{"id":119771,"date":"2018-01-18T06:51:02","date_gmt":"2018-01-18T11:51:02","guid":{"rendered":"http:\/\/countingpips.com\/?p=119771"},"modified":"2018-06-01T15:46:42","modified_gmt":"2018-06-01T15:46:42","slug":"boreal-metals-bmx-v-makes-bold-move-into-cobalt-sector","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/01\/boreal-metals-bmx-v-makes-bold-move-into-cobalt-sector\/","title":{"rendered":"Boreal Metals [BMX.v] Makes Bold Move Into #Cobalt Sector"},"content":{"rendered":"
January 18, 2018<\/div>
\r\n<\/div><\/div>

By\u00a0Peter Epstein, CFA \u00a0 \u00a0\u00a0<\/span>epstein.peter4@gmail.com<\/a>\u00a0\u00a0 \u00a0\u00a0<\/span>http:\/\/EpsteinResearch.com<\/a><\/strong><\/p>\n

\n
\n
\n
\n

Zinc, Copper, Silver, Gold Junior Makes Bold Move into Cobalt Sector<\/h3>\n

Boreal Metals\u00a0(TSX-V:\u00a0BMX\u00a0\/ Frankfurt:\u00a003E)\u00a0is a base & precious metals explorer in Scandinavia that is making a major push into the key\u00a0green energy\u00a0tech metal\u00a0Cobalt\u00a0(\u201cCo\u201c).\u00a0 The management team & Board have a remarkable amount of experience for a company with a market cap of\u00a0$17 M plus ~$3 M\u00a0in cash.\u00a0[~52 M shares outstanding<\/em>]<\/p>\n

In addition to 4 projects with exploration potential in Zinc (\u201cZn\u201c), Copper (\u201cCu\u201c), Silver (\u201cAg\u201c) & Gold (\u201cAu\u201c); 2 in Sweden & 2 in Norway (Boreal controls 38,266 hectares<\/em>), on January 16th management announced the execution of a definitive agreement with\u00a0EMX Royalty Corp.\u00a0for the acquisition of the 13,115 hectare\u00a0Modum Cobalt project.<\/p>\n

\"\"<\/p>\n

The Modum project surrounds southern Norway\u2019s historic\u00a0Skuterud Mine\u00a0(also known as the Modum Mine<\/em>).\u00a0 Historic mine workings, prospects and trends of mineralization extend onto the property Boreal intends to acquire.\u00a0 Skuterud was Europe\u2019s largest and highest grade producer of cobalt though the nineteenth century. \u00a0CEO Karl Antoniuscommented,<\/p>\n

\u201cThe Modum Project includes an impressive 12,000 hectares, that\u2019s 12 kilometers of\u00a0cobalt\u00a0prospective geology, with stand-alone mining potential.\u00a0 We are<\/em>\u00a0excited about this timely acquisition of a high-grade\u00a0cobalt\u00a0project within an emerging battery production sector in the Nordic Region<\/em>.\u201d<\/em><\/p><\/blockquote>\n

Cobalt in Norway??<\/h3>\n

I was surprised to learn that\u00a0Scandinavia is home to major cobalt operations. \u00a0Umicore\u00a0produces, refines and markets cobalt in Belgium.\u00a0 The world\u2019s largest cobalt refinery\u00a0(Kokkola) is in Finland.\u00a0 Glencore has a giant nickle refinery in Norway\u00a0(Nikkelverk)\u00a0that produced about 5,000 tonnes of refined cobalt in 2016.<\/p>\n

I have to admit that at first blush, I wondered if this move into\u00a0Co\u00a0was the Company simply jumping on the bandwagon of a\u00a0red hot\u00a0sector.\u00a0 However, upon speaking with Mr. Antonius and\u00a0Director Eric Jensen\u00a0about the project and Norway\u2019s history as a global\u00a0Co\u00a0supplier, I came away excited by the prospects.\u00a0 Norway, led by projects in the same district Modum is in, was a global leader in\u00a0Co\u00a0production for much of the 1800\u2019s.<\/p>\n

Over 80% of the world\u2019s cobalt reportedly came from Norway\u2019s Skuterud Mine district in the 1820s-30s.\u00a0 Boreal Metals\u2019 strong in-country experience in Norway & Sweden makes it a natural fit to take this project and run with it.\u00a0 I should also mention that\u00a0management is actively seeking additional\u00a0Co\u00a0properties in the region.<\/em><\/p>\n

