Top 3 Canadian Cobalt Stocks in 2023
What are the top cobalt stocks so far in 2023? These TSX- and TSXV-listed cobalt companies have all seen year-to-date share price increases.
Cobalt prices reached a four year high and 2022 peak of US$82,000 per metric ton (MT) last May, but have fallen since then due to a supply/demand disparity. The metal is now sitting at US$33,420, up from its 2023 low of US$29,525.
While overall demand is still up compared to Q1 of last year, supply also saw a big increase in 2022.
“Since the market has been, and indeed still is, fundamentally in oversupply, we had considered price erosion in Q2 to be inevitable,” Roman Aubry of Benchmark Mineral Intelligence told the Investing News Network after Q2. “However, a slight rebound in midstream demand from the battery industry in June and severe logistical constraints stemming the flow of product out of the Democratic Republic of Congo helped to establish a floor by mid-June, enabling a firm correction towards the end of the quarter.”
While the Democratic Republic of Congo is the top cobalt-producing nation by a long shot, many countries want to lower their dependence on it due to concerns about human rights and political stability.
Below is a look at the three top cobalt stocks on the TSX and TSXV by share price performance so far this year. All year-to-date and share price information was obtained on July 25, 2023, using TradingView’s stock screener, and all companies listed had market caps above C$10 million at that time. Read on to learn more about what they've been doing.
Year-to-date gain: 213.04 percent; market cap: C$49.78 million; current share price: C$0.72
Exploration company DLP Resources is focused on base metals and cobalt projects in Southeast BC, with a portfolio of properties that includes the Aldridge 1 and 2 groups, the Hungry Creek copper-cobalt-silver project, the Copper Creek copper-cobalt project and the Redburn Creek copper-cobalt project. The company also has the Aurora porphyry copper-molybdenum project in Peru.
In February, DLP shared an exploration update, which included results from 2022 exploration at its Hungry Creek and Copper Creek projects. The company also announced the beginning of its 2023 exploration at Aurora.
DLP's share price jumped significantly to C$0.40 on March 22, the day before the company announced a non-brokered private placement to raise gross proceeds of C$1,500,000. DLP upsized the placement to C$1,712,500 on March 24, and ultimately closed it on April 6 at that amount. The company intends to use the funds for various exploration campaigns at its BC projects.
DLP continued its upward momentum in May, during which time it released results for its fourth drill hole at Aurora. After cooling in June, DLP jumped from C$0.51 to C$0.71 on July 10, despite the fact that it hadn't released any news during the month. On July 24, the company shared further drill results from Aurora; the update led DLP’s share price to hit C$0.72, its highest level ever, on July 25.
Year-to-date gain: 16.18 percent; market cap: C$751.69 million; current share price: C$2.80
Horizonte Minerals is a nickel and cobalt company focused on developing its wholly owned Araguaia nickel project and Vermelho nickel-cobalt project, both of which are in Brazil’s Pará state. Vermelho, which is currently at the feasibility stage, is anticipated to produce 1,250 MT of cobalt on top of its projected 24,000 MT of nickel production.
In late January, Horizonte submitted its environmental and social impact assessment for Vermelho to the Pará State Secretariat for Environment and Sustainability. The company says it is targeting the first half of 2024 for when the submissions will be approved by the entity. Horizonte’s share price jumped from C$2.18 to C$2.60 in the week following the news.
On July 6, the company received a mining approval permit from the Brazilian regulator for its Araguaia nickel project. This will allow the company to “mine, stockpile, and categorise ore, optimising the consistency of the feedstock.” It plans to carry out stockpiling over the next six months to establish enough ore to feed its plant for the six months following that process.
The news pushed Horizonte upward in July, and it ultimately reached a year-to-date high of C$2.88 on July 17.
Year-to-date gain: 15.91 percent; market cap: C$139.68 million; current share price: C$0.51
FPX Nickel is a nickel company developing its flagship Decar Nickel District in BC. The property is host to four targets, including the Baptiste deposit and the Van target, the former of which is the company’s primary target. The company also has 100 percent ownership of three other nickel projects in BC and one in Canada's Yukon. While FPX is primarily a nickel company, it intends to produce cobalt as a by-product of future nickel mining at Baptiste.
On May 17, the company completed hydrometallurgical testwork on Baptiste’s awaruite nickel concentrate using a two stage process with a cobalt solvent and a nickel solvent. The results show that the leach solution was able to extract over 99 percent of the cobalt, and the process can be used to make cobalt hydroxide and cobalt sulfide precipitates grading 40 percent and 39 percent cobalt.
FPX’s share price spiked on May 30 on news that global stainless steel company Outokumpu (OMXHEX:OUT1V) would be investing C$16.08 million in FPX through a private placement financing, resulting in the steel giant owning 9.9 percent of the company. For as long as Outokumpu holds the shares, the deal gives it the right to negotiate one or more offtake agreements for nickel from Baptiste up to a total of 60,000 MT, or 7,500 MT per year for eight years.
The company’s share price moved from C$0.43 on May 29 to C$0.58 by June 5 — a year-to-date high.
FPX’s most recent news came on June 27, when the company announced the completion of all testwork for its upcoming prefeasibility study, which it expects to release in September.
FAQs for cobalt
What is cobalt?
Cobalt is a silver-gray metal that is often produced as a by-product of nickel and copper mining. It does not occur as a separate metal anywhere in the world, and must be produced by reductive smelting, or from the metallic ore cobaltite, which is made of cobalt, sulfur and arsenic.
What is cobalt used for?
Historically, cobalt oxides were used to impart a blue pigment to glass, porcelain and paints, hence the still-used cobalt blue paint. The metal is also used to produce superalloys, as cobalt imparts qualities such as corrosion and wear resistance, which are useful in applications such as airplanes, orthopedics and prosthetics.
Today cobalt is most famously used in the rechargeable lithium-ion batteries that run everything from smartphones to EVs.
Where is cobalt mined?
The majority of cobalt production comes out of the DRC, which was responsible for producing 130,000 MT of the material in 2022. For perspective, the second largest cobalt-producing country, Russia, reported output of 8,900 MT the same year; third place Australia produced 5,900 MT of the material.
As the lithium-ion battery and EV supply chains garner global attention, companies are trying to limit their exposure to cobalt produced from the DRC, which is known for human rights abuses and sometimes child labor in its mining industry.
In response to this trend, many countries with cobalt are attempting to create domestic cobalt and EV supply chains in the hope of attracting companies looking to avoid DRC-sourced cobalt. This can be seen in the up-and-coming battery corridor in Ontario, Canada, as well as in the US-based Idaho cobalt belt.
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Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: FPX Nickel is a client of the Investing News Network. This article is not paid-for content.
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