US Cobalt Inc. (USCO.V) coverage was initiated on September 1, 2017. As a refresher, the company's core project is Iron Creek located in Lemhi County, Idaho, USA. USCO.V is currently working on confirming historic tonnage and grade on the property to achieve NI 43-101 compliance status.
Since our last notes, the following releases were issued.
Sep. 14 - Expands Drilling; Awaits Assays - Reported 20 drill holes completion. The drill core samples for 13 holes delivered to the assay lab. Work on Adit #1 is complete is while Adit #2 was ongoing. Adit #2 was reported to be exposed and rehabilitation was expected within two weeks .
Oct. 4 - Initial drilling intersect of high grade of Cobalt mineralization - Completed the first 24 of a planned 40 core drill holes and reported on the first 13 core drill holes which all had mineralization. Next 10 holes to be shipped, results expected within 3 or 4 weeks of delivery.
Oct. 19 - Announced Private Placement (Eight Capital LLC - $5M) - at $0.53 cents - Warrant at $0.75 cents.
Nov. 8 - Closed $6 Million Private Placement - October 19 announced placement closed at $5.7M, otherwise same terms. Proceeds to be used for exploration and development, as well as, working capital. Also a non-brokered placement was completed that generate additional $250K.
Nov. 24 - USCO.V CEO on Capital Idea TV - (Starts at 23:09) - Discuss the demand for cobalt and reported on USCO.V objectives for 4-5M tonnes. Provided the history of Iron Creek and an update on the project. Also mentioned planned underground drilling program this winter.
Dec. 5 - Exploration Program Update: provided on the campaign which started in June and ended mid-December. Early January resolution. Overall, 40 surface drill holes (approx. 35,000 feet) were reported. Results are divided into 4 batches (holes): B1 (13) reported on Oct. 4th. B2 (7) and B3 (3) results to come before January. B4 (7) and B5 (10) expected late January. Resources estimate to be revised when 2017-2018 drill is completed.
Looking back, on the chart, suggests that the market shrugged off the first drill results. Despite the completion of additional financing ($0.53), the latest drilling update (Dec. 5th) generated some selling pressure! This seems unusual as the results were encouraging but USCO.V broke S1 ($0.55) and tested S2 ($0.49) thereafter. However, the current sell cycle is receding. This aligns well with the anticipation of the two upcoming drill results.
A look at USCO.V's competition is informative. The cobalt space has been very active in the last three months. In fact, most cobalt miners have recently gain valuation while USCO.V has not. As displayed below, November 21st was a pivotal day for many. Releases concerning sample, mergers, project update, and financing, were key catalysts. In addition, we believe that location of the competition (Cobalt. Ontario) was also a factor for some.
What does this mean? Appreciation of other cobalt companies does not equate to USCO.V being a bad investment. Granted, it appears that some of the money may have shifted away from USCO.V but we believe that the rising cobalt prices will eventually serve those that can deliver. We also have to remember that USCO.V already had its spike earlier this year going from $0.45 cents to $1.18 with similar catalyst (i.e. project update, financing, and name change), so in this respect, USCO.V is certainly not lagging.
Going back, USCO.V was selected for the potential quality and location of the deposit (Close to eCobalt Solutions), as well as, the pace of their efforts. To date, the drilling progress has been impressive- 40 holes will be delivered by the end of January. As such, we look forward to the upcoming assay results.
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