Cobalt

Top 3 Canadian Cobalt Stocks (Updated November 2022)

Cobalt Investing
cobalt periodic symbol
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What are the top cobalt stocks so far in 2022? These TSX- and TSXV-listed cobalt companies have all seen year-to-date share price increases.

Top 3 Canadian Cobalt Stocks (Updated November 2022)
Company Description
1. Sherritt International (TSX:S)

Year-to-date gain: 17.07 percent; market cap: C$198.64 million; current share price: C$0.48

Sherritt International is a miner, producer and refiner of high-purity nickel and cobalt. While nickel is its primary focus, it is still a significant producer of cobalt, and believes both metals are essential to the EV revolution. The company operates a mine in Cuba, as well as a refinery in Alberta, Canada, both of which are part of its 50/50 Moa joint venture with Cuba’s General Nickel Company. The vertically integrated joint venture has a capacity of 35,000 MT of nickel and 3,800 MT of cobalt produced per year.

In February, Sherritt released its 2021 production results and 2022 guidance. It expects to see cobalt production in 2022 in line with its 2021 numbers, and has set guidance of 3,400 to 3,700 MT compared to 2021’s production of 3,526 MT. On March 1, the company announced the appointment of decarbonization expert Chih-Ting Lo to its board of directors, and also named Maryse Bélanger as deputy chair. The focus of these changes is to strengthen Sherritt's commitment to ESG matters.

As a nickel-primary company, Sherritt’s share price has seen movement that reflects nickel hitting an all-time-high. Its share price shot up to reach a high of C$0.82 on March 10, but began moving back down in mid-May and has yet to see those heights again in 2022.

In July, the company released its Q2 results, which it said were driven by higher nickel, cobalt and fertilizer prices. Its Q3 results came in late October, and showed that its portion of finished cobalt production from the Moa joint venture was 419 MT, marginally lower year-over-year, which the company attributes to the mixed sulfides from Moa having a higher nickel-to-cobalt ratio. As part of the results, the company also shared that its board of directors has approved US$50 million for an expansion for Moa.

2. Polymet Mining (TSX:POM)

Year-to-date gain: 16.57 percent; market cap: C$412.99 million; current share price: C$4.08

PolyMet Mining’s flagship project is its NorthMet copper-nickel project, which is also expected to produce cobalt and precious metals. NorthMet is located in Minnesota, US, in the Duluth Complex, and has proven and probable reserves of 290 million MT grading 0.288 percent copper and 0.083 percent nickel. The company is working to secure permits that will allow it to begin mining.

Although PolyMet’s share price performed relatively flatly for the early part of the year, it saw a spike from C$3.74 on March 7 to C$5.06 the following day; the company released no news to accompany this rise. PolyMet fell back down to the C$4 to C$4.50 range in the following weeks, during which time it shared its 2021 financial results and a Q1 business update.

Shares did experience another jump, hitting a year-to-date high of C$5.17, this time following the March 29 news that Senior Vice President Richard Lock was moving on. PolyMet’s share price fell through the second quarter.

On July 20, PolyMet announced the significant news that it was creating a 50/50 joint venture with Teck Resources (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) subsidiary Teck American. The companies' respective NorthMet and Mesaba projects will be under a single management team, an entity named NewRange Copper Nickel. According to a press release, the projects “represent two of the largest undeveloped clean energy mineral resources in the U.S.”

On November 10, the company released its Q3 results. In the release, it updated shareholders on its progress towards closing the Teck joint venture, as well as ongoing litigation.

3. DLP Resources (TSXV:DLP)

Year-to-date gain: 4.76 percent; market cap: C$12.25 million; current share price: C$0.22

Exploration company DLP Resources is focused on base metals and cobalt projects in Southeast BC. It has two wholly owned cobalt projects, the Hungry Creek copper-cobalt-silver project and the Redburn Creek copper-cobalt project. The company also has the Aurora porphyry copper-molybdenum project in Peru.

DLP Resources started the year by appointing a new CEO, the company’s president Ian Gendall. Gendall retained the president position, and the previous CEO, Jim Stypula, became executive chairman. Much of the company’s 2022 exploration has been focused on its non-cobalt projects. However, on July 28, DLP Resources announced the commencement of drilling at Hungry Creek, with 1,800 meters over six holes planned. As part of an exploration update in mid-September, DLP Resources shared that the drilling was complete and the company was awaiting results.

The company’s share price has largely hovered between C$0.20 and C$0.25 in 2022, and saw a year-to-date high of C$0.26 on September 26. On October 4, DLP announced the results from its AGM, at which all matters were approved, as well as a C$2 million non-brokered private placement offering. The proceeds from the offering will go towards further exploration at Aurora after the company got its first results from the project in late September.

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 Democratic Republic of Congo (DRC), which was responsible for producing 120,000 MT of the material in 2021. For perspective, the second largest cobalt-producing country, Russia, had reported output of 7,600 MT the same year; third place Australia produced 5,600 MT.

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.

Click here to read the previous top cobalt stocks article.

Cobalt prices performed strongly in 2021, and in March through May of this year experienced highs not seen since 2018, reaching US$82,000 per metric ton (MT). However, prices plunged in late June and early July.