\"\"<\/p>\n

The historic grade of\u00a0Co\u00a0mined in the district was ~0.20%, equal to roughly US$156\/tonne at the spot\u00a0Co\u00a0price of US$78k\/tonne.\u00a0 A key risk factor is that this project depends on strong\u00a0Co\u00a0pricing for years to come.\u00a0 Importantly,\u00a0Au\u00a0is known to accompany the\u00a0Co\u00a0mineralization in the area, but the grades of a potential Au by-product was never determined.\u00a0 Miners in the 1800s would not have been interested in exploiting what they would have considered to be an insignificant\u00a0Au\u00a0value at the time.\u00a0 With\u00a0Au\u00a0now at\u00a0US$1,340\/oz, up\u00a0US$100\/oz\u00a0in just the past month\u00a0\u2014 a gold production credit could add significant value.<\/p>\n

In the price chart above, readers can see that the\u00a0Co\u00a0price is up nearly\u00a0250%\u00a0from January 2016.\u00a0 It\u2019s at a high not seen since the 2008 price spike when the metal rose above\u00a0US$110k\/tonne.\u00a0 The outlook for both cobalt & lithium prices is quite robust.<\/p>\n

Analysts correctly point out that the cost of both metals as a percentage of the total cost of a lithium-ion battery is low.\u00a0 Therefore, even though the cobalt price is up\u00a0~260%, and lithium prices are up by a similar amount over the past few years, overall battery costs continue to decline due to technology improvements and economies of scale.<\/p>\n

\"\"<\/p>\n

Much has been written about\u00a0conflict cobalt<\/em>, the greater than 50% of global\u00a0Co\u00a0that comes from the\u00a0Democratic Republic of Congo (DRC).\u00a0 Ongoing child labor law abuses have cast doubt on the country\u2019s continued role as (by far) the largest producer of the metal.<\/p>\n

There are a number of promising developments for\u00a0Co\u00a0production in Canada, but for the foreseeable future the DRC will dominate.\u00a0 Needless to say,\u00a0every major user of<\/em>\u00a0Co\u00a0on the planet\u00a0is looking to source its needs outside of this troubled country.<\/p>\n

By contrast to the DRC,\u00a0Sweden\u00a0&\u00a0Norway\u00a0rank\u00a0# 4 & 6, respectively, out of 176 countries\/territories on\u00a0Transparency International\u2019s\u00a0annual\u00a0Corruption Perceptions Index<\/em>.\u00a0 Both countries are also highly ranked in the\u00a0Fraser Institute Mining Survey;\u00a0in the top quartile, with Sweden # 8 of 104 countries\/territories.<\/p>\n

In my view, this is a primary reason to own\u00a0Boreal Metals\u00a0in the first place, a truly world-class mining jurisdiction.<\/p>\n

Zinc Price Has Made a Major Move Also\u2026.<\/h3>\n

As strong as the market is for cobalt, readers should also note the strength in\u00a0zinc prices<\/em>, up\u00a0~140%\u00a0in the past 13 months, and at a high not seen since August 2007.\u00a0 Zinc inventory levels (a key pricing indicator<\/em>) at the LME are at nearly a 10-yr. low, down over 80% since January 2013.\u00a0 Global Zn supply is dominated by China, which supplies\u00a0more than the next 5 largest zinc producing countries combined<\/em>.\u00a0 Additional zinc supply from Nordic countries would be well received.<\/p>\n

\"\"<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

One of Boreal\u2019s flagship projects is\u00a0Gumsberg\u00a0(18,300 hectares)<\/em>\u00a0<\/a>in southern Sweden.\u00a0 Gumsberg is surrounded by past producers and developers of\u00a0zinc, copper, lead, silver\u00a0&\u00a0gold.\u00a0\u00a0Gumsberg was mined from the 13th century through the early 1900\u2019s.\u00a0 It hosts over 30 historic mines, most notably the\u00a0\u00d6strasilverberg mine, which was the largest silver mine in Europe between 1300 and 1590.\u00a0 Despite its long-lived production history, relatively little modern exploration has taken place on the project.<\/p>\n

\n
\n
\n
\n

\"\"<\/p>\n

Compare these 2016 drill results at Gumsberg to the reported Zn grades at nearby past producers, this is a highly promising, near-surface, early-stage project.\u00a0 The Company is\u00a0conducting a follow up drill program with results expected in March.<\/p>\n

\"\"<\/p>\n

In northern Norway Boreal has the 100%-owned\u00a0Burfjord Copper-Gold project.\u00a0\u00a0CEO Antonius recently commented,<\/p>\n

\u201cThe IP Geophysical Survey increases our confidence in the strike and depth continuity of copper mineralization at Burfjord.<\/i>\u00a0\u00a0Copper mineralization at Burfjord consists of high-grade copper veins within a broader mineralized envelope and the results of this survey affirm Boreal\u2019s target size criteria.\u201d<\/i><\/p><\/blockquote>\n

Mineralization occurs as both high-grade Cu-Au bodies that were historically mined at high cutoff grades (>3% Cu), but\u00a0management has recognized significant volumes of bulk tonnage potential Cu-Au mineralization developed in stockwork vein arrays throughout the property<\/em>.\u00a0 Limited historical drilling includes a\u00a07 meter intercept of\u00a03.6% Cu.<\/p>\n

