Angela Harmantas | April 24, 2018 | SmallCapPower: With a new name to start off 2018, Canada Cobalt Works Inc. (TSXV:CCW), formerly Castle Silver Resources, is putting plans in motion at their Castle Cobalt Silver Project in northeastern Ontario. Frank Basa, CEO of Canada Cobalt Works Inc., and his team have laid out a path to production at the historic mine in the heart of Ontario's cobalt camp. As major cobalt supply concerns are on the horizon, investors are focusing on development/exploration cobalt plays like Canada Cobalt Works.
Historically, production at the Castle Mine site was largely concentrated around silver, producing more than 9.5 million ounces of silver and 300,000 pounds of cobalt in the 1900s. Now that demand for cobalt has skyrocketed, CCW is planning to revamp the Castle Mine as a major cobalt producer.
Figure 1: Native Silver in Drill Core from CCW’s Historic Castle Mine Source: Company Fact Shet
"The Castle Mine has always been a cobalt property," said Mr. Basa about the Company's name change. "Over the last hundred years, they mined silver and threw a lot of the cobalt away. Right now, the lithium-ion battery market demands a lot of cobalt."
Cobalt is undoubtedly one of the hottest commodities over the past two years. An essential component of lithium-ion batteries used in electric vehicles and mobile phones, cobalt is facing a severe supply deficit in the coming years. Apple Inc. recently announced plans to source cobalt directly from miners, and other companies are looking to do the same. The problem, however, lies in the fact that right now cobalt is sourced primarily from the Democratic Republic of Congo (DRC), a politically unstable nation that faces accusations of widespread human rights issues in the mining industry. What's more, on March 9, the DRC president signed a new mining law, raising taxes and royalties on mining operations, with a potential increase in cobalt royalties to 10% from 2%, as well as a 50% tax on super-profits (when commodity prices increase above 25% in the price used in a project's feasibility study). "There's no way that companies can afford a 50% mining tax," said Mr. Basa. "You can make a big discovery, but you can't get the cobalt out of the country."
Alternative sources of cobalt production are in higher demand now than ever before. In the race to get conflict-free cobalt into the market, Canada Cobalt Works may have a leg up on its peers with its underground access at the Castle mine and its historical cobalt production. The Canada Cobalt Works team is using what it calls "real time" development to advance the project by building a mill, undergoing further exploration work and getting its permits, all at the same time. "When the resource is done, we will have all of our permits in place, and the mill will likely be installed," said Mr. Basa.
In February 2018, Canada Cobalt Works announced the permitting process for the installation of a 600 tpd mill at the Castle Mine site. The mill is expected to be financed by Granada Gold Mine Inc. (TSXV:GGM) through debt. CCW would then become the operator to provide custom milling services in the northern Ontario Cobalt Camp.
Canada Cobalt Works has a two- to three-year plan to put the Castle Cobalt Silver property into production. This year the team will focus on underground exploration work, planning additional bulk sampling and drilling to test for cobalt and other metals in various vein structures. CCW is also planning to use a proprietary technology, called Re-2OX, developed by Mr. Basa during his years with Agnico Eagle Mines Limited (TSX:AEM) to efficiently extract the cobalt from the ore. The process is designed to produce cobalt sulphate to specifications necessary for battery sector end users.
"It's a hydrometallurgical closed-loop process, so there's very little environmental impact, and it separates all the metals, not just cobalt," explains Mr. Basa. The Company is planning follow-up lab testing to recover lithium, cobalt and other metals from used batteries as well.
With its Re-20X process, upcoming dewatering & underground drill program, and planned new infrastrucure, Canada Cobalt Works is well positioned to benefit from the continuing uptrend in cobalt prices, driven by the electric vehicle revolution.
To find out more about Canada Cobalt Works Inc., please visit the company's Investor Hub.
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