Hotter Than Lithium: Cobalt Prices Soaring On Supply Deficit

LONDON, May 2, 2017 /PRNewswire/ --

Trends, shortages, opportunity; Canadian financier, Wayne Tisdale seems to have a sense for these things. He has done it several times in the past. His current target: Cobalt. Other majors focused on the industry include: Rio Tinto plc (NYSE: RIO), Anglo American plc (OTC: NGLOY), Freeport-McMoRan Inc. (NYSE: FCX), Berkshire Hathaway Inc. (NYSE: BRK-A), Barrick Gold Corporation (NYSE: ABX)

Tisdale's latest venture, Scientific Metals (STM.V; SCTFF) looks to impress once again. This time the target is cobalt, and the goal is a pure play development that could put the U.S. on the cobalt map at a time when the world is desperate for new supply.

Between the electric vehicle (EV) boom and the launch of Tesla's cobalt-hungry battery gigafactory, cobalt is a metal that is already in short supply.

Tisdale's 3 Golden Rules 

#1 Look for early signs of need and shortage in a specific commodity 

With cobalt, this is obvious. Prices are increasing, hedge funds are hoarding physical supplies, and demand keeps increasing.

North America produces only about 4 percent of the world's total cobalt supply-not enough to put a dent in the demand coming from Tesla's new gigafactory in Nevada, which started producing batteries in January.

To add further to the demand, tech giants such as Apple, Microsoft and Samsung are under increasing pressure to source ethical supplies of cobalt. The answer? North-American sourced material.

The bulk of the world's cobalt, mined and brought to market is a by-product of nickel or copper, and when it's not economical to mine either, the cobalt supply picture further tightens.

Major miner Rio Tinto (NYSE:RIO) would agree that this is the hottest metal on the market now, too, and it sees the widening supply gap. That's why it moved to expand exploration in the U.S. in January, but in a copper and nickel play that will produce cobalt as a by-product. Giant Anglo-American (OTC: NGLOY) and Freeport McRoRan (NYSE: FCX), which also produce cobalt as a by-product, are likely eyeing the fast rise of the 'after-thought' metal. As tech giants and hedge funds battle each other for supply, the STM Idaho project targets a 'pure' cobalt play.

Additionally, hoarding has begun. February saw major cobalt acquisition initiatives by hedge funds from Switzerland to China. The hedge funds' stockpiling of cobalt resulted in a rush to secure additional supply, according to a 23 February Financial Times article.

#2 Find overlooked and inexpensive assets in that space 

Cobalt has been generally overlooked. As electric vehicles became mainstream, demand for lithium increased rapidly. Tisdale launched Pure Energy in 2015, when the price of lithium was only around $5,000 per tonne. He watched it increase 450 percent.

But lithium is only one key component of the lithium-ion battery. Cobalt makes up some 35 percent of this mix-see Golden Rule #1: we don't have enough, and what we do have comes from problematic sources such as Democratic Republic of Congo (DRC).

#3 Hire smart people early on, because they will take you where you need to go 

Tisdale and his team at Intrepid Financial have in recent years created $2.7 billion in market value by building and financing 5 companies in completely different industries.

• Rainy River (gold) was worth $1.2 billion at its peak
• Xemplar (uranium) hit $1 billion at its peak
• Ryland Oil (oil and gas) sold for $114 million
• Webtech Wireless (tech) was worth $300 million at its peak
• Pure Energy (lithium) is worth $65 million (and counting)

The Next Chapter: All-American Cobalt

On a daily basis, you hear about revolutionary names in industry, from Elon Musk's Tesla Motors Inc. to EVs and Warren Buffett's Berkshire Hathaway (NYSE:BRK.A), for investing brilliance to billionaire investor George Soros, who boosted his mining shares this year, including a $264-million stake in Barrick Gold Corp (NYSE: ABX).

Tisdale's Scientific Metals (STM.V; SCTFF) acquired the Idaho Iron Creek Project in September, with historic estimates (currently being updated) and encouraging indications that there may be up to 10 million tons of cobalt on the property. This historical exploratory work included 30,000 feet of diamond drilling.

Next door to STM is the only other cobalt property in the US that is slated to come into production, with an estimated 3 million-plus ton of .55 percent cobalt.

With global demand for cobalt set to exceed supply this year and beyond, cobalt is a commodity that warrants investor attention. Tesla's $5-billion battery gigafactory will have doubled the world's battery production capacity by the end of this year, and its demand has just started. The price of cobalt has increased more than 50 percent since November, and is expected to increase further.

Tisdale and Scientific Metals (STM.V; SCTFF) are stepping in to fill the vacuum with a unique all-American cobalt pure play. They could be among the first to put the U.S. on the ethical cobalt map just as battery demand hits fever pitch. Tisdale has been at the beginning of many trends and he's here again-with cobalt.

By James Burgess

Legal Disclaimer/Disclosure from OilPrice.com: This piece is an advertorial and has been paid for. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this Report should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. We make no guarantee, representation or warranty and accept no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Oilprice.com only and are subject to change without notice. Oilprice.com assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this Report.   All content contained herein is subject to the terms and conditions set forth in the original article posted on Oilprice.com and subject to the terms and conditions therein.

DISCLAIMER: OilPrice.com is Source of all content listed above. FN Media Group, LLC (FNM), is a third party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated in any manner with OilPrice.com or any company mentioned herein. The commentary, views and opinions expressed in this release by OilPrice.com are solely those of OilPrice.com and are not shared by and do not reflect in any manner the views or opinions of FNM. FNM is not liable for any investment decisions by its readers or subscribers. FNM and its affiliated companies are a news dissemination and financial marketing solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security. FNM was not compensated by any public company mentioned herein to disseminate this press release.

FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and FNM undertakes no obligation to update such statements.

Contact Information:
Media Contact
E-mail:  [email protected]   
U.S. Phone: +1(954)345-0611

SOURCE OilPrice.com