Forgotten Battery Metal To Deliver
After lithium plays have soared to the stratosphere, what’s the next big thing in the clean energy revolution?
With a major supply bottleneck now developing, experts agree it’s cobalt…
…And that Global Energy Metals Corporation (GEMC.V) is positioned perfectly as the bull market for battery metals rolls on.
Dear Fellow Investor,
Want proof that the clean energy trend will keep making fortunes for investors?
Consider these facts: In 2016, Tesla sold over 76,000 vehicles. General Motors sold over 10 million. And yet they have roughly the same market cap. In fact, lately, the market has been saying that Tesla is worth more than GM.
Clearly, the investment world is betting on the future of electric vehicles like the ones Tesla specializes in. And the manufacturing world is priming itself for the explosion. “Gigafactories” dedicated to the production of the lithium ion batteries on a massive scale are popping up like mushrooms around the world.
And as factories race to secure the supply chains that will feed their production lines, junior mining companies specializing in lithium have become the trade du jour in the resource world.
Take all the attention that Tesla is drawing…combine that with the burgeoning market for batteries as a smart grid solution for renewable sources of energy…and you have the makings of a bull market for all things related to the production of lithium ion batteries.
Now…The Cobalt Story
Which leads me to the story of cobalt, the forgotten metal in the battery boom.
While lithium plays have been garnering all the attention, relatively few appreciate that cobalt is perhaps “the” critical component of battery production.
In fact, due to a couple of key issues particular to the cobalt market, it is the main bottleneck for those gigafactories.
Consider this: 95% of cobalt production comes as a by-product of copper and nickel mines. That means it’s very difficult, if not impossible, to ramp up production in reaction to cobalt supply shortages.
And with the supply picture constrained for both nickel and copper, a reliable supply of cobalt is hard to find in any case.
Note my emphasis on the word “reliable.” In truth, the Democratic Republic of Congo produces more than half of the world’s cobalt every year. But this war-torn country is notorious for supply disruptions, and many battery manufacturers don’t want to be perceived as a buyer of conflict minerals.
Bottom line: It’s very likely cobalt production will actually fall as prices and demand continue to rise.
These supply constraints have opened the door for companies that specialize in cobalt and that can offer supply chain reliability to their offtake partners.
In other words, they’ve opened the door for companies exactly like Global Energy Metals Corporation (GEMC.V).
A Key Deal
If you like to get in early on emerging opportunities, you’ll love Global Energy Metals, which launched into life as a public company just a few months back.
The management team behind GEMC, however, has a decade-long track record of working with downstream partners on cobalt supply chain issues.
For proof of that fact, one need look no further than the innovative deal it recently cut with Beijing Easpring Material Technology.
Easpring supplies five of the world’s six largest lithium battery manufacturers. Recognizing the need to diversify its supply chain for battery cathode (of which cobalt is a critical component), the Chinese company has stepped in to provide Global Energy Metals with project finance support and a ready-made buyer for the cobalt supplies it is securing.
The deal provides GEMC with the resources to build a portfolio of cobalt-intensive projects. In the process, it can establish itself as one of the few pure play cobalt stories on the market.
Our Chance To
Beat The Market
To The Punch
GEMC made its first big splash on the acquisition front recently with a deal to acquire the Millennium cobalt project in Australia’s famed Mount Isa district.
The project is surrounded by mining, transport and processing infrastructure and comes with an historical inferred resource measuring 3.1 million tonnes grading 0.14% cobalt, 0.34% copper and 0.12 g/t gold.
With Millennium in the fold, GEMC now has a second cobalt-focused project to go with its Werner Lake cobalt mine in Ontario. Werner Lake is a past-producing cobalt mine in Canada’s premier district for cobalt production. Both of its main targets remain open at depth and along strike.
It’s all part of a coordinated strategy to stake out one of the sector’s few pure-play cobalt stories.
The price of cobalt has already more than doubled (from $10/pound in early 2016 to $24/pound today), but that move is but a taste of what’s to come once all these gigafactories for lithium ion batteries come online and demand for component minerals like cobalt goes through the roof.
And when it does, there will be Global Energy Metals, offering the market a cobalt-focused way to profit from the clean energy revolution. Cobalt may be the forgotten battery metal for now, but as a key bottleneck in battery production, it won’t stay that way for long.
Investors who want to beat the market to the punch will want to build a position in Global Energy Metals now.
Global Energy Metals Corporation
GEMC.V (Toronto Venture Exchange)
All the best,
Publisher, Gold Newsletter
CEO, the New Orleans Investment Conference
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