Cantor Fitzgerald initiates coverage on First Cobalt with a Buy rating and C$0.60 price target

Cantor Fitzgerald has initiated coverage on First Cobalt Corp (CVE:FCC) (OTCQX:FTSSF) (FRA:18P) with a Buy rating and a C$0.60 price target.

The analyst firm noted that First Cobalt owns North America's only permitted cobalt refinery -- which is key to the development and manufacturing of batteries for electric vehicles (EVs).

It also pointed out that First Cobalt also owns the Iron Creek cobalt-copper project in Idaho and also controls significant silver and cobalt assets in the Canadian Cobalt Camp in Ontario, including more than 50 past-producing mines.

READ: First Cobalt receives C$1.92M in cash after warrant expiry exercise; names Cora Klein as head of investor relations

“The company’s top focus is refurbishing and expanding its 100% owned and permitted Canadian cobalt refinery, which will support production of 25 kt of battery grade cobalt sulfate, or roughly 5% of the current global refined market, annually,” wrote analyst Matthew O’Keefe.

“Commissioning is expected in late 2022. Cobalt is a critical metal to power the green economy and electric vehicles (EVs) and FCC offers one of the few pureplay cobalt equities available.”

O’Keefe, in his note, stressed several other factors working in First Cobalt's favor:

• Cobalt a critical metal. In the firm’s January 25 Macro Report: A Green Economy and Electric Vehicles Start with Metals, Cantor Fitzgerald highlighted cobalt as one of the critical metals needed to make the transition due to its core function in the stability of high-powered and long-range lithium-ion batteries.
• Well supported. First Cobalt has received financial support from the Provincial and Federal governments and secured cobalt feed from two major cobalt producer/traders.
• Cobalt refinery construction expected Q2/2021. First Cobalt is on-track to produce cobalt sulphate for the EV market by the end of 2022 and generate annual operating cash flow of over US$37 million.
• Cobalt exploration in North America: First Cobalt’s Iron Creek project in Idaho currently hosts a cobalt equivalent resource of 37 MMlbs which should double by 2023 as well as exposure to a large land package in the historic cobalt camp of Ontario.

First Cobalt’s stock recently traded 2% higher to US$0.27 a share in New York and 3% higher to C$0.34 a share in Canada.

Contact the author: patrick@proactiveinvestors.com

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