why these lithium and cobalt companies may be the ultimate contrarian play
by：HGB
2020-06-21
Lithium and cobalt are a hidden gem of the mining industry.
Lithium, cobalt and nickel are the main metals used in most modern batteries.
42% of the world\'s cobalt production is used to make lithium-
Ion battery.
According to the cobalt Institute, lithium
Ion batteries have a higher energy density than other battery types and are used in laptops, smartphones, medical devices and electric vehicles in addition to many other industrial applications.
Needless to say, the demand for lithium and cobalt will not decrease very quickly.
While the initial surge in prices caused investors to get excited in 2017, the excitement quickly disappeared as prices retreated sharply in 2018 and fell to 2019.
But there is evidence that a huge boom in battery metal may be around the corner.
If so, this could be a great opportunity for reverse investors to start accumulating stocks cheaply.
Before moving into two of the best lithium and cobalt stocks in 2019, let\'s simply look at the situation where the demand for lithium and cobalt is about to increase.
With the popularity of smartphones and electric vehicles, the demand for lithium and cobalt in the global economy has become deeply rooted.
For the next five years, it is almost certain that more and more lithium and cobalt are needed to produce batteries.
Simon Moore, managing director of Benchmark Mineral Intelligence, told the US Senate in February 2019 that he believes global demand for cobalt has quadrupled by 2023 and will continue to grow by 2028.
This estimates the potential decline in demand for companies such as Tesla (TSLA)
To reduce supply, seek to reduce dependence on cobalt in batteriesside risks.
Moore\'s report looks ahead to a sharp increase in lithium production
Ion batteries: to understand the growing demand for lithium and cobalt, anyone needs to know this.
The problems facing investors are:
Can Cap lithium and cobalt make a profit from this trend?
Lithium America (LAC)
There is a lithium project in Argentina and a lithium project in Nevada.
Recently, the interest of investors has increased and the share price has begun to rise.
Someone has been buying shares of LAC as if they knew something that the rest of the world didn\'t know. First Cobalt (OTCQX:FTSSF)(\"FCC\")
It is one of the few leaders in the cobalt industry looking to build a North American cobalt supply chain.
The company recently received $1.
6 million of private equity, there are signs of bottoming out.
While there are a lot of lithium and cobalt companies to choose from, we believe that these two companies offer excellent profit opportunities as the industry expands.
There are two major projects under lithium America: Cauchari-
Olaroz project in Argentina and Thacker Pass project in Nevada. Cauchari-
Olaroz project the Cauchari-
The Olaroz project is one of the biggest
The world\'s known lithium salt water resources.
The company recently increased this resource by 53% to 17.
Measurement and indication tons of 9 m lithium carbonate equivalent (LCE). It is a high-
Level resources, less impurities, low cost.
Lithium Americas owns a 50% stake in the project, and the other half is owned by the Hong Kong peak Lithium industry.
Recently, Gangfeng invested $0. 16 billion in the project, increasing its stake to 50%.
Their target is initial production in the second half of 2020, as shown in the schedule below.
Some key points of Cauchari-
The section of the Olaroz news release includes: Cauchari-
Olaroz will have 40,000 tons per year (tpa)
Lithium carbonate capacity.
I also like the fact that the interests of management are highly aligned with shareholders.
There are 12 management and directors.
1% of the company
The results returned from the first phase of the feasibility study include: 25,000 tpa battery grade lithium, 40-
Annual project life, operating cost $2,495/ton
At a discount rate of 0. 803 billion and a rate of 28, the net present value of the tax is $ 10%. 4% after-tax IRR and 3. 4-year payback.
Thacker Pass is a project in Nevada.
Lithium-based mining operations occur at the largest-
Known lithium deposits in the United States
The project is a 100% stake in Lithium Americas and does not belong to any joint venture.
This puts LAC in a unique position to profit from the growing demand for lithium.
The Thacker Pass project is economical, scalable and intends to use cutting
Edge method for extracting lithium directly from clay ore beds.
