Anthony Milewski: Electric Vehicle Demand to Drive Cobalt To New Heights
Anthony discusses the electric vehicle market and the metals required in producing batteries. He really focused on cobalt, since it’s a byproduct of nickel and copper mining, and hence there are few primary cobalt deposits. This will create supply side issues as one should expect an enormous demand for electric vehicles. If the cobalt price were to double, there would be only minimal impacts on the overall cost of an electric vehicle.
Lithium is a primary metal with primary deposits, while cobalt is a different animal, with the overwhelming majority of production coming from secondary mine sources. Even at much higher prices for cobalt you would not be building a primary cobalt mine, but would be bound by the prices of other metals. Cobalt price have to go materially higher to incentivize mine development, mines will then take at least three to five years to build.
There are few ways to invest in cobalt. With Cobalt 27 (CVE:KBLT) he is trying to put together an investment grade product for institutions and retail investors. They have 2158 metric tons of cobalt, so are backed by the actual physical. They are planning to raise additional capital, to purchase more physical and acquire producing streams to transition to being a streaming company.
He discusses Cobalt 27’s upside potential when compared to other resource development stocks. In the short term he expects to trade at a premium to net asset value and over time at a multiple, as they transition to a streaming company. When you purchase the stock, you are buying into participation in the cobalt upside, into the physical story, which is underpinned by these assets.