Part of the Stock Digest group of websites: Visit Tech Stock Digest  

First Cobalt (TSX-V: FCC) CEO Trent Mell on the Game-Changing Cobalt News from the DRC & Advancing the New Flagship Iron Creek Cobalt Project in Idaho

November 7, 2018

Sign up for the free RSD newsletter to get the latest
news and interviews delivered to your inbox.

 

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

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

Gerardo Del Real Thanks for taking the time. Big news out of Glencore's Congo unit, as it's halting sales of cobalt. It's found uranium that, for them, is above the acceptable level. That's a big, big deal. I couldn't think of a better person to call than you to get your take. Can you give me your insights there, Trent?

Trent Mell: Yeah, this is a huge shock for us and the industry. The biggest cobalt mine in the world, controlled by the biggest cobalt miner in the world, Glencore, has come out and said that they can't ship any more cobalt out of that operation. Cobalt's been feeling a little bit of pain since April, when people were worried that maybe we had enough supply for the next little while. This is a game-changer.

We know there's uranium in the DRC in the copper belt. But we didn't think we were going to see it out of Katanga's operations, and the fact that you now have it within their hydroxide, their intermediate product they're producing, creates a real problem because they can't even ship that out of the country. You got to get that uranium out of there, but to do that they need to build a permanent whole new facility to now re-treat the material that they've recently produced.

Gerardo Del Real: Now you mentioned that it's been a tough go for companies with exposure to cobalt, First Cobalt being no exception. You've been buying all the way down, though. I see the insider reports, you and the management team have done a great job of keeping skin in the game.

The company, of course, is focused on domestic sourcing of cobalt. You recently had some news in late October. You had mineralization in zones thicker than previously reported, and there was also some additional mineralization between two recognized zones. All that was in the release. Can you provide some color to that?

Trent Mell: Yeah, so you've got two important points there. Let me start first by addressing the stock price, and the fact that I've been buying as the stock has come under pressure. So for my existing shareholders out there, I feel your pain and I want to demonstrate to people that we still believe in this asset. I believe in it. The Idaho piece has quickly become our flagship. Cobalt Camp in Ontario is a great asset, but we're dedicating most of our resources now to getting Idaho up to production stage, or at least development stage.

The reason I've been buying, we’re all at 52-week lows, not just me but a lot of cobalt juniors, in fact all of the cobalt juniors, we've all been feeling the same pain until this massive piece of news that came out this morning that set us all back on the right trajectory. And so, why am I buying? Well, when you are looking around the world, we know after a year or two, the juniors prop it up and try to explore for cobalt assets. It’s not easy to come by out of Africa and particularly out of the Congo. And we got lucky. Idaho is a fabulous jurisdiction. It's primary cobalt.

We've got Henrik Fisker, who has joined our board as a great show of support. I believe within a year from now, we will demonstrate that we've got the best cobalt deposit outside of Africa. If it's that good and every drill hole we've put into that ground is hitting mineralization and good widths. We're not talking about these short little widths, we're talking 10, 20, 30 meters of economic grade, potentially economic grade. We've got to do the studies but stayed tuned. This is going to move fast for us.

Gerardo Del Real: Now we've spoken in the past, Trent, and you believe that you can double the strike length and downdip depth. Is that correct?

Trent Mell: That's right. We know from surface sampling and historic drilling and the box that we are in that we demonstrated in our resource a little over 500 meters of mineralization in the maiden resource that we came out with just a little over a month ago. We are doubling that as we speak. Everything is on track to achieve what we want to achieve and likewise, the downdip extent of mineralization goes down 150 meters from the surface. And we're testing that down to 300 meters. Again, we've certainly gone to 250 and I should tell you, I'm very happy with what we are seeing.

So, in light of the tough market, what we probably going to do is look to put out a resource estimate in March of next year, mid-March, where we'll try to aim for maybe a 50% increase and just show some encouragement to the market and then we'll get the double later on in the year. And at that point, we can do an economic study, a preliminary economic analysis to try to demonstrate to the world what a mine might look like here in Idaho.

Gerardo Del Real: You mentioned wanting to make sure that existing shareholders and potentially new ones are aware of the fact that you feel their pain. You shut down your Vancouver office and you moved the finance and accounting operations to the Toronto head office. Can you speak to that a bit, Trent?

Trent Mell: There's two sides to that. One is I had a part-time CFO and team out of Vancouver, just inefficient. This is a real company now. Transactions brought four companies together, raised money, built a team. And now that we've got a flagship here in Idaho, we've got to start behaving like a real company. So that is step one.

Step two, shutting down the office is going to save us some money. We don't need two offices and so what has been a tough time right now and now that we know where to focus our time and our resources, I'm looking to save money wherever I can. Cut expenses, cut unnecessary drill programs, travel, whatever. I'm kind of running the company up until today again when the cobalt was suffering a bit, the message to my team was, “Let's run this company like it's 2008 all over again.” We've got to be very judicious with shareholder money and how we spend it. And spend it like our own and that's part of the message I'm trying to send to you.

Gerardo Del Real: Fantastic. Trent, anything else that you would like add?

Trent Mell: No, stay tuned. If you look at where we are and look at Cobalt Ontario, we've got a big land package, we've got a refinery, we've got Idaho. I would say that it's very clear now our flagship is now Idaho and our focus is going to be there. The Ontario Mines and property, while interesting, they are just not as advanced and that leaves us with the refinery. The refinery, in my view – and stayed tuned for some news on this – that's the source of cash flow and if we could start that up, I'd sell it as well maybe but certainly start it up and generate some cash flow. That would go a long way to funding a lot of our activities in Idaho and minimize dilution as we are going forward. So for now, minimizing the share count going forward, trying to conserve capital and trying to create some shareholder value on the back of what's been a tough eight or nine months in the market.

Gerardo Del Real: Trent, thorough as always. Thank you so much.

Trent Mell: Thanks, Gerardo. You take care.

View Interview Archive

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

MARKET SUMMARY

INDICES

Name Last Change
DOW 24465.60 2.26%
S&P 500 2641.89 1.85%
NASDAQ 6908.82 1.73%
TSX 14877.00 1.30%
TSX-V 599.51 0.00%

Resource Commodities

Name Last Change
Gold 1224.20 0.23%
Silver 14.43 0.90%
Copper 2.77 0.030
Platinum 845.50 0.48%
Oil 53.43 7.06%
Natural Gas 4.52 3.91%
Uranium 29.05 0.34%
Zinc 1.22 0.00%

@RSDigest ON TWITTER

Part of the Stock Digest family of websites
Small Cap Stock Digest