In December 2017, First Cobalt closed a merger with Cobalt One to form the largest landowner in the Cobalt Camp in Ontario and owns the only cobalt refinery in North America for producing battery materials. First Cobalt’s primary focus is on the Greater Cobalt Project, which is over 10,000 hectares of prospective land including more than 50 past producing mines, a mill and the only permitted cobalt refinery in North America that is capable of producing battery materials. And First Cobalt was formed with the intent of providing investors access to the growing cobalt market, which is largely driven by the electric vehicle revolution.
To learn more about First Cobalt’s CEO and President Trent Mell and the company, I conducted an interview with him. Mell told me that he grew up in rural Canada with his mother, older sister and younger brother. His parents went bankrupt and divorced during the recession in 1981. As his mother did not want to chase their father for support, the family made their home out of a sea container and old summer cottage 10 miles outside the nearest town. Mell said that it was a loving home, but it was very cold in the winter and there were periods where running water was hard to come by. The family drank powdered milk, struggled to pay the bills and hitchhiked to get around.
Mell vowed to never again live on social assistance in his early teenage years and his mother incessantly pushed him to get an education. And he also benefited from being in a country where a person can pull themselves out of poverty. Mell ended up getting five university degrees and started his professional career as a corporate lawyer at one of Canada’s most prestigious law firms.
When I asked Mell where cobalt is mined today, he said that it is a byproduct of copper and nickel mines. And it is mostly produced by large diversified base metals companies so it is not easy for investors to get exposure to the commodity.
The First Cobalt team recognized that the automotive industry is in the “early innings of a fundamental change” and the mining industry was not prepared to answer the call for a 100% increase in demand for cobalt over the next seven to eight years.
When Mell joined the company in March 2017, there was not a team or assets in place so he started recruiting a few industry veterans to help identify prospective cobalt properties around the world. Now the senior leadership team and the board of directors have well over 200 years of combined experience in mining. Mell began his mining career with Barrick Gold and then joined Sherritt, which produces nickel and cobalt. But he said he now prefers the junior mining space as there are better opportunities to create shareholder value.
First Cobalt started its expedition for assets in the Democratic Republic of the Congo (DRC) as nearly two-thirds of global cobalt production is currently mined there. Mell said that even though there were some great properties, the company abandoned the chase for two reasons. The first reason is the geopolitical conditions in the DRC are getting worse and there is a growing concern about child labor being used in some Congolese cobalt mines. And the second reason for leaving the Congo is the appeal of exploring what the company believes is among the most prospective cobalt camps near a small Canadian town called Cobalt. “Yes, the town is actually called Cobalt,” Mell pointed out.
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