Sitting at US$51,995 per MT on November 21, cobalt is down year-to-date, and that price level has remained stable since late August. Although they're back down at the moment, it's worth keeping in mind that cobalt prices are still up by nearly US$20,000 over the beginning of 2021. The battery metal is an essential part of the lithium-ion batteries used in electric vehicles (EVs) and the clean energy movement, and experts expect rising EV purchases to continue driving demand for cobalt.

“A lot of discussions looking at lithium-iron-phosphate cathodes are a headwind for cobalt, but there are still a lot of offtake agreements in place now, there are still automakers which are looking at including cobalt in their chemistries going forward, with nickel-cobalt-manganese being one of the favored chemistries in the western world,” Robert Searle of Fastmarkets said.


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 November 16, 2022, using TradingView’s stock screener, and all companies listed had market caps above C$10 million at that time.

1. Sherritt International (TSX:S)

Year-to-date gain: 17.07 percent; market cap: C$198.64 million; current share price: C$0.48

Sherritt International is a miner, producer and refiner of high-purity nickel and cobalt. While nickel is its primary focus, it is still a significant producer of cobalt, and believes both metals are essential to the EV revolution. The company operates a mine in Cuba, as well as a refinery in Alberta, Canada, both of which are part of its 50/50 Moa joint venture with Cuba’s General Nickel Company. The vertically integrated joint venture has a capacity of 35,000 MT of nickel and 3,800 MT of cobalt produced per year.

In February, Sherritt released its 2021 production results and 2022 guidance. It expects to see cobalt production in 2022 in line with its 2021 numbers, and has set guidance of 3,400 to 3,700 MT compared to 2021’s production of 3,526 MT. On March 1, the company announced the appointment of decarbonization expert Chih-Ting Lo to its board of directors, and also named Maryse Bélanger as deputy chair. The focus of these changes is to strengthen Sherritt's commitment to ESG matters.

As a nickel-primary company, Sherritt’s share price has seen movement that reflects nickel hitting an all-time-high. Its share price shot up to reach a high of C$0.82 on March 10, but began moving back down in mid-May and has yet to see those heights again in 2022.

In July, the company released its Q2 results, which it said were driven by higher nickel, cobalt and fertilizer prices. Its Q3 results came in late October, and showed that its portion of finished cobalt production from the Moa joint venture was 419 MT, marginally lower year-over-year, which the company attributes to the mixed sulfides from Moa having a higher nickel-to-cobalt ratio. As part of the results, the company also shared that its board of directors has approved US$50 million for an expansion for Moa.

2. Polymet Mining (TSX:POM)

Year-to-date gain: 16.57 percent; market cap: C$412.99 million; current share price: C$4.08

PolyMet Mining’s flagship project is its NorthMet copper-nickel project, which is also expected to produce cobalt and precious metals. NorthMet is located in Minnesota, US, in the Duluth Complex, and has proven and probable reserves of 290 million MT grading 0.288 percent copper and 0.083 percent nickel. The company is working to secure permits that will allow it to begin mining.

Although PolyMet’s share price performed relatively flatly for the early part of the year, it saw a spike from C$3.74 on March 7 to C$5.06 the following day; the company released no news to accompany this rise. PolyMet fell back down to the C$4 to C$4.50 range in the following weeks, during which time it shared its 2021 financial results and a Q1 business update.

Shares did experience another jump, hitting a year-to-date high of C$5.17, this time following the March 29 news that Senior Vice President Richard Lock was moving on. PolyMet’s share price fell through the second quarter.

On July 20, PolyMet announced the significant news that it was creating a 50/50 joint venture with Teck Resources (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) subsidiary Teck American. The companies' respective NorthMet and Mesaba projects will be under a single management team, an entity named NewRange Copper Nickel. According to a press release, the projects “represent two of the largest undeveloped clean energy mineral resources in the U.S.”

On November 10, the company released its Q3 results. In the release, it updated shareholders on its progress towards closing the Teck joint venture, as well as ongoing litigation.

3. DLP Resources (TSXV:DLP)

Year-to-date gain: 4.76 percent; market cap: C$12.25 million; current share price: C$0.22

Exploration company DLP Resources is focused on base metals and cobalt projects in Southeast BC. It has two wholly owned cobalt projects, the Hungry Creek copper-cobalt-silver project and the Redburn Creek copper-cobalt project. The company also has the Aurora porphyry copper-molybdenum project in Peru.

DLP Resources started the year by appointing a new CEO, the company’s president Ian Gendall. Gendall retained the president position, and the previous CEO, Jim Stypula, became executive chairman. Much of the company’s 2022 exploration has been focused on its non-cobalt projects. However, on July 28, DLP Resources announced the commencement of drilling at Hungry Creek, with 1,800 meters over six holes planned. As part of an exploration update in mid-September, DLP Resources shared that the drilling was complete and the company was awaiting results.

The company’s share price has largely hovered between C$0.20 and C$0.25 in 2022, and saw a year-to-date high of C$0.26 on September 26. On October 4, DLP announced the results from its AGM, at which all matters were approved, as well as a C$2 million non-brokered private placement offering. The proceeds from the offering will go towards further exploration at Aurora after the company got its first results from the project in late September.

FAQ 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 Democratic Republic of Congo (DRC), which was responsible for producing 120,000 MT of the material in 2021. For perspective, the second largest cobalt-producing country, Russia, had reported output of 7,600 MT the same year; third place Australia produced 5,600 MT.

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.

Don’t forget to follow us @INN_Resource for real-time news updates!

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

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