.

Specifically, he expects to see alcohol, tobacco and other consumer packaged goods companies making deals with cannabis players, not just cannabis entities doing transactions with each other.

"Those big alcohol companies, tobacco companies, other consumer packaged goods product companies — they're waiting. They're waiting on the US" — Dan Ahrens, AdvisorShares

Want more YouTube content? Check out our YouTube playlist At Home With INN, which features interviews with experts in the resource space. If there's someone you'd like to see us interview, please send an email to cmcleod@investingnews.com.

And don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

cannabis plant layered with German flag graphic
Dmytro Tyshchenko / Shutterstock

Catch up on some of the biggest news of the week for the cannabis investment world.

Three political parties have formed a coalition in Germany, leading to a new government, and it has promised cannabis reform in the European nation.

Meanwhile, a popular cannabis retailer confirmed consumers will now find its products available for delivery on the Uber Eats mobile application in Ontario.

Keep reading to find out more cannabis highlights from the past five days.


Coalition of parties promises forward-looking cannabis policy

Germany, a country with comprehensive and elaborate medicinal rules for cannabis, is in a time of transition as a new government is set to begin to take over after 16 years of Angela Merkel.

Olaf Scholz, the proposed next chancellor of Germany, leads a three party coalition that will become the country's governing body. As part of its promises, talk of adult-use cannabis regulation has now gained even more momentum. A report from MJBizDaily quotes a German policy document that shows the coalition's stance:

"We are introducing the controlled distribution of cannabis to adults for consumption purposes in licensed shops. This controls the quality, prevents the transfer of contaminated substances and guarantees the protection of minors."

However, despite the promise and excitement, it remains to be seen how these ideas will be applied since no formal regulations have been drafted or approved yet.

Canadian cannabis retailer partners with popular delivery app

Tokyo Smoke, a cannabis retail operator in Canada owned by Canopy Growth (NASDAQ:CGC,TSX:WEED), announced a collaboration agreement with Uber Canada (NYSE:UBER) whereby cannabis consumers will be able to use the Uber Eats app to order products before they visit stores.

While the app won't let consumers get cannabis delivered to them, this new method opens the doors to more dynamic ways of buying cannabis.

"As a market leader in innovation and a platform used by so many Canadians, we believe this is the ideal next offering that can be done safely and conveniently on the Uber Eats app," Mark Hillard, vice president of operations with Tokyo Smoke, said in a press release.

A report from the Canadian Press indicates Ontario is considering allowing dispensaries to have delivery and pickup options made available to consumers permanently. The province allowed some of these purchasing options at the outset of the COVID-19 pandemic, but then removed them.

Lola Kassim, general manager of Uber Eats Canada, said this new end-to-end experience will provide consumers with responsible access to legal cannabis products.

Cannabis company news

  • Organigram Holdings (NASDAQ:OGI,TSX:OGI) issued financial results for its Q4 2021 period. In its report, the company notes a net loss of C$26 million despite a 22 percent uptick in net revenue to C$24.9 million. Beena Goldenberg, the newly appointed CEO of the firm, is encouraged by the market share position earned by the company, which said it became the fourth biggest producer in Canada during the reporting period.
  • Halo Collective (NEO:HALO,OTCQB:HCANF) confirmed the decision for Akanda, its spinoff company focused on international cannabis opportunities, to begin trading on a US exchange. "The number of shares to be offered and the price range for the proposed offering have not yet been determined," the company told investors in a press release.
  • High Tide (NASDAQ:HITI,TSXV:HITI) announced the acquisition of 80 percent of NuLeaf Naturals, a CBD product wellness developer, for an estimated US$31.24 million. The deal includes a three year option clause for High Tide to complete a total acquisition. "As international markets open up and as export regulations evolve, NuLeaf's cGMP-certified facility positions us to take advantage of the global CBD business opportunity," Raj Grover, president and CEO of High Tide, said.
  • Humble & Fume (CSE:HMBL,OTC Pink:HUMBF) released the financial report for its first 2022 fiscal quarter to shareholders and the market. "As the legal cannabis market in North America continues to mature, Humble remains agile and focused on providing a leading solution for brands to scale quickly and retailers to focus on their customers," Joel Toguri, CEO of Humble, said.

Don't forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

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