Extraordinary Future of Energy (Part 4 - Cobalt)
Published in August 15, 2017on
00:00:05 We're next up we're going to talk about Cobalt. The first question is hopefully everyone is read and is aware that Cobalt is very special. It comes usually as a by-product. It's hard to invest in it in a company. Where is the future of Cobalt going to come from?
00:00:23 I think that's a very good question and it's it causes a lot of problems I think in the future because people are in Germany for what I can say they are kind of critical of electric vehicles even though they love the idea of electric vehicles and there are big fans of it. Germany got so green about the last two decades they have wind power, solar power. I think electric vehicles very well in there.
00:00:51 I think over the next couple of years there are only five new cobalt mines being projected to come online and adding maybe 50,000 tons of cobalt per year and it's certainly not enough for to support a couple of millions of electric vehicles over the next year's. It's problematic for sure where the Cobalt is going to come from because the people in Germany also there they criticize with the electric vehicles that that range is very important.
00:01:23 We're not going to buy electric vehicles if the range is like only a few hundred kilometers. They at least want 400 or more than 500 kilometers of range. In order to get range in an electric vehicle you certainly need a Cobalt could do so if you do less Cobalt in a battery you get less range. The big question is the where's all the Cobalt going to come from. The world cannot produce enough Cobalt right now on and in the future to support the worldwide production of even a few millions electric vehicles. So it's automatic.
00:02:01 Gianni Kovacaic: Let's go through some slides here just if you guys can see this down here. I'm showing you here vehicle sales last year. You see that. All of the blue arrow, blue arrow is what I want you to follow so basically last year 1 percent of car sales were full electric mostly in China. We'll look at it and they say well when is that going to be an impact? We're talking about batteries here, okay.
00:02:22 The next thing I'm going to show you effectively is the power wall. Now this is the version two. This is for your house. This battery now cost $5,800. It's two of the old one combined and the so called inverter is built in. Why am I showing you this? If you look at this picture of the Tesla Solar Roof five million roofs are installed or replaced new every single year. Look how strong they are. They're indestructible.
00:02:59 Now why am I showing you this? We're going to talk about this house here. This is the house of the future. It has an electric car. It has a solar roof and it has a home battery. How much impact and I ask you this question can Cobalt be substituted out of some of these batteries because it's so scarce, Frank?
00:03:27 Frank Basa: It's kind of a hard question to answer. I looked at the overall picture and it seems to me everybody has a different approach or answer on how much cobalt or even cobalt required in the batteries. As far as I know I have to agree that without cobalt the lithium-ion battery basically is not very effective or very efficient.
00:03:55 We can come on late to the equation like you came late today to the lithium equation. We never thought to be such a big demand for cobalt. A few weeks ago were actually at a mines and money show in Hong Kong and from the statistics we read. They really don't connect with the real demand for cobalt. There's going to be a very large demand for cobalt. I don't see cobalt being able to be factored out of a lithium ion battery and I really don't know where the cobalt is going to come from.
00:04:26 There is not enough for cobalt to be produced and meet the demand. We just don't see it. Actually right after this conference we're heading back to Hong Kong to China to Japan to meet with actual end-user. Reason we're doing that we're kind of surprised when we were there originally in Hong Kong the interest. Actually they came to us five years ago at a PDA conference. PDAC conference in Toronto and five years ago it was a lawyer representing a Japanese and South Korean interest and they basically said can you produce 25 metric tons of cobalt a day.
00:05:06 We’ll build a mill for you, we’ll build a refinery for you and that kind of indicated them, we're still early stage, we just acquired some properties and the properties we acquired are the cobalt camp. The cobalt camp itself which most people not aware of the primary metal is cobalt. Well most of the other deposits which are copper or nickel, it's a secondary metal.
00:05:28 In a cobalt camp although it's only silver has been produced over the years the primary metal is cobalt. I think it’s [inaudible 0:05:36] stage for me to say how much cobalt we really need or how much we can really take out of a battery. I don't see the Cobalt and number one to be taking out of a lithium-ion battery and actually I do not see where the cobalt is going to come from. Even from the DRC.
00:05:52 It's just not enough of cobalt.
00:05:56 Gianni Kovacevic: By a show of hands in the crowd who here is interested in investing in cobalt. Is it something that it's topical? Okay so Stephan what do you think? You come from Germany. You have a strong industrial chemicals industry there and certainly cobalt is something that is already fabricated and such. How are these people can allocate capital to the sector?
00:06:18 Stephan Bogner: That’s specifically in Germany?
00:06:20 Gianni Kovacevic: No just in general because it doesn't just matter if it's a junior with cobalt in the name that's not the point it has to be a project of merit that technical people can point to. I mean maybe they should just invest in Glencore or something like this to be safe.
