High-Tech Metals Limited (ASX:HTM) is an exploration and development mining company focusing on its Canadian cobalt asset in the Kenora Mining District. The company’s Werner Lake project has received no previous modern exploration, creating blue-sky potential as High-Tech leverages new technologies and techniques. Additionally, High-Tech Metals is a well-structured entity from a capital perspective, with a highly experienced team of experts leading the company towards its goals. Toby Hughes was appointed to lead the exploration team and improve the value of the Werner Lake project.
Cobalt is widely used in various applications due to its unique high-temperature and magnetic properties. Historically, cobalt has been used in jet turbines, electroplating and alloyed with nickel to make powerful magnets. Now, cobalt demand is skyrocketing as electric vehicles (EVs) increasingly take a big chunk of the market. EVs are projected to consume 320 kilotons of cobalt by 2030, about 84 percent of the total cobalt demand.
The Werner Lake project is near the Ontario-Manitoba border and is on the Werner Lake Geological Belt, known for hosting cobalt-copper and base metal deposits. The region has undergone continual exploration and production since cobalt was discovered in 1921.
Canada has the sixth largest cobalt reserves globally and both Ontario and Newfoundland and Labrador produce more than 1,000 metric tonnes of cobalt annually. In addition, Canada hosts many of the world’s top mining jurisdictions due to its mining-friendly policies, which will allow High-Tech Metals to streamline exploration and move towards production.
High-Tech’s project was explored in the 1930s and 1940s, then was taken into production in the 1990s. Results from historical exploration and production informed the project’s current JORC-compliant resource estimate of 720,000 pounds (lbs) at 0.52 percent cobalt. While encouraging, the team also believes there is a significant exploration of upside potential by leveraging modern tools and techniques.
High-Tech Metals has taken steps to expand its portfolio, securing an agreement to acquire the Norpax Deposit and an option to purchase the Reynar Lake Project, located in Ontario, Canada. The projects are directly west and adjoin the company’s Werner Lake Project The Norpax Nickel Sulphide Deposit has a historical non-JORC compliant resource of 1.01 million tonnes of 1.2 percent nickel and 0.5 percent copper. The Reynar Lake Project is highly prospective for nickel, copper and cobalt which could potentially provide HTM with additional landholding and increase its cobalt resource and explore for additional nickel sulphide mineralisation.
The company’s cobalt project sits on the Ontario-Manitoba border in the Kenora Mining District, a region known for cobalt, copper and other base metals. The Werner Lake project has some historical exploration and production but has not received any exploration using modern technologies and techniques. High-Tech Metals is currently preparing for its initial geophysics exploration campaign.
Charles Thomas is an executive director and founding partner of GTT Ventures a leading boutique corporate advisory firm based in Australia. Thomas holds a Bachelor of Commerce from UWA majoring in corporate finance. Thomas has worked in the financial service industry for more than 17 years and has extensive experience in capital markets as well as the structuring of corporate transactions. Thomas has significant experience sitting on numerous ASX boards spanning the mining, resources and technology space. Thomas is currently non-executive director of Chase Mining Corporation (ASX:CML), non-executive chairman of Viking Mines Ltd (ASX.VKA) and executive chairman of Marquee Resources Limited (ASX:MQR).
Sonu Cheema is a director at Cicero Group Pty Ltd and has over 12 years of experience working with public and private companies in Australia and abroad. Roles and responsibilities include financial control, preparation of statutory financial reporting, investor relations, initial public offers (IPO), reverse takeovers (RTO), management of capital raising activities, project management and audit management. Cheema currently serves as a non-executive director and company secretary for Avira Resources (ASX:AVW) and Austin Metals (ASX:AYT).
Quinton Meyers has over six years of experience working in the equities markets in the capacity of a stockbroker, company secretary and accountant for multiple ASX-listed companies gaining exposure to the resource, oil and gas and technology sectors. During this time, Meyers has worked on multiple initial public offers, reverse takeovers, equity capital markets transactions, while developing his knowledge of the ASX Listing Rules and Corporations Act.
Meyers holds a Bachelor of Commerce in accounting and finance from Curtin University, a Graduate Diploma in financial planning and is a member of the Chartered Accountants Australian & New Zealand.
