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BlueBird Battery Metals Inc: THE INVESTMENT CASE

BlueBird Battery Metals aims to help solve a looming problem facing electric car makers: the ‘unruly teenager,’ otherwise known as cobalt

The company’s goal is to be a leader in the battery metals sector, with cleaner cobalt in Australia
BlueBird Battery Metals aims to help solve a looming problem facing electric car makers: the ‘unruly teenager,’ otherwise known as cobalt
INVESTMENT OVERVIEW: BATT The Big Picture
The company is focused on the exploration of cobalt, nickel and copper properties in Australia and Canada

The electric vehicle revolution is here, but it could be hitting a speed bump, by way of heavy demand for cobalt. And for BlueBird Battery Metals Inc. (CVE:BATT, OTCMKTS:BBBMF), that’s a good thing.

“We believe that cobalt is the most critical metal that goes into lithium ion batteries for electric vehicles and the supply of cobalt is unstable; it is basically a by-product supply,” says president and director, Alf Stewart. “98% of cobalt comes from copper and nickel mining and we expect the demand for cobalt to grow dramatically.”

WATCH: BlueBird Battery Metals takes on another Australian cobalt acquisition

Cobalt, nickel, copper are just three minerals the junior exploration company is focused on, given the growing demand for electric vehicles, and further to that, the demand for battery metals.

Cobalt, a silverish-gray metal, is an essential ingredient in lithium-ion batteries that power smartphones as well as plug-in electric vehicles.

The ‘unruly teenager’

“The problem is that cobalt is like an unruly teenager,” says Stewart. “Cobalt behaves very well when it’s associated with its adult metals such as copper, nickel and manganese, but on its own, cobalt will combine with very toxic elements, such as arsenic. Most cobalt sulfide minerals contain as much arsenic as cobalt. The high-grade cobalt deposits in North America are cobalt-arsenic-sulphur.”

Many high-grade cobalt properties around the world can’t be developed because they have toxic materials associated with them. BlueBird, however, has a number of projects where other elements are part and parcel alongside the cobalt.

There is a class of deposits called residual oxide deposits in Australia where the cobalt is associated with manganese.

The good news? Manganese associated with cobalt can translate into high-grade residual deposits without the nasty stuff (arsenic) attached. The company is currently acquiring two projects of this type in Australia.

“What we have in New South Wales Sandy Point Project, and in the Ashburton area in Western Australia, is cobalt associated with manganese that is easier to develop. At our Canegrass Project, we have cobalt associated with nickel and copper, and again we believe will be easier to develop,” says Stewart.

“What we’ve put together is a global portfolio with cobalt, nickel, copper, and manganese — all battery metals in what we anticipate to be more easily developed areas with simpler metallurgy