Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Meteoric Resources all set for a re-rating, ahead of drilling on the Mulligan cobalt project

Meteoric Resources has high grade cobalt in a safe jurisdiction
Meteoric Resources all set for a re-rating, ahead of drilling on the Mulligan cobalt project
The cobalt price continues to benefit from supply disruptions and rising demand

It’s worth a moment of reflection to consider how the valuation of rock that contains cobalt compare to other types of ore, now that the cobalt price is hovering at around US$100,000 per tonne.

After all, at these levels, ore that grades 2% cobalt can now be considered equivalent to gold ore that grades as much as 40 grams per tonne.

READ: Meteoric Resources 'back on the ground' and keen to get drilling in Canada

Seasoned mining investors will know that such gold grades are exceedingly rare, and cobalt grading at 2% isn’t exactly thick on the ground either.

But Meteoric Resources (ASX:MEI) can go even better than 2%. Historically mined grades at its Mulligan project in Ontario averaged 10% cobalt and at times ran as high as 19%, with associated gold, silver and nickel.

Because the veins in which this ore occurs are very thin there isn’t that much of it, but what there is is likely to be very rich rock indeed.

“These things per tonne are incredibly valuable,” says Meteoric’s managing director Andrew Tunks.

He’s relatively new at the helm of Meteoric, but has no doubts at all about the potential of the portfolio of assets inside the company.

“It’s cobalt, cobalt and cobalt,” he says.

Demand for cobalt continues to wax strong as battery production continues to rise and the main source of supply, from Congolese mines, remains constrained.

Not surprising then that Tunks has been picking up more Canadian cobalt projects to go with Mulligan while he’s been waiting for the snow to thaw so that his teams can get mapping. Recent acquisitions have included Lorrain, nine kilometres to the south of the Ontario town of Cobalt, and Beauchamp, 40 kilometres north.

But now that the snows have gone, work on Mulligan is getting underway, and is likely now to be continuous.

At the moment it’s geophysics, but it won’t be too long before a drilling campaign gets underway.

“Our goal is to start drilling in July,” says Tunks.

The plan is to spend around C$2mln to C$2.5mln on the exploration campaign this year, and it’s “not impossible,” says Tunks, that the company might end up with a maiden resource by then.

However, he cautions that at this stage it’s really too soon to say exactly where the company will be in six months’ time. So much depends on what sort of core comes out of the ground.

But what is clear is that once the company starts putting out results from Mulligan and other prospects, market interest will pick up.

Other cobalt companies that have initiated drilling programmes on prospects have seen significant re-ratings on the Australian market, and in Canada too. Meteoric is likely to be no different.

After all, there aren’t too many easy, high grade cobalt projects to be found in the world. Production from the main sources in the Democratic Republic of Congo is fraught with difficulty, while the cobalt in a lot of the Australian projects is contained in laterite ore, which is famously a challenge in terms of metallurgy.

“Finding a good deposit in the First World is really the ideal,” says Tunks.

Potential buyers are of a similar mind. There are reports that Apple is considering entering the cobalt market in a manner similar to the way tech companies have moved to secure lithium supply.

That kind of news only serves to heighten investor appetite, and means that all eyes will turn to the results from Milligan when they start coming out in a month or so.

After that, the future is open. There may be a resource by the end of the year. And in the event of success, there may be a dual listing in Canada too.

But as always, the drill bit will have the final say.

 

View full MEI profile View Profile

Meteoric Resources Ltd Timeline

Related Articles

Picture of gold bar
March 21 2018
Dandoko is in the Kenieba inlier where more than 50-million ounces of gold have been discovered.
lithium in periodic table
July 25 2018
Ironridge has an extensive West African and Australian exploration portfolio
drill rig at site
April 10 2018
The company's shares are trading about 8% higher intra-day, at 1.4 cents.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use