\"\"<\/p>\n

Conclusion<\/h3>\n

Boreal Metals\u00a0(TSX-V:\u00a0BMX\u00a0\/ Frankfurt:\u00a003E)\u00a0now has 5 high-quality projects, 3 in Norway and 2 in Sweden.\u00a0 I touched briefly on 2 projects, but I will have more to say about all of the Company\u2019s projects next month.\u00a0 Chairman & Director\u00a0Patricio Varas, P. GEO\u00a0has over 30 years\u2019 experience at a wide range of operating mines and exploration projects.\u00a0 He\u2019s worked on world-class deposits and founded\u00a0Western Potash Corp. \u00a0{See bio above<\/em>}<\/p>\n

Varas & CEO Antonius are joined by a number well seasoned mining and funding professionals,\u00a0{see bios on\u00a0website<\/a><\/em>}including\u00a0Director Eric Jensen\u00a0\u2013 Chief Geo & GM of Exploration for EMX Royalty Corp. and\u00a0Daniel Maceneilm MSC, P. GEO.<\/p>\n

Combined, management, the Board &\u00a0Technical Advisory<\/a>\u00a0team have extensive experience in geoscience, mine engineering, geology, exploration\u00a0(including important discoveries<\/em>), project development, feasibility studies, corporate management, venture capital, private equity and capital raising\u00a0(project funding)<\/em>.\u00a0 All of this talent wrapped up in a\u00a0$17 Mmarket cap company with ~\u00a0$3 M in cash.\u00a0 Five projects spanning zinc, copper, silver, gold and now cobalt \u2013 in a world-class mining jurisdiction, with more cobalt property acquisitions being considered.<\/p>\n

Disclosures: \u00a0The content of this article is for illustrative and informational purposes only.\u00a0 Readers fully understand and agree that\u00a0nothing\u00a0contained herein,\u00a0written\u00a0by Peter Epstein of\u00a0<\/em>Epstein Research<\/a>,\u00a0<\/em>[ER]\u00a0<\/em>including but not limited to, commentary, opinions, views, assumptions, reported facts, estimates, calculations, etc. is to be considered implicit or explicit, investment advice. Further,\u00a0nothing\u00a0contained herein is a recommendation\u00a0or solicitation to buy or sell any security.\u00a0 Mr. Epstein and\u00a0<\/em>[ER]\u00a0are not\u00a0responsible for investment actions taken by the reader.\u00a0 Mr. Epstein and\u00a0<\/em>[ER]\u00a0have never been, and are not currently, a registered or licensed financial advisor or broker\/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and they\u00a0do not\u00a0perform market making activities. Mr. Epstein and\u00a0<\/em>[ER]\u00a0are not\u00a0directly\u00a0employed by any company, group, organization, party or person. Shares of\u00a0<\/i>Boreal Metals\u00a0are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks\u00a0can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they consult with their own licensed or registered financial advisors before making investment decisions.<\/em><\/p>\n

\n
\n
\n
\n

At the time this article was posted, Peter Epstein owned shares in\u00a0<\/em>Boreal Metals\u00a0and the Company was an advertiser on<\/em>\u00a0[ER]. \u00a0By virtue of ownership of the Company\u2019s shares and it being an advertiser on [ER], Peter Epstein is biased in his views on the Company.<\/em>\u00a0\u00a0Readers understand and agree that they must conduct their own research, above and beyond reading this article. While the author believes he\u2019s diligent in screening out companies that are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful.\u00a0Mr. Epstein &\u00a0<\/em>[ER]\u00a0are not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article. Mr. Epstein &\u00a0<\/em>[ER]\u00a0are\u00a0not expected or required to subsequently follow or cover events & news, or write about any particular company or topic.\u00a0Mr. Epstein and\u00a0<\/em>[ER]\u00a0are not experts in any company, industry sector or investment topic.<\/em><\/p>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By\u00a0Peter Epstein, CFA \u00a0 \u00a0\u00a0epstein.peter4@gmail.com\u00a0\u00a0 \u00a0\u00a0http:\/\/EpsteinResearch.com Zinc, Copper, Silver, Gold Junior Makes Bold Move into Cobalt Sector Boreal Metals\u00a0(TSX-V:\u00a0BMX\u00a0\/ Frankfurt:\u00a003E)\u00a0is a base & precious metals explorer in Scandinavia that is making a major push into the key\u00a0green energy\u00a0tech metal\u00a0Cobalt\u00a0(\u201cCo\u201c).\u00a0 The management team & Board have a remarkable amount of experience for a company with a […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-119771","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/119771","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=119771"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/119771\/revisions"}],"predecessor-version":[{"id":119772,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/119771\/revisions\/119772"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=119771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=119771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=119771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}