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First Cobalt (TSX-V: FCC) CEO Trent Mell on Latest Results: High Grades, Broad Mineralization, & Near-Surface Cobalt and Silver

February 8, 2018

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is President and CEO of First Cobalt (TSX-V: FCC)(OTC: FTSSF), Mr. Trent Mell. Trent, how are you this afternoon?

Trent Mell: Hey, I'm great. Thanks, Gerardo, for having me back on.

Gerardo Del Real: I'm glad to have you on. Thank you for taking the time. I wanted to have you on because you've had a series of consecutive releases that have demonstrated different things. And I know that the releases, to me, in my eyes, were positive in the sense that you have broad mineralization to go with some high-grade stuff, but you've also found a lot of near-surface silver and cobalt outside of the original veins, the historic underground mining operations. I wanted to backtrack a bit and just have you update us first on what the thesis going into this exploration program was, and then we can talk a bit about what you're seeing in it and how you've met that.

Trent Mell: Yeah, I appreciate the opportunity. We certainly have received a lot of kudos from people in our industry for some of our recent results, but I'll admit, a little bit of confusion in the market, because as our story evolves, we have moved away from just selective sampling. Us and other juniors, as you start out in a property, you start to look for the best stuff. You get a chip sample or a grab sample off surface, and you're showing some spectacular grades in the cobalt world, you know, 1%, 2%, 4% cobalt, when what you're mining around the world is 0.1, 0.2, 0.3%, and so we've gone beyond the target identification to drilling. The only way you're going to find a mine is if you drill it.

The exciting thing for us is that we are starting to see not just high-grade samples, but we are starting to see, albeit lower grade, we were starting to see multi-meter intercepts of cobalt and silver. And that's what gets really exciting for me in terms of identifying the new mine, but we've had some good news in the last three press releases. And I'm not sure if we relayed that in a successful manner with the retail investor.

Gerardo Del Real: Wonderful. Trent, tell me what you've been most happy about. Obviously, you have drilling ongoing as we speak, and again, you have different objectives, so can you just go over briefly what the objectives for 2018 are, and it's early still, obviously, but how the success early on has met those objectives?

Trent Mell: Okay, yes. The three objectives. One was to show that this 100-year-old silver camp, now known today as the cobalt camp, hosts cobalt mineralization. We did that pretty early with some surface sampling, so we checked that box very early in the campaign. People recognize that we identified and I guess validated the fact that we have silver-rich areas of this camp, cobalt-rich areas, and I think people are now taking that as a given.

Checkbox number two for us was to show that we've got disseminated mineralization. By that I mean in the old days, the olden days, perhaps, they would have mined these things as underground veins until you find a big high-grade vein, preferably silver-rich, and they would just follow these things down. In modern times, it's a lot more effective, a lot cheaper, to do big bulk mines, and by that, you're not just taking the mine's vein, but you're taking everything around it. But in order for that to work, you need to show that you've got mineralization, not just the high-grade stuff in the vein, but you've got lower-grade stuff all the way around it. That's what these drill holes have shown.

The third checkbox for us, same drill results, are also demonstrating that this mineralization is near surface, 15 or 20, 25 meters below surface. That means these things would be amenable to big open pit mines, as opposed to the more costly underground mining operations.

Those last two points, we outlined them, I think, in our own fashion by issuing results in the last three press releases, but it makes it very exciting for the rest of the year, as we start to drill out not just the three targets we're on now, but some 10 others across the camp.

Gerardo Del Real: You're on three targets, you plan on drilling 10 others, is that correct?

Trent Mell: That's correct, yeah. We were in a small little footprint last year as we were buying two other companies and really consolidating half of this camp. And so, as we turn the page on 2018, we've got some 13 targets that we're drilling. We've doubled our team, we've more than tripled our budget, and so it's going to be a very, very active year. And the idea is let's drill them all out, these 13 at least. Let's find the best ones, and then we can focus on one or two of them, with the view of finding the next cobalt mine here in Canada.

Gerardo Del Real: Perfect. Perfect. How important has it been that you're finding cobalt and silver near surface, but outside the veins that were the focus of the historic underground mining operations?

Trent Mell: Yeah, the template I took into this camp is, well, there's two gold mines nearby. There's the Canadian Malartic Mine, which is a joint venture between Agnico Eagle and Yamana, and then there's the Detour Lake Mine, which is Detour Gold. These are templates for me because these are old underground workings. In one case, three different mines that were deemed exhausted, and abandoned for decades. They came back, and instead of going back underground, they just took everything, and it became what we call a Super Pit. That's the mindset we brought into this camp, is that you don't go from grade to no grade. That to me is exciting.

The fact that you've got silver with cobalt makes this fairly unique around the world. Most of the cobalt today, 98% of it, cobalt is coming out of copper mines, in the Congo particularly, as by-product, or nickel mines elsewhere around the world, Cuba and Australia and elsewhere. The fact that you can do this with silver, it's a great commodity, because silver is something you can sell off, you can stream, and use that to pay your capital to build something that's more of a pure play cobalt operation. So great opportunity, and if we're successful, we've got half the camp and 50 past producers that we can explore around.

Gerardo Del Real: Wonderful. Now, Trent, I'd love to get your take. There was an article in the Wall Street Journal a couple of days ago about the Congo's state-owned miner pushing for re-nationalization of mines. Any thoughts there? Obviously with prices being where they're at now, you were in the Congo, and you had some excellent properties. You decided to pivot, and in hindsight, it was obviously an intelligent move on your part and on your team's part. But can you comment a bit on the overall market?

Trent Mell: Yeah. When you look at the DRC, it's a sad state of affairs, but it's something that we predicted last summer. The one thing that a mine can do, when you spend half a billion or a billion dollars in the middle of nowhere, the economic benefits and the careers and the lives that you can impact are beyond anything that a government can do. So to see the state of play there is, unfortunately, as expected. But it's unfortunate for the people of the DRC, and what it's going to mean is greater capital going elsewhere, such as Cobalt, Ontario, in our area.

I've been telling people this for months now. I'm not worried. Most of the cobalt today is coming out of the DRC, but as government policies push investors and miners to look elsewhere, we are finding stuff elsewhere. And Ontario is proving to be one of the most prospective areas in the world. There will be discoveries, and I think there's some big reward for people who get behind these stories early. They take years to find and develop and put into operation, but the time is now. I think there's going to be some really interesting stuff this year. My advice to people who ask is, "Find a good team with a good set of assets, and back them." And you need that combination.

Gerardo Del Real: Jurisdiction and scale matters, and you happen to have both, so it should be a fun 2018.

Trent Mell: It'll be a lot of fun, and again, I'd encourage people who are following us to look for the links. When we start reporting 5 meters, 10 meters, 30 meters, that's where it gets exciting, because this is still the first inning for us, and the fact that we're able to find cobalt and not in discrete amounts, but over long widths, means that you can get in there with some big, large, heavy equipment, and mine these things mechanically at a lower average cost, and produce something that could be really interesting.

That's what gets me more excited, not these little individual samples of 6% cobalt, 4% cobalt. They're important, but to me, that's the smoke, and you've got to go from the smoke and find the tons to back up what I hope will be a world-class mining district one day.

Gerardo Del Real: Well said, Trent, and thank you so much for your time, and thank you for the update.

Trent Mell: Thank you, Gerardo. Have a great day.

Gerardo Del Real: You too now.

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