With the commissioning of the pilot plant going smoothly, the company is progressing steadily.
Environmental baseline data have been collected, permit applications are progressing and preliminary feasibility studies have been released in August 2018.
60,000 tpa battery required for PFS-
Lithium grade, mine life is 46 years, operating cost is $2,570/tontax NPV of $2.
6 billion, IRR is 29. 3%.
The technical chart shows that the recent peak removes key resistance at the red drop trend line and does this on unusually high volume.
This also drives the price of 100. day and 200-
Daily moving average.
In addition to the bullish trend, the recent rise pushed the price of LAC to more than $4.
50. It has been held twice in the past six months.
Since bottoming at the end of last year, the highs and highs of lithium America\'s prices are another bullish technical sign for LAC.
Index of relative strength (RSI)
Overbought in the early days, dropped to 40 during the callback period, currently 60 years old, and higher running space.
The LAC has a lot of upside potential because it needs to more than double to get back to its 2018 high.
First Cobalt in Canadabased pure-
Play cobalt is the owner of the only allowed primary cobalt refinery in North America.
The company is exploring the re-launch of the First Cobalt Refinery in Ontario, Canada, which can produce 2,000 tons of cobalt sulfate or metal cobalt per year.
The first cobalt flagship asset was the Iron Creek Cobalt Project in Idaho, USA, which inferred mineral resources to be 26.
Level 0 9 million tons.
Cobalt equivalent is 11%.
Other assets of the company include the past 50.
The production mine of the Canadian cobalt Battalion and the only cobalt refinery in North America that allows the production of battery materials.
Mineral Resource estimates are expected to be updated in the near future, which is free of arsenic, which means processing and licensing is simpler.
The FCC is one of the few companies that take advantage of the Idaho Cobalt belt.
This area in Lemhi County, Idaho is considered to be one of the highest cobalt levels
Rich America.
The Iron Creek Cobalt Project includes exploration claims and mining patents worth 1,700 acres in the Idaho Cobalt belt.
The company has just announced its successful production of a battery.
Grade cobalt sulfate using the First Cobalt refining process.
This important milestone brings the company closer to restarting the only primary cobalt refinery allowed in North America.
It also owns 45% of the Cobalt camp around the mine, including 50 past-Production mine.
On March 29, 2019, the FCC announced no.
A $1 intermediary private placement was raised.
6 million issued through 8.
The company has 9 million shares, $0 per share. 18.
These proceeds are being used for the ongoing work of the first cobalt refinery and other general uses.
The technical chart shows the double bottom of the price this year and breaks through the long term
Long-term downward trend line.
We also saw a series of higher highs on the chart, plus an increase in volume.
All of this shows that the share price of First Cobalt has bottomed out.
The first cobalt price RSI is 55, and there is enough room to continue to rise without reaching the overbought level.
Like lithium America, there is a huge potential for the rise of First Cobalt.
To return to the 2018 high, the stock price needs to rise about nine times.
The first half of 2019 seems to be a great time to start entering first cobalt.
Lithium America and first cobalt are two of the top battery metals companies that were invested in 2019, and that\'s not hard.
Lithium America is preparing to mine the largest lithium reserves in the United States and has received $0. 16 billion from its joint venture partner, Ganfeng Lithium.
First Cobalt has the only allowed Cobalt refinery in the continent, a very promising Cobalt project in Idaho, and a camp with multiple projects near the Ontario refinery.
Both companies have seen a lot of insider trading in recent months, and both have begun to display bottoming patterns in technical charts.
This makes the current entry point to long-
Long-term investors are hoping to bet on higher prices for battery metal.
The absolute bottom of these two stocks may not have been reached yet, but this may be a good time to start accumulating stocks by buying them in installments.
Both fundamentals and technical factors suggest that prices are rising in the lithium and cobalt industries.
This may not be the most popular buying opportunity, but contrarian investors know that the exact time to buy is when others are selling and there is blood on the street.
