Top 3 Canadian Cobalt Stocks in 2024

Year-to-date gain: 15.38 percent; market cap: C$32.94 million; current share price: C$0.60

Canada-based exploration and development company Electra states it is actively involved in processing low-carbon, ethically sourced battery materials. The company is working to develop North America's sole cobalt sulfate refinery while operating a black mass recycling demonstration plant. Black mass is obtained from end-of-life lithium-ion batteries.

Electra is also progressing exploration efforts at its Iron Creek cobalt and copper project in the Idaho Cobalt Belt, and expanding its cobalt sulfate processing capabilities in Bécancour, Québec.

In early February, Electra released an update on its black mass demonstration plant near Toronto. The overview notes that recent optimizations have enhanced the recovery of lithium, nickel, cobalt and other essential minerals, improving the quality of saleable end products. Further optimization studies will include metal recovery from internal recycling streams, and Electra said preliminary lab results suggest positive prospects for isolating cobalt from nickel in the leach liquor.

On February 9, the company received a C$5 million investment from the Canadian government for the construction of its cobalt sulfate refinery. The refinery, which will be situated in Temiskaming Shores, Ontario, aims to supply roughly 5 percent of the world's battery-grade cobalt essential for electric vehicles. The C$5 million grant is being dispersed through the Federal Economic Development Initiative for Northern Ontario.

“Canada has surpassed China as the top jurisdiction in the global battery supply chain, given its strength in raw materials mining and processing,” Trent Mell, Electra’s CEO, said. “Today’s investment from the Government of Canada means that Northern Ontario will seize the economic opportunities created by Canada’s transition to a green economy.”

Shares of Electra reached a year-to-date high of C$0.97 on February 15.

Year-to-date gain: 6.67 percent; market cap: C$87.67 million; current share price: C$0.32

FPX Nickel is currently advancing its Decar nickel district in BC, Canada. The property comprises four key targets, with the Baptiste deposit being the primary focus, alongside the Van target.

FPX Nickel also has three other nickel projects in BC and one in the Yukon, Canada. While nickel extraction is its main focus, the company plans to produce cobalt as a by-product from future mining operations at the Baptiste site.

In mid-January, FPX secured a C$14.4 million strategic equity investment from Sumitomo Metal Mining Canada, a subsidiary of Japanese nickel miner Sumitomo Metal Mining (TSE:5713).

Martin Turenne, president and CEO of FPX, noted that Sumitomo's investment is a substantial validation of Baptiste, highlighting Sumitomo Metal Mining's expertise in nickel production and supply chain diversification.

Shortly after the Sumitomo news, FPX announced the “company’s three strategic investors have fully exercised their participation rights to re-establish their respective initial ownership interest in FPX’s issued and outstanding common shares.” The exercise resulted in the completion of an additional private placement, where a total of 8,981,971 common shares were issued to the strategic investors at C$0.48 each, generating C$4,311,346 in proceeds.

With approximately C$45 million on hand, including the proceeds, FPX expects to be fully funded for its 2024 and 2025 activities. Shares of FPX spiked following the news and reached a year-to-date high of C$0.40 on February 5.

Year-to-date gain: 5 percent; market cap: C$123.16 million; current share price: C$0.31

Sherritt International is a leading global player in hydrometallurgical processes for nickel and cobalt extraction. At its Moa joint venture, located in Cuba, Sherritt is pursuing a 25 year expansion program to boost annual mixed sulfide precipitate output by 20 percent, equating to 6,500 MT of nickel and cobalt.

On January 15, Sherritt announced it was implementing organization-wide cost-cutting measures to enhance operations in response to market conditions. Part of these efforts included a corporate restructuring and a 10 percent reduction in Canadian staff. In February, the company released its 2023 results and 2024 guidance. In the report, Sherritt notes that total cobalt production on a 100 percent basis was 2,876 MT, “slightly below their annual guidanceranges.”

For 2024, the company is anticipating an uptick in nickel and cobalt production “due to increased feed of mixed sulphides from the Moa mine site to the refinery as a result of access to additional ore sources.”

Sherritt shares marked a year-to-date high on April 10 of C$0.36.