You’ve probably invested in gold, silver or even copper at one time or another, but there’s a new metal in town that has surged in popularity with investors. Say hello to cobalt and Canadian cobalt stocks.
If you invest in the natural resource or precious metals market, it’s time to look into this promising new market before the ship sails without you.
What Is Cobalt TSX V?
Cobalt is an element with the symbol ‘CO’ on the periodic table, and is found in the earth’s crust in a chemically combined form as well as in smaller deposits in the alloys of natural meteoric metal. Mostly mined as a by-product of copper, cobalt has been mined for usage in jewelry, batteries and painting.
Cobalt production has recently surged due to its use in the treatment of cancer. Before this discovery, however, it has been used in vehicle batteries under different alloys such as lithium cobalt oxide (LiCoO2) and in the manufacture of magnetic, wear-resistant, and high-strength orthopedic implants. A lot of other technology these days contains various amounts of cobalt, including aviation where it is added to aircraft and vehicle parts to increase efficiency.
As cobalt gains more and more utility, the demand will continue to steadily increase as we no doubt head towards a more technologically advanced society. A number of Canadian companies capitalizing on this demand for cobalt have emerged with great success, so today we will look at some of the top Canadian cobalt stocks on our watchlist.
How Can I Invest In Cobalt?
Although you can’t buy cobalt in the same way you can buy gold or silver, you can still invest in it indirectly through purchasing Canadian cobalt mining company stocks. Thus, investing in Canadian cobalt stocks is the same as investing in all other kinds of stock. As such, make sure you do your own due diligence before making any investment decisions.
The Canadian cobalt stocks on our watchlist are poised to benefit from the growing cobalt market. In the past 5 years, all these cobalt companies have experienced a continuous increase in share price matching the increase in demand. Big time investors are beginning to see the value of this industry and so should you.
However, it is worth noting that buying cobalt mining stock does carry extra risks because many of the companies that mine cobalt also mine gold, copper, and other precious metals. Therefore, the stock prices of these companies could be affected even if it has nothing to do with the cobalt industry. Make sure you are aware of the risks and understand what you’re investing in. The world’s largest producer of cobalt, Glencore, is based in the Democratic Republic of Congo which does make it problematic for Canadians to buy since it is an unstable area.
In short, the world’s largest cobalt mining corporations, which altogether produce about 30% of the global output of cobalt, do not focus on this precious metal exclusively. Despite this, a handful of Canadian companies, realizing the potential this industry holds, have invested a significant portion of their operations into producing it. Feel free to check other resources on our site for more information.
What Are The Best Canadian Cobalt Stocks To Buy?
The potential of these stocks cannot be overlooked. New and experienced investors alike have been drawn to this industry as the demand for cobalt shares has risen year after year.
Here are some of the top cobalt mining company stocks on our radar that we expect good returns from. Note that we have no affiliation with any of the companies on this list—this article is for educational purposes only.
Company 1: Sherritt International (TSX S)
Sherritt International is a major cobalt and nickel producer in Canada with mines in Canada, Cuba, and Madagascar. They’re also a supplier of technology. With a share price of 0.56, the company primarily focuses on nickel production, but also produces other minerals in large quantities. It produced about 3,370 tonnes of cobalt in 2020 with a guidance of 3,300-3,400 tonnes.
It also has oil and gas operations in Cuba, which means they are well diversified. The operations in Cuba have been a bit challenging because they have faced issues transferring money back to their headquarters. However, this poses no issues to the actual production capacity of their operations.
In early 2019, the stock took a nose dive after reaching a high of about $1.50 per share. It bottomed out at $0.08, and in 2020 it started uptrending and is currently at $0.50. While the company does carry a large amount of debt, they press on with the belief that prices will continue to trend upward as demand for precious metals, including cobalt, increases in the coming years.
Company 2: Canada Cobalt Works (TSXV CCW)
Canada Cobalt Works is a major cobalt producer that operates mines in Northern Ontario.
They didn’t always mine cobalt, though. Between 1979 and 1989, they mined silver with high price-range viability, but have since focused on cobalt. They’ve heavily invested into the most updated cobalt mining technology to position themselves at the forefront of the coming cobalt rush.
They are currently reworking three mineshafts to make production easier and faster. It has recently acquired Polymet Labs, a 23,000sq. ft facility, that will be in charge of processing the mined cobalt. The only concern is that very little is known about when serious operation will begin.
Company 3: First Cobalt Corp (TSXV FCC)
First Cobalt Corp is not a direct miner and producer of cobalt. First Cobalt is a cobalt company that owns a cobalt refinery located in North America, where cobalt is converted to cobalt sulfate, which is a raw material for the production of batteries. First Cobalt primarily serves large tech giants such as Tesla and Apple who need this material for battery production, and with the shift to electric vehicles innovation these past few years, the demand for cobalt will only continue to skyrocket.
First Cobalt was able to team up with Glencore, the world’s largest producer of cobalt. First Cobalt has a capital price of about $160 million and is growing year after year.
First Cobalt Corp also owns the Iron Creek Cobalt Project which is a cobalt mine in Idaho. Lots of infrastructure is being put in place based on the promising preliminary tests.
Between 2018 and 2019, First Cobalt’s share price tanked dramatically and has been in a downtrend ever since. However, we expect the trend to reverse. We will update our readers with more information about First Cobalt but for now, this is definitely one to watch to see what happens.
Other Cobalt Companies In Canada Include:
- Noble Mineral Exploration
- Canada Silver Cobalt
- Cobalt Blockchain
- Fuse Cobalt
- Battery Mineral Resources Corp
- China Molybdenum
- Fortune Minerals (located in the northwest territories)
- Canada Nickel Co
- Cobalt Blue Holdings
- Katanga Mining
Will Cobalt Stock Rise?
The case for a bullish outlook on cobalt stocks is very solid. Batteries for electric vehicles will surge in demand as the world begins to transition to EVs, and cobalt is an essential component for these batteries. Additionally, its usage in cancer treatment has been shown to be highly efficacious. The average stock price across cobalt all companies has been low most of 2020, but most of these companies have started to uptrend again which could signal the beginning of strong bullish momentum.
The demand for cobalt will only rise, providing incentives for more and more companies to venture into the industry. As always, there are billions of different stock investments out there so it is prudent to make sure to do your own due diligence before investing any real money. Make sure to look out for companies that have a strong outlook for the future, rather than just focused on short-term gains.
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