In our view, the prices of lithium, cobalt and companies that mine these metals look very oversold and undervalued.
Lithium, cobalt and nickel are the main metals used in most modern batteries.
42% of the world\'s cobalt production is used to make lithium-
Ion battery.
According to the cobalt Institute, lithium
Ion batteries have a higher energy density than other battery types and are used in laptops, smartphones, medical devices and electric vehicles in addition to many other industrial applications.
Needless to say, the demand for lithium and cobalt will not decrease very quickly.
While the initial surge in prices caused investors to get excited in 2017, the excitement quickly disappeared as prices retreated sharply in 2018 and fell to 2019.
But there is evidence that a huge boom in battery metal may be around the corner.
If so, this could be a great opportunity for reverse investors to start accumulating stocks cheaply.
Before moving into two of the best lithium and cobalt stocks in 2019, let\'s simply look at the situation where the demand for lithium and cobalt is about to increase.
With the popularity of smartphones and electric vehicles, the demand for lithium and cobalt in the global economy has become deeply rooted.
For the next five years, it is almost certain that more and more lithium and cobalt are needed to produce batteries.
Simon Moore, managing director of Benchmark Mineral Intelligence, told the US Senate in February 2019 that he believes global demand for cobalt has quadrupled by 2023 and will continue to grow by 2028.
This estimates the potential decline in demand for companies such as Tesla (TSLA)
To reduce supply, seek to reduce dependence on cobalt in batteriesside risks.
Moore\'s report looks ahead to a sharp increase in lithium production
Ion batteries: to understand the growing demand for lithium and cobalt, anyone needs to know this.
The problems facing investors are:
Can Cap lithium and cobalt make a profit from this trend?
Lithium America (LAC)
There is a lithium project in Argentina and a lithium project in Nevada.
Recently, the interest of investors has increased and the share price has begun to rise.
Someone has been buying shares of LAC as if they knew something that the rest of the world didn\'t know. First Cobalt (OTCQX:FTSSF)(\"FCC\")
It is one of the few leaders in the cobalt industry looking to build a North American cobalt supply chain.
The company recently received $1.
6 million of private equity, there are signs of bottoming out.
While there are a lot of lithium and cobalt companies to choose from, we believe that these two companies offer excellent profit opportunities as the industry expands.
There are two major projects under lithium America: Cauchari-
Olaroz project in Argentina and Thacker Pass project in Nevada. Cauchari-
Olaroz project the Cauchari-
The Olaroz project is one of the biggest
The world\'s known lithium salt water resources.
The company recently increased this resource by 53% to 17.
Measurement and indication tons of 9 m lithium carbonate equivalent (LCE). It is a high-
Level resources, less impurities, low cost.
Lithium Americas owns a 50% stake in the project, and the other half is owned by the Hong Kong peak Lithium industry.
Recently, Gangfeng invested $0. 16 billion in the project, increasing its stake to 50%.
Their target is initial production in the second half of 2020, as shown in the schedule below.
Some key points of Cauchari-
The section of the Olaroz news release includes: Cauchari-
Olaroz will have 40,000 tons per year (tpa)
Lithium carbonate capacity.
I also like the fact that the interests of management are highly aligned with shareholders.
There are 12 management and directors.
1% of the company
The results returned from the first phase of the feasibility study include: 25,000 tpa battery grade lithium, 40-
Annual project life, operating cost $2,495/ton
At a discount rate of 0. 803 billion and a rate of 28, the net present value of the tax is $ 10%. 4% after-tax IRR and 3. 4-year payback.
Thacker Pass is a project in Nevada.
Lithium-based mining operations occur at the largest-
Known lithium deposits in the United States
The project is a 100% stake in Lithium Americas and does not belong to any joint venture.
This puts LAC in a unique position to profit from the growing demand for lithium.
The Thacker Pass project is economical, scalable and intends to use cutting
Edge method for extracting lithium directly from clay ore beds.
With the commissioning of the pilot plant going smoothly, the company is progressing steadily.
Environmental baseline data have been collected, permit applications are progressing and preliminary feasibility studies have been released in August 2018.
60,000 tpa battery required for PFS-
Lithium grade, mine life is 46 years, operating cost is $2,570/tontax NPV of $2.
6 billion, IRR is 29. 3%.
The technical chart shows that the recent peak removes key resistance at the red drop trend line and does this on unusually high volume.
This also drives the price of 100. day and 200-
Daily moving average.
In addition to the bullish trend, the recent rise pushed the price of LAC to more than $4.
50. It has been held twice in the past six months.
Since bottoming at the end of last year, the highs and highs of lithium America\'s prices are another bullish technical sign for LAC.
Index of relative strength (RSI)
Overbought in the early days, dropped to 40 during the callback period, currently 60 years old, and higher running space.
The LAC has a lot of upside potential because it needs to more than double to get back to its 2018 high.
First Cobalt in Canadabased pure-
Play cobalt is the owner of the only allowed primary cobalt refinery in North America.
The company is exploring the re-launch of the First Cobalt Refinery in Ontario, Canada, which can produce 2,000 tons of cobalt sulfate or metal cobalt per year.
The first cobalt flagship asset was the Iron Creek Cobalt Project in Idaho, USA, which inferred mineral resources to be 26.
Level 0 9 million tons.
Cobalt equivalent is 11%.
Other assets of the company include the past 50.
The production mine of the Canadian cobalt Battalion and the only cobalt refinery in North America that allows the production of battery materials.
Mineral Resource estimates are expected to be updated in the near future, which is free of arsenic, which means processing and licensing is simpler.
The FCC is one of the few companies that take advantage of the Idaho Cobalt belt.
This area in Lemhi County, Idaho is considered to be one of the highest cobalt levels
Rich America.
The Iron Creek Cobalt Project includes exploration claims and mining patents worth 1,700 acres in the Idaho Cobalt belt.
The company has just announced its successful production of a battery.
Grade cobalt sulfate using the First Cobalt refining process.
This important milestone brings the company closer to restarting the only primary cobalt refinery allowed in North America.
It also owns 45% of the Cobalt camp around the mine, including 50 past-Production mine.
On March 29, 2019, the FCC announced no.
A $1 intermediary private placement was raised.
6 million issued through 8.
The company has 9 million shares, $0 per share. 18.
These proceeds are being used for the ongoing work of the first cobalt refinery and other general uses.
The technical chart shows the double bottom of the price this year and breaks through the long term
Long-term downward trend line.
We also saw a series of higher highs on the chart, plus an increase in volume.
All of this shows that the share price of First Cobalt has bottomed out.
The first cobalt price RSI is 55, and there is enough room to continue to rise without reaching the overbought level.
Like lithium America, there is a huge potential for the rise of First Cobalt.
To return to the 2018 high, the stock price needs to rise about nine times.
The first half of 2019 seems to be a great time to start entering first cobalt.
Lithium America and first cobalt are two of the top battery metals companies that were invested in 2019, and that\'s not hard.
Lithium America is preparing to mine the largest lithium reserves in the United States and has received $0. 16 billion from its joint venture partner, Ganfeng Lithium.
First Cobalt has the only allowed Cobalt refinery in the continent, a very promising Cobalt project in Idaho, and a camp with multiple projects near the Ontario refinery.
Both companies have seen a lot of insider trading in recent months, and both have begun to display bottoming patterns in technical charts.
This makes the current entry point to long-
Long-term investors are hoping to bet on higher prices for battery metal.
The absolute bottom of these two stocks may not have been reached yet, but this may be a good time to start accumulating stocks by buying them in installments.
Both fundamentals and technical factors suggest that prices are rising in the lithium and cobalt industries.
This may not be the most popular buying opportunity, but contrarian investors know that the exact time to buy is when others are selling and there is blood on the street.
In our view, the prices of lithium, cobalt and companies that mine these metals look very oversold and undervalued.
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