Major International Lithium and Battery Manufacturer Teams up with Junior Explorer to Solve Supply Shortages
Experienced explorers to help supply e metals to major Chinese giant
|Sampling being conducted on Explorex’s Cobalt-Pargon property.|
By Jason Smith
The high-growth electric vehicle market has stoked the market for cobalt.
Of particular note 42 per cent of the world’s cobalt supplies find their way into the manufacture of lithium-ion batteries that power electric vehicles. And between this demand and the rise of stationary storage for clean energy sources like wind and solar, the market for cobalt is estimated to grow at a robust 4 to 5 per cent annually through 2030. We have experienced a similar meteoric rise in lithium carbonate values over the past two years now to be replicated by the impending cobalt shortage.
The Democratic Republic of the Congo (“DRC”) supplies up to 60 per cent of the world’s cobalt but posses an ethical dilemma for end users of lithium ion batteries with some of the major players refusing to purchase cobalt from the Congo.
Companies like Apple, Google, Microsoft, Samsung and Toshiba (to name a few) have helped to form the Electronic Industry Citizen Coalition (“EICC”). One of the EICC’s key initiatives is develop supply chains that avoid sourcing materials from areas like the DRC, a country where a distinct element of its mining industry is known to employ child labour.
With Bloomberg New Energy Finance predicting electric vehicle demand will account for up to 54 per cent of new cars sold by 2040, the corporate social responsibility concerns around cobalt have the potential to create a bottleneck for this key component of lithium ion batteries.
Helping to alleviate this possible bottleneck are companies like Explorex Resources Inc. (CSE: EX). This company has teamed up with a world leader in battery and lithium manufacturing and is building a portfolio of cobalt and other energy metal projects in safe jurisdictions around the world.
The Backing of a Battery-Metal Behemoth
In support of its efforts to identify and acquire good cobalt projects, Chinese lithium manufacturer Ganfeng Lithium has agreed to financially back Explorex in its search and acquisition for new sources. Ganfeng has initially pledged $1 million to kick off this initiative.
The pairing of Ganfeng and Explorex reunites the latter company’s management team with the Chinese manufacturer.
Explorex CEO Gary Schellenberg explains, “In the early 2010s, we lead a company to acquire an array of quality lithium properties and were looking for an end-user to assist with funding the advancement of the projects. We introduced ourselves to a young lithium company, Ganfeng Lithium, with around a $200 million market cap and engaged them in a strategic partnership. Today, Ganfeng has grown to be the number two manufacturer of lithium products in the world, has a market cap of around US$10 billion and I can proudly say our relationship has grown with it.”
When the management team at Explorex approached Ganfeng about supporting its quest for good cobalt projects, it found a willing partner to help Explorex to secure a quality project portfolio. The Company's first acquisitions are located in Ontario and New Brunswick.
Prime Ground in Ontario’s Storied Cobalt Camp
Explorex’s search for good cobalt projects in Canada naturally first led it to the past center for silver and cobalt mining in eastern Ontario. The area’s history dates back to the early 1900s, when over 100 mines produced in excess of 50 million pounds of cobalt and 600 million ounces of silver. This production included over 30 active mines near the town of Elk Lake.
Explorex was fortunate to acquire a project, Cobalt-Paragon, centered on one of these historic high-grade silver-cobalt workings in the Elk Lake area. The Cobalt-Paragon project hosts a 100-metre-deep shaft with three levels of development. Historic reports state that the mineralisation was thickening at depth, however further development was prevented due to the Great Depression shut down operations. To confirm the potential a recent grab sample from the muck pile graded 2.34% cobalt and 730 g/t silver.
Explorex President Mike Sieb commented, “Cobalt-Paragon is a past producer, but the historic development was terminated prematurely quite to our benefit. The mine reports provide us with excellent control to target the known high-grade silver-cobalt mineralization which have never been drill tested below and along strike of the workings.”
A Possible Bulk-Tonnage Cobalt in New Brunswick
Another project that management is excited about is Kagoot Brook in New Brunswick. Kagoot Brook is located on the southwest margin of the world-class base metal mining camp of Bathurst.
This mining camp has a long history of hosting volcanic massive sulphide deposits, a deposit-type know for high grades and (often) large tonnage orebodies. Explorex’s Kagoot Brook project, in which it has an option to earn a 75 per cent interest, covers a 4,233-hectare claim group in the area.
Prior sampling at Kagoot Brook in the 1980s outlined two extensive zones of cobalt mineralization, on trend and 2.5kms apart. A standard silt sampling program generated impressive cobalt values reporting as high as 0.60% cobalt.
Follow-up geophysical work on the project has revealed more markers of a potentially large mineralized system at Kagoot Brook. Explorex CEO Gary Schellenberg says, “When the opportunity to acquire Kagoot Brook came up, we jumped at the chance, recognizing that this was a drill-ready project that could have significant size potential".
Potential for Exploration, Acquisitions in Coming Months
"We have a clear mandate from Ganfeng to build a portfolio of cobalt-based projects at the early, near-drill-ready, drill-ready and development stages, and we hope to execute on that fairly rapidly,” said Sieb.
Schellenberg closed the interview with "The real asset in the company that Ganfeng is betting on is the people behind our Company and their ability to delivery good quality projects. You can expect many new Corporate initiatives in the very near future".