Toby Hughes is a professional geologist having worked in mineral exploration for more than 40 years, with experience in orogenic and epithermal systems, volcanogenic massive sulphides, and Cu-Ni-Co. He has worked for several years on and around the Werner Lake deposit, with additional experience in cobalt exploration within the Bear Magmatic Province, NT, Cobalt, ON and China. As a consultant, he has held senior positions with junior and senior mining companies across Canada, Argentina, China, Columbia, Ghana, Guyana, Mongolia, Peru, Venezuela, and the USA exploring for precious, base metal, industrial minerals and diamonds. Hughes is a graduate of The University of Dundee, Scotland (Honours B.Sc. Geology) and a registered professional geoscientist in Ontario.
Reiterating that point in a July report, Cook and Angeline Shi, also of Fastmarkets, note that China’s CMOC Group (OTC Pink:CMCLF,SHA:603993) produced 54,024 tonnes of cobalt metal in the first half of the year, achieving 83 percent of its annual guidance of 60,000 to 70,000 tonnes. This surge, which added to an already oversupplied market, was reportedly driven by the expansion of CMOC’s TFM mine, along with increased monthly output at the KFM mines in the DRC.
As Cook explained, Fastmarkets expects cobalt metal prices to trend lower through the third quarter of 2024.
Cobalt metal price graph, June 2022 to April 2024.
Chart via Fastmarkets.
While cobalt metal prices remained muted in Q2, Cook noted that there is a growing price discrepancy between the value of cobalt metal, or standard-grade material, and alloy-grade material.
The spread between alloy-grade and standard-grade cobalt has widened to its largest point since 2009. Strong demand from the US aerospace sector has created a premium for approved aerospace brands amid supply tightness, he noted.
“We are seeing alloy grade at a premium,” Cook told the audience at the Fast markets event. “The main demand source at the moment is aerospace demand, and military defense applications as well.”
Additionally, a 25 percent US tariff on Chinese cobalt metal is somewhat restricting long-term imports. While some have opted to pay the tariff, Cook sees that trend as unsustainable.
He also highlighted a discrepancy between low standard-grade and high standard-grade prices. Supply disruptions for some western brands have created a small premium, with deals clustering around the higher end of the range. The rapid expansion of production capacity for Chinese brands has increased their availability, further widening the range.
Last year, global cobalt mine supply jumped 16.75 percent year-over-year, rising from 197,000 tonnes in 2022 to 230,000 in 2023. Both the DRC and Indonesia saw significant production increases, with the DRC's output climbing from 144,000 tonnes in 2022 to 170,000 in 2023 — that amounts to 74 percent of global supply. Indonesian production grew from 9,600 tonnes to 17,000 tonnes during the same timeframe, making up 8 percent of supply.
With higher mine output from the DRC and Indonesia, and increased refinery production in China, Fastmarkets is forecasting a 10,000 tonne surplus for 2024, which will add to price headwinds. This despite China’s State Reserve Bureau (SRB) making a strategic cobalt acquisition of 15,000 tonnes for delivery by the end of the year.
“Initially the (stockpiling) provided a boost to standard-grade prices; (however), the low end has since fallen to levels seen before the SRB purchase,” explained Cook. Moving forward, the SRB's 15,000 tonne acquisition could be offset by heightened production in China through the second half of the year.
Elsewhere, high copper prices are likely to keep cobalt by-product production in the DRC at elevated levels.
Indonesian cobalt supply is the result of high-pressure acid leaching (HPAL), a process used to extract nickel and cobalt from laterite ore bodies. Fastmarkets expects this space to grow significantly in the next decade.
“An increase in Indonesian HPAL capacity will more than double its share of cobalt mine supply by 2028," said Cook. “Indonesia will account for 19 percent of mine supply by 2028.”
With this increased production in the DRC and Indonesia, Fastmarkets anticipates that the market will take in an additional 52,000 tonnes of cobalt supply by 2028.
On the demand side, the battery segment will continue to drive growth. In 2023, batteries accounted for 73 percent of global cobalt demand, and according to Fastmarkets, demand from the sector is projected to rise at a CAGR of 12.5 percent between 2023 and 2028. This increase will boost the battery sector's share of demand to 81 percent.
In contrast, demand growth from superalloys and other sectors is expected to be much lower. These segments have estimated CAGRs of 4.4 percent and 2 percent, respectively.
Outside the DRC and Indonesia, cobalt mines have been impacted by weak prices.
“Those low prices that we've seen have really started to threaten the development of western cobalt capacity,” said Cook.
“Already over the last 12 to 18 months, we've seen a US cobalt mine having to be shuttered because of the low price environment — the breakeven cost is far higher than the market price," he added.
In April, cobalt- and nickel-focused Jervois Global (TSXV:JRV,ASX:JRV,OTCQB:JRVMF) suspended final construction and full concentrator commissioning at its Idaho Cobalt Operations (ICO).
“ICO’s mineral resource and reserve is the largest and highest grade confirmed cobalt orebody in the US and when commissioned will represent the country’s only primary cobalt mine supply,” the company said.
“Jervois has determined that not mining ICO cobalt at cyclically low prices, will preserve the optionality and inherent strategic value of ICO for shareholders and key stakeholders including local communities and the State of Idaho. The company also views not mining ICO at current prices is consistent with US Government critical mineral policy objectives.”
ICO isn't the only cobalt endeavor that has sidelined by a changing environment.
In late June, BASF (OTCQX:BFFAF,FWB:BASF) decided against a US$2.6 billion investment in a nickel and cobalt refinery. Although the move was largely attributed to increasing global availability of nickel, cobalt will be affected too.
BASF initially announced the plan with Eramet (EPA:ERA) in 2020, and the refinery project was expected to output 42,000 tonnes of nickel and 5,000 tonnes of cobalt annually for BASF.
The cobalt market saw more stability in late June as some excess supply was absorbed.
“Prices continued their steady decline in June due to persistent oversupply from mines in the Democratic Republic of Congo and Indonesia,” FocusEconomics' July Consensus Forecast reads. “Against this backdrop of low prices, several hedge funds have recently entered the cobalt market as buyers, providing some support to pricing.”
Overall, Fastmarkets expects to see demand for cobalt increase in 2024, but believes this increased demand will not be enough to offset rising supply, leading to another year of surplus.
“(For) alloy grade it’s a little bit different,” said Cook. “We're seeing the opposite in that demand is actually increasing far above the availability of supply.” However, he did note that alloy demand is a small segment of the cobalt market.
“Our research team expects cobalt supply to continue to increase year-on-year, dominated by China. We are expecting China’s refined cobalt supply capacity to increase as well,” said Cook.
While Fastmarkets sees continued price pressure and bearishness in the cobalt industry for the remainder of the year, FocusEconomics has painted a more optimistic picture.
“Prices will surge from current levels by year-end on the back of resilient demand for electric vehicles (EVs), as well as speculative buying from hedge funds and planned stockpiling in China,” its report states. “In the longer term, prices will increase further as the metal is used in electronic applications and lithium-ion batteries, which are widely used in EVs.”
FocusEconomics panelists are projecting that cobalt prices will reach US$34,526 in Q4.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
The NICO project’s receipt of substantial government funding to date and Fortune Minerals’ strong relations with the Indigenous and local communities in the Northwest Territories create a compelling case for investors considering a battery metals play with significant polymetallic potential.
Cobalt is an often-overlooked critical mineral in the transition to clean energy, required to make the cathodes of many lithium-ion batteries used in electric vehicles (EVs), stationary storage cells and consumer electronics. Cobalt is also used in superalloys for the aerospace industry, cemented carbides, cutting tools, permanent magnets, surgical implants, catalysts, pigments and agricultural products.
The global cobalt market is expected to reach a volume of almost 306,000 metric tons by 2028. Cobalt outlook in the long-term is expected to double by 2030 with the EV segment accounting for 89 percent of growth, energy storage at 3 percent and superalloys at 2 percent.
Fortune Minerals (TSX:FT,OTCQB:FTMDF) is a Canadian mining company developing its wholly owned, vertically integrated NICO primary cobalt project in Canada to produce cobalt chemicals for the rapidly expanding lithium-ion battery industry. The NICO mineral reserves also contain 1.1 million ounces (Moz) of gold, 12 percent of global bismuth reserves, and copper as a minor by-product. NICO comprises a proposed mine and mill in the Northwest Territories that will produce bulk concentrates that will be shipped to a planned refinery in Southern Canada. The concentrates from the mine will then be processed into energy and eco-metals for the growing clean energy economy.
NICO is a primary cobalt deposit, but the mineral reserves also contain 1.1 Moz of gold as a countercyclical and highly liquid co-product that can be easily converted to cash. The gold contained in the NICO deposit stands out among other cobalt projects, where the metal is produced primarily as a by-product of copper or nickel.
NICO is also the largest known deposit of bismuth in the world with about 12 percent of global reserves – even though it represents only about 10 percent of the company’s projected revenue from operations at recent metal prices.
The cobalt, bismuth and copper contained in the NICO deposit are all classified as critical minerals by Canada, as they have essential use in new technologies, cannot be easily substituted with other minerals, and because supply chains may be threatened by geopolitical issues.
The mineral reserves for the NICO deposit were estimated in compliance with NI-43-101 and total 33.1 million tonnes (Mt), containing 82.3 million lbs (37,341 tonnes) of cobalt, 1.1 Moz of gold, 102.1 million lbs (46,325 tonnes) of bismuth and 27.2 million lbs (12,296 tonnes) of copper to support a 20-year mine life at a mill throughput rate of 4,650 metric tons of ore per day.
Sums of the combined reserves may not exactly equal sums of the underground and open pit reserves due to rounding errors.
The mineral reserves are based on 327 drill holes plus surface trenches and underground test mining verifying the deposit grades, geometry and mining conditions. Both of Fortune Minerals’ deposits are open for potential expansion, extending the deposits with additional drilling or identifying new zones or deposits.
The Government of Canada is providing funding of up to $714,500 for the planned cobalt sulphate process pilot and other metallurgical test work at the NICO project. Additionally, the Government of Alberta, through the Alberta Innovates, has also approved additional funding contributions of up to $172,670 toward the budgeted program costs under its Clean Resources Continuous Intake Program. The funds will be used to support a mini-pilot at SGS Canada to confirm certain process design criteria and improvements to the NICO project metallurgical processes.
Fortune Minerals also received an C$8.74 million grant from the United States Department of Defense to expand the domestic capacity and production of cobalt for the battery and high strength alloy supply chains. The company recently secured a total of C$17 million financial support from the Canadian and US governments to advance the NICO project.
The company’s other assets include the Sue-Dianne deposit, which has near-surface, copper-silver-gold deposits that can feed into the NICO mill.
The NICO cobalt-gold-bismuth-copper deposit is an IOCG or Olympic Dam-type mineral deposit situated on 5,140 hectares of mining leases, located 160 kilometers northwest of the City of Yellowknife and 50 kilometers north of Whati in Canada's Northwest Territories.
Fortune Minerals has spent more than C$135 million preparing technical, environmental and social studies to support the development of the NICO cobalt-gold-bismuth-copper project. Environmental assessment approval and the major mine permits have been received for the planned facilities in the Northwest Territories. The project is expected to be a reliable North American producer of critical minerals with supply chain transparency and custody control of ethically produced metals from ores through to the production of value-added metals and chemicals.
Mahendra Naik is a chartered accountant and was one of the founding directors and key executives who started IAMGOLD Corporation, a TSX and NYSE-listed gold mining company. As chief financial officer from 1990 to 1999, he was involved in the negotiations of the Sadiola and Yatela mine joint ventures with Anglo American, and the US$400 million project debt financing for the development of the mines. In addition, he was involved in more than $150 million in equity financings including the IPO for IAMGOLD. Naik is currently the chief executive officer of FinSec Services., a private business advisory company and a director and member of the audit and compensation committees for IAMGOLD. In addition, Naik is a director and member of audit, compensation and risk/control committees of FirstGlobalData Limited, Goldmoney Network Limited and Jameson Bank.
Robin Goad is a professional geologist with 30 years of experience in the mining and exploration industries. Before founding Fortune in 1988, Goad worked for large companies, including Noranda and Teck, as a consultant in the resource industry. Goad is a director of the NWT and Nunavut Chamber of Mines and has served as president and director of other TSX-listed mineral exploration and development companies.
Patricia Penney is a chartered accountant with 20 years of accounting and audit experience. Before Fortune, she was a senior manager with Caceis Canada., an alternative fund administrator.
Richard Schryer is an aquatic scientist with more than 25 years of experience in mine permitting, environmental assessments, environmental studies and monitoring. Schryer also worked with Golder Associates.
Alex Mezei is an independent metallurgical consultant with 40 years of international process engineering experience, providing general and specialized services in metallurgical process flowsheet testing, design, development, derisking and implementation. Mezei has been involved in process economics assessment for several projects. Specific technical expertise includes hydrometallurgy, liquid-solid separation, rheology, and mineral processing. Projects and commodities include extraction of cobalt, lithium, nickel, graphite, manganese, as well as base, rare and precious metals. In addition, Mezei provides specialized expertise in recycling, oil sands and carbon capture projects. Mezei is a Qualified Person for the purposes of National Instrument 43-101.
David Knight is a partner with WeirFoulds LLP. David is widely recognized for his more than 30 years of experience. He specializes in securities law, including public and private financings, mergers and acquisitions, stock exchange listings and regulatory compliance and acts for investment dealers and issuers. Knight is a member of the Law Society of Upper Canada.
Troy D. Nazarewicz has 30 years of experience in the capital markets as a portfolio manager with MacDougall, MacDougall & MacTier and in his investor relations role at Fortune. He also worked as a business development manager with a design and marketing firm.
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Sherritt International Corporation ("Sherritt" or the "Corporation") (TSX:S) will release its second quarter 2024 results after market close on July 29, 2024. Senior management will host a conference call and webcast on July 30, 2024 at 10:00 am ET to review Sherritt's second quarter 2024 financial and operational performance.
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Please dial in 15 minutes before the start of the conference to secure a line and avoid delays. Alternatively, listeners will be able to access the conference call via the webcast available on Sherritt's website.
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About Sherritt International
Sherritt is a world leader in using hydrometallurgical processes to mine and refine nickel and cobalt – metals deemed critical for the energy transition. Sherritt's Moa Joint Venture has a current estimated mine life of 25 years and has embarked on an expansion program focused on increasing annual mixed sulphide precipitate production by approximately 20% of contained nickel and cobalt. The Corporation's Power division, through its ownership in Energas S.A., is the largest independent energy producer in Cuba with installed electrical generating capacity of 506 MW, representing approximately 10% of the national electrical generating capacity in Cuba. The Energas facilities are comprised of two combined cycle plants that produce low-cost electricity from one of the lowest carbon emitting sources of power in Cuba. Sherritt's common shares are listed on the Toronto Stock Exchange under the symbol "S".
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Telephone: (416) 935-2451
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Sherritt International Corporation ("Sherritt" or the "Corporation") (TSX: S) is pleased to announce the release of its 2023 Sustainability Disclosures, including its Annual Sustainability Report, Climate Report, Tailings Management Report and Sustainability Scorecard outlining the Corporation's performance on environmental, social, and governance ("ESG") matters.
"Our 2023 Sustainability Report marks Sherritt's 16th year of sustainability reporting, demonstrating how sustainability is embedded into every facet of our business, from our strategic planning to our daily operations," said Leon Binedell, President and CEO of Sherritt. "In 2023, we made significant progress toward our ESG goals and maintained our standing as a preferred supplier of responsibly produced critical minerals among our customers. Looking forward, we are committed to enhancing safety performance across all our operations, further reducing our carbon intensity, and making a lasting positive impact in the communities in which we operate."
Highlights from Sherritt's 2023 sustainability reports include:
Sherritt's 2023 Sustainability Report was prepared with reference to the Global Reporting Initiative's (GRI) and Sustainability Accounting Standards Board (SASB) disclosure standards.
Sherritt's 2023 Sustainability Report, Climate Report, Tailings Management Report and Sustainability Scorecard are available on Sherritt's website at www.sherritt.com .
About Sherritt International
Sherritt is a world leader in using hydrometallurgical processes to mine and refine nickel and cobalt – metals deemed critical for the energy transition. Sherritt's Moa Joint Venture has a current estimated mine life of 25 years and has embarked on an expansion program focused on increasing annual mixed sulphide precipitate production by 20% of contained nickel and cobalt. The Corporation's Power division, through its ownership in Energas S.A., is the largest independent energy producer in Cuba with installed electrical generating capacity of 506 MW, representing approximately 10% of the national electrical generating capacity in Cuba. The Energas facilities are comprised of two combined cycle plants that produce low-cost electricity from one of the lowest carbon emitting sources of power in Cuba. Sherritt's common shares are listed on the Toronto Stock Exchange under the symbol "S".
View source version on businesswire.com: https://www.businesswire.com/news/home/20240611208757/en/
Tom Halton
Director, Investor Relations and Corporate Affairs
Email: investor@sherritt.com
Telephone: (416) 935-2451
www.sherritt.com
News Provided by Business Wire via QuoteMedia