00:06:34 Stephan Bogner: Yes I mean it's a very good question where to invest and I mean with all those producers you certainly may have a good chances with the big ones. I think as the price goes up now and the demand goes up and there's no way around Cobalt I think there will be also some juniors developing some deposits. If they have a good grades I think they will do very well and they can decouple from the resource space or even from lithium space and they do very well.
00:07:06 I'm following mostly only junior companies that are in the discovery stage and following like three or four companies and I'm happy with that and I'm very optimistic that they will do well.
00:07:19 Gianni Kovacevic: Can you give us 60 seconds on your company? Just why is it so special?
00:07:23 Frank Basa: The company itself that’s actually in a cobalt camp it's actually a former producer that was actually operated [inaudible 0:07:29] mines in the 80s. I actually work for [inaudible 0:07:32] minds as a metallurgical engineer for six years. Management changed, the president passed away, the asset became available. We acquired it. We spent four million on it.
00:07:42 We found significant cobalt and silver values. We're probably the most advanced assets or property in the cobalt camp. Cobalt camp itself is huge. It's about 180 kilometers in diameter. At one time 108 mines in the area actually there's more Australians in the cobalt camp than Canadians and I think everybody in that area will find Cobalt because it's primary metal.
00:08:08 We've moved ahead with our project that we've got [inaudible 0:08:12]. We've got our advanced exploration permit and now we're looking for buyers for our product. We have [inaudible 0:08:20]. It's been permitted. We can take a bulk sample out of it. We've already done the drill program.
0:08:25 We're doing a second drill program. We're going like I said to Asia after this conference to see what is the demand and right now we're also looking at recycling in lithium-ion batteries to get a secondary source of cobalt to the market. It's kind of a very advanced project still early stage. We’ve managed to do two private placements. A little more aggressive than we thought when the people came in.
00:08:49 Both are oversubscribed. We've raised over 2 million dollars in less than – in less than two months.
00:08:57 Gianni Kovacevic: These people know. Are you looking for more capital because maybe they don't want to invest in a company that's going to be doing a financing six weeks from now?
00:09:04 Frank Basa: We won't do any more financings. What happened was some of these people financed my other projects and we didn't know they're interested in Cobalt. We opened up the financing for a secondary group. We'll try to close it off so we're not going to look for any more money. We’ll looking money of course at a future date once we have a better feel for the market. What the demands for the Cobalt will be and who from the Asian community either the Japanese, Chinese or South Koreans will come in.
00:09:34 It's actually a very large project. Originally we designed this thing to be only a silver asset but like I said primary metal here is cobalt, silver is a secondary metal.
00:09:44 Gianni Kovacevic: We're just running at a time here guys it's 5:30. I just want to give you anecdotal information on the hub -- oh the symbol sorry. We were going to get to that in the end but you could give them [inaudible 0:09:53].
00:09:53 Frank Basa: The symbol is a C and CSR so it’s Castle Silver Resources.
00:10:02 Gianni Kovacevic: If you look at this house here this is going to change this is the house of the future. There are five million roofs in America only that are either installed new or renovated. The average American house decades had about 400 pounds of copper. People say well when this house is off-grid what happens to the copper? In distribution you have copper. Well this house will have in excess of a thousand pounds of copper as a standalone unit. Just because it's off-grid it still requires more copper.
00:10:34 The math is going to come in how much lithium is in the house between the battery in the car. How much cobalt is in the house between the battery in the car and how this will change? You as a consumer are going to win and this will be consumer led. I also -- I will say I've invested in a cobalt company as I say it I just want to temper everyone it's a punt. I like the team, I like the fact they're motivated, it's cheap but it's risky.
00:11:00 If you want to follow it, I love the people involved and it's called global energy metals. It just IPOed, trading at $0.15, GEMC, use them for education more than anything else. Chris Barry is involved. There’s a lot of good guys that have an interest here. Look at it. Go to their website. If you recognize any of the names ask them what they think and why they are attached to it.
00:11:26 I simply own the shares. I wanted exposure to Cobalt. Didn't know how to find it but I'm doing more work and I will doing analysis. On that note we look at these bubbles and hopefully are more prepared to you know keep learning but focus on the ones that are getting bigger and smaller. Of course I think copper is going to be the most interesting one and for that reason you probably want to read my book about copper.
00:11:50 If you're a copper bank shareholder I will give you a hardcover copy otherwise you're happy to have my paperback edition and this is complimentary for anyone that would like to read my book. Thank you everyone happy investing and wear sunscreen today because it's hot.