First Cobalt Corp. [FCC-TSXV; OTCQB-FTSSF; FCC-ASX] recently enhanced its position as a pure-play North American cobalt company by acquiring all of the issued and outstanding shares of US Cobalt Inc. [USCO-TSXV, USCFF-OTCQB].
The deal puts First Cobalt in a position to benefit from protectionist trade policies rather than being damaged by them, according to a report by NetworkNewsWire that featured First Cobalt.
The report said that’s because First Cobalt has gained control of US Cobalt’s Iron Creek Project in the Idaho Cobalt Belt and it is now looking ahead to producing minerals closer to America’s major hubs of electric vehicle manufacture in areas such as California and Michigan.
“The acquisition of an American asset is particularly important, given that Canada is among the companies targeted by recent U.S. mineral tariffs,” the NetworkNewsWire report said.
With the only permitted cobalt refinery capable of producing battery-grade material in North America, the enlarged company is set to become a leader in North American cobalt. (The refinery is located about 5 km east of Cobalt, northeast Ontario).
“We foresee a shortage of cobalt over the next five years, yet there are few companies doing significant work to identify new sources of supply,” said First Cobalt President and CEO Trent Mell.
“This transaction creates a larger platform to discover and develop cobalt projects for the growing electric vehicle market by combining high quality North American assets in two of the best cobalt jurisdictions outside of the DRC [Democratic Republic of Congo],” Mell said.
Acquiring US Cobalt also strategically positions First Cobalt as a leading non-Democratic Republic of Congo (DRC) cobalt company. The combined company will have projects in Ontario and Idaho, which, once they reach the production stage, could be major cobalt suppliers for the electric vehicle market, which now depend mostly on supply from the DRC.
Readers should know that NetworkNewsWire is a multifaceted financial news and publishing company that counts First Cobalt among its clients.
On Wednesday, First Cobalt shares eased 2.6% or $0.02 to 75 cents on volume of 1.36 million. The 52-week range is 47.5 cents and $1.65.
Iron Creek is located in the southeast portion of the Idaho Cobalt Belt. It was discovered in the 1940s and has been explored by a number of companies, including Hanna Mining and more recently, Noranda Exploration Inc. Previous operators completed 30,000 feet of diamond drilling and 2,000 feet of underground drifting.
US Cobalt has spent US$4 million on the property, which contains an estimated resource of 1 million tonnes averaging 0.61% cobalt and 0.30% copper. But due to the age of geological work that was used to arrive at these estimates, they do not comply with NI 43-101 standards of compliance.
It means that more drilling work will need to be carried out in order to confirm the validity of these estimates.