FinancialBuzz.com News Commentary
According to data by Mordor Intelligence, the global lithium market is projected to grow at a CAGR of 9.33 percent until 2021. The demand for lithium is attributable to rising popularity of lithium-ion batteries, which are widely used for electronic devices and electric vehicles. The rise in lithium-ion batteries has also caused prices for cobalt to rise, as it is one of the key components. According to data compiled by BMO Capital Markets, cobalt prices are expected to rise significantly in the next two years, as demand for batteries in electric vehicles and other devices rises. The firm projects an average cobalt price of $40.50 per pound in 2019 compared to current rates of $36 per pound. Boreal Metals Corp. (TSX-V: BMX), EMX Royalty Corporation (NYSE: EMX), Cruz Cobalt Corp. (OTC: BKTPF), Nemaska Lithium Inc. (OTC: NMKEF), Galaxy Resources Limited (OTC: GALXF)
Benchmark Mineral Intelligence projects electric vehicle sales to take off around 2022 or 2023. Benchmark expects a lithium-ion demand of 500 gigawatt-hours by 2025, as opposed to the current 85 GWh. The heavily increasing demand has caused cobalt price per pound to increase threefold in the past three years alone. BMO explained, ‘This makes cobalt the best performer of the commodities we cover over the past year in terms of price gains, and at current spot market pricing, a market worth $6.6bn per annum.’
Boreal Metals Corp. (TSX-V: BMX) is currently listed on the TSX Venture Exchange under the ticker ”BMX”. Earlier today the company announced the, ‘execution of a definitive agreement (the ‘Agreement’) with EMX Royalty Corporation (‘EMX’) (NYSE American: EMX, TSXV: EMX) for the acquisition of the Guldgruvan cobalt project (‘Guldgruvan’ or the ‘Project’) by Boreal Energy Metals Corp. (‘BEMC’), a newly created and wholly owned subsidiary of Boreal.
The Guldgruvan nr 101 license contains the historic Los Cobalt Mine, one of the better known historic cobalt producers in the region, and is also the region where nickel was first discovered and recognized as an element in 17511. Cobalt, copper, and nickel were mined on the property in the 1600”s to 1750”s. In addition to these metals, gold, silver, zinc, and lead are also present in zones of mineralization. Following the Company”s growth strategy to acquire past producing projects, Guldgruvan, has undergone only limited modern exploration.
‘Boreal continues its exploration project growth strategy with the addition of the Guldgruvan Project. Through the acquisition of two significant past producing cobalt assets, Boreal is well positioned in the region as Scandinavian Battery Companies are moving forward to lead Europe”s emerging battery production sector,’ stated Karl Antonius, President and CEO. ‘Boreal believes the acquisition delivers significant benefits to its shareholders. Guldgruvan complements the previously announced acquisition of Modum, which combined further builds the foundation for Boreal”s strong base metal and cobalt exploration in Scandinavia.’
The agreement with Boreal contains the following commercial terms:
- Subject to regulatory approval, at closing, EMX will transfer its Guldgruvan exploration licenses to BEMC.
- At closing, BEMC will issue to EMX Royalty Corp common shares of BEMC that will bring EMX”s share of equity ownership in BEMC to 5.9%; BEMC will have the continuing obligation to issue additional shares of BEMC to EMX to maintain its 5.9% interest in BEMC, at no additional cost to EMX, until BEMC has raised CDN$3,000,000 in equity. Thereafter, EMX will have the right to participate pro-rata in future financings at its own cost to maintain its 5.9% interest in BEMC. The issuance of BEMC shares to EMX, as set forth in the definitive agreement, is subject to receipt of TSX Venture Exchange approval.
- EMX will be granted an uncapped 3% net smelter return (‘NSR’) royalty on the Project, of which a 1% NSR royalty may be purchased by BEMC on or before the fifth anniversary of the closing date in 0.5% increments for a total of USD$2,500,000 in cash and common shares of BEMC stock.
- EMX will receive annual advance royalty (‘AAR’) payments of USD$20,000, commencing on the second anniversary of the closing, with each AAR payment increasing by USD$5,000 per year until reaching USD$60,000 per year.
- EMX will also be reimbursed for its acquisition costs and previous expenditures on the Project.
- The issuance of BEMC shares to EMX, as set forth in the Agreement, is subject to TSX Ventures Exchange approval.
The 2,383 Ha Guldgruvan cobalt project is located near the town of Los, Sweden. The Project is accessible year-round, with robust infrastructure including paved roads, power, and skilled labour in nearby municipalities. The Guldgruvan nr 101 license contains numerous historical workings, test pits and shallow drill holes in addition to five major mining sites, which were the focus of historical production.
Widespread cobalt-bearing copper and subordinate nickel-zinc-gold-silver mineralization occurs in sulphide disseminations, vein-infill, and shear zones within Proterozoic mafic and felsic metavolcanic rocks at Guldgruvan. The cobalt-bearing occurrences define a series of parallel north-northwest trending zones of mineralization that extend for at least six kilometers across the claim package.’
EMX Royalty Corporation (NYSE: EMX) announced recently the execution of a definitive agreement (the ‘Agreement’) for the sale of the Modum cobalt project (the ‘Project’) in Norway to Boreal Metals Corp. (‘Boreal’) (TSX Venture: BMX). The Agreement provides EMX with additional share equity in Boreal, a 3% NSR royalty on the Project, and advance annual royalty payments. The Modum Project is located in southern Norway”s Modum mining district, ~75 kilometers west of Oslo. The Project partially surrounds the historic Skuterud mine property, which was Europe”s principal producer of cobalt from the late eighteenth through nineteenth centuries.
Cruz Cobalt Corp. (OTC: BKTPF) on January 22 announced that the company has significantly increased its acreage on its 100% owned Purcell cobalt prospects in BC. Cruz has now increased the acreage on the Purcell cobalt prospects from 671 acres to now be 11,821 acres, consolidating the previous two separate Purcell prospects into one much larger contiguous prospect. The company has also just recently completed an airborne survey over the War Eagle and Purcell cobalt prospects in BC and uncovered strong magnetic anomalies (announced January 19, 2017). Management is now working diligently on advancing these two cobalt prospects. Recently, the company also tripled its landholdings surrounding the War Eagle cobalt prospect in BC. Cruz now has a 100% interest in 15,219 acres on the War Eagle cobalt prospect and 11,821 acres on the Purcell prospect. Cruz currently has eight cobalt projects located throughout North America, comprising of four in Ontario, two in British Columbia, one in Idaho and one in Montana.
Nemaska Lithium Inc. (OTCQX: NMKEF) is a developing chemical company whose activities will be vertically integrated, from spodumene mining to the commercialization of high-purity lithium hydroxide and lithium carbonate. On January 8, 2018, the company announced that it has produced and has made available for pick-up by its customer, another 2 tonnes of battery grade lithium hydroxide solution, made from Whabouchi spodumene concentrate. To date, the Corporation has delivered 3 tonnes of lithium hydroxide solution produced from its Whabouchi spodumene concentrate. ‘Cathode producers are primarily concerned with the impurity levels in the lithium hydroxide they receive from suppliers, as these impurities impact the overall performance of the battery. Our lithium hydroxide compares very favorably to that of our peers in the industry and is well within the acceptable specification limits of cathode producers globally. Following discussions with multiple cathode makers, I believe ours is one of the best lithium hydroxide products available today,’ said Guy Bourassa, President and CEO of Nemaska Lithium.
Galaxy Resources Limited (OTC: GALXF) is an international S&P / ASX 200 Index company with lithium production facilities, hard rock mines and brine assets in Australia, Canada and Argentina. On January 16, 2018, the company reported to shareholders its activities for the quarter ended 31 December 2017. The company announced record production of 52,139 dry metric tonnes of lithium concentrate, an increase of 11% over Q3 2017, production for the quarter at an annualized rate of c.209,000 dmt tonnes per annum (‘tpa’) of lithium concentrate, and Record sales of 58,094 dmt of lithium concentrate, an increase of 39% over Q3 2017.
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NEW YORK, February 9, 2018 /PRNewswire/ —