NEW YORK, November 17, 2017 /PRNewswire/ --
Cobalt, a metal somewhat overlooked by investors, is a critical component of lithium-ion batteries used in mobile devices and essential for the operation of electric vehicles (EVs). The spot price of cobalt has experienced an increase of 150 percent since the start of 2016, largely as a result of the exponential growth in the adoption of mobile technology in emerging economies. However, the real surge in global demand for cobalt will come from the automotive industry as more countries turn away from fossil fuel-driven cars to electric vehicles. To make the most of this surge in demand, Quantum Cobalt Corp. (CSE: QBOT) (FRA: 23B) (QBOT Profile) is focusing efforts on developing its Canadian cobalt resources centered near Cobalt, Ontario.
• China, Britain and France phasing out cars driven by fossil fuels in favor of alternatives
• Electric vehicles predicted to be as affordable as cars running on gasoline by 2022
• Cobalt demand projected to surge from current 2,000 tons to 300,000 tons by 2030
• Cobalt price forecast to rise from $60,000 per ton to $100,000 per ton by 2030
The greatest demand for the metal is likely to come from China, currently the world's top consumer of cobalt and its largest automotive industry. China recently announced a requirement that 20 percent of all cars sold by 2025 must operate on alternatives to fossil fuels. Britain and France have followed suit, declaring a ban on the sale of cars operating on fossil fuels by 2040 (http://nnw.fm/3uWhW). Tesla (NASDAQ: TSLA) is the leading manufacturer of EVs, making a significant contribution to the 2 million electrical vehicles on roads today. Other car manufacturers are scrambling to catch up. General Motors (NYSE: GM) has announced plans to launch a range of 20 EVs by 2023, while Volvo (OTC: VLVLY) is converting its technology to electric power by 2019. Volkswagen AG ADR (OTC: VLKAY) plans on investing $84 billion in car and battery production for the manufacture of 300 EV models by 2030. However, China will remain the world's largest consumer and producer of EVs for the foreseeable future. Consumers there bought 507,000 EVs in 2016, an increase of 53 percent over the previous year. That's double the sales in Europe and triple those sold in the U.S. From the current adoption rate of 1 percent of its automotive market, China is expected to see a 12 -fold increase in the number of EVs on its roads in five years' time.
Batteries account for 33 percent of the cost of manufacturing an electric vehicle. Bloomberg reports that the price of lithium-ion batteries fell by 35 percent in 2015 and is on a downward trajectory, which is predicted to make EVs as affordable as cars driven by fossil fuels by 2022 (http://nnw.fm/vzP0b). Bloomberg also predicts that by 2040, electric vehicles will account for 35 percent of all new vehicle sales.
The major problem is that all these projects demand more cobalt than the world can currently supply. Over 95 percent of the world's cobalt is mined as a by-product of nickel and copper. As prices of these two metals dropped in recent years, many mining companies cut production, contributing to a rising global cobalt deficit. MacQuarie Bank predicts a cobalt deficit of 885 tons in 2018, over 3,200 tons in 2019 and more than 5,300 tons in 2020. Quantum Cobalt Corp. (CSE: QBOT) (FRA: 23B) is positioning itself to take advantage of this market shortage by focusing efforts on the development of its reserves in Canada. Currently, over 50 percent of the world's cobalt is mined in the Democratic Republic of Congo (DRC). The DRC presents mining companies with several ethical issues to contend with, including forced and child labor. The country is also affected by armed conflict and political instability, increasing the risk of investment. Consequently, several mining companies have divested their interests in the DRC and are turning to North America to develop alternative, safer and more ethical mining operations.
Quantum Cobalt has concentrated its efforts in the Cobalt Belt, centered near Cobalt, Ontario. Its Nipissing Lorrain Cobalt Project has produced 16,500 pounds of cobalt and 5,500 pounds of silver in the past, and historic samples show cobalt mineralization of one to 10 inches in this mine. Past assays have shown an unusually high grade of 22 percent cobalt in this play, which is exceptional when as little as 0.5 percent is deemed economically viable. The Rabbit Cobalt Project, located 55 kilometers north of Cobalt, has a rich history of both cobalt and gold production, and returned an historic assay of 8.76 percent cobalt. Quantum Cobalt is intent on conducting mapping, prospecting and sampling focused on the mineral showing on the Rabbit Lake Occurrence. Roughly 37 kilometers south of Cobalt is the company's Kahuna Cobalt Project, which comprises 77 claims over an area of 1,200 hectares and shows historic cobalt mineralization.
The company is geared up to proceed with imminent exploration and development of these properties. On October 25, 2017, the company announced that it had deployed field crews to conduct first pass exploration on both Kahuna and Rabbit Lake properties. This preliminary work entails prospecting, geologic mapping, geochemical surveying and sampling to locate and delineate mineralized structures.
Quantum Cobalt is led by an executive team of industry veterans and innovators. Its CEO, Greg Burns, has more than 22 years of experience in mineral exploration, holding several executive and operational management positions with mining and exploration companies in both Canada and Australia, including Goldstream Mining and Platinum Australia. He was previously managing director of Xenolith, subsequently Coalspur Mining Ltd and taken over by the Cline Group in 2015. Burns also headed up the mergers and acquisitions division of Capital Investment Partners, an investment bank in Western Australia. Director Jerry Huang has held several executive positions with prominent mining companies, including TNR Gold and International Lithium, which received IPO funding from the largest battery company in China. Huang has extensive knowledge and experience in drilling and exploration. Quinn Field-Dyte, director, has over 10 years of experience in the financial industry and currently serves on the boards of several companies in the mining and minerals industry that are listed on the TSX Venture Exchange.
Cobalt is in short supply and is a critical element used as the cathode in lithium-ion batteries, making up 35 percent of the component mix. Current pricing of the metal is expected to soar with Bloomberg forecasting an increase to almost $100,000 per ton by 2030. A massive surge in demand for cobalt is part of that forecast, predicting global growth from the 2,000 tons used now to a startling 300,000 tons in 2030. This represents phenomenal growth in a market where Quantum Cobalt is ideally placed to meet future demand, increase revenues and develop outstanding shareholder value.
Other BIG players to keep your eye on:
Tesla, Inc. (NASDAQ: TSLA) traded over 5,757,708 shares and closed at $312.50 yesterday. Tesla released its financial results for the third quarter of 2017 by posting the current Update Letter on its website. Please visit http://ir.tesla.com to view the letter.
General Motors Company (NYSE: GM) traded over 11,234,942 shares and closed at $43.60 yesterday. GM has leadership positions in the world's largest and fastest-growing automotive markets. GM, its subsidiaries and joint venture entities sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang, and Wuling brands.
Volvo AB ADR (OTC: VLVLY) traded over 14,987shares and closed at $19.27 yesterday. The Volvo Group has been conducting research into autonomous transport solutions for several years. The company has demonstrated concept vehicles for applications in confined areas like mines and quarries. Now Volvo Group takes the next step towards the future with an autonomous concept truck for hub-to-hub transportations in semi-confined areas like harbours and dedicated lanes on highways.
Volkswagen AG ADR (OTC: VLKAY) traded over 117,742s hares and closed at $ 37.78 yesterday. Volkswagen, together with its subsidiaries, manufactures and sells automobiles primarily in Europe, North America, South America, and the Asia-Pacific. The company operates through four segments: Passenger Cars, Commercial Vehicles, Power Engineering, and Financial Services.
For more information about the Quantum Cobalt please visit: Quantum Cobalt (CSE: QBOT)
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