Wednesday April 2, 2014, 4:00am PDT
By Charlotte McLeod - Exclusive to Cobalt Investing News
Yesterday, Cobalt Investing News (CIN) published a roundtable that saw three junior cobalt companies discuss Tesla Motors’ (NASDAQ:TSLA) planned $5-billion lithium-ion battery “gigafactory.”
Specifically, the gave their impressions of the news and talked about what it means for them and for the junior cobalt sector as a whole.
To get an idea of what the companies plan to do moving forward, CIN also asked them, “what’s next?” Here are their answers:
Erin Chutter, president, CEO and director of Global Cobalt (TSXV:GCO):
Achieving economies of scale for the battery plant will not only require Tesla and its battery-making partners to supply batteries for Tesla vehicles, but also to manufacture power-storage devices for other vehicles, electronic devices and the renewable energy industry. This equates to further increased demand for battery-grade materials, including cobalt.
Rick Honsinger, vice president of corporate communications at Formation Metals (TSX:FCO,OTCQX:FMETF):
Our goals remains the same: to successfully conclude a mine financing and recommence construction at our Idaho cobalt project, at the same time reviewing other prospective opportunities that could lead to generating cash flow in the short term. Our financial status remains relatively strong — as of November 30, 2013, $7.8 million in cash, significant assets in the millions of dollars in Property, Plant and Equipment and no long-term debt. While we continue with strict austerity measures in place, we are also looking into leveraging a portion of our cash to acquire stressed assets to increase shareholder value.
The developments at Tesla have afforded additional potential opportunities for companies such as ours that are working on North America-based mineral projects; more specifically, advanced, near-term, ethically sourced cobalt and graphite projects capable of providing the raw materials for their gigafactory battery plant. Forming alliances with such companies fits well with Tesla’s commitment to high standards of corporate social responsibility and their goal of reducing battery costs.
Troy Nazarewicz, investor relations manager at Fortune Minerals (TSX:FT,OTCQX:FTMDF):
Fortune’s NICO project has recently received environmental assessment approvals for both the mine in the Northwest Territories and refinery in Saskatchewan. We have already announced a strategic investment by Procon Resources, a mining contracting company that is controlled by China CAMC Engineering (SZSE:002051), itself a controlled subsidiary of the giant Chinese state-owned enterprise SINOMACH.
Fortune plans to release an updated feasibility study for NICO in early April to segue to advanced discussions for project financing to develop the mine and refinery. Fortune is working with Deloitte as its financial advisor to advance financing options, and construction is expected to begin upon receipt of this financing.
It’s clear that all three companies have a lot to do — keep watching to see how their plans play out.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Global Cobalt and Formation Metals are clients of the Investing News Network. This article is not paid-for content.
Interviews conducted by the Investing News Network are edited for clarity. The Investing News Network does not guarantee the accuracy or thoroughness of the information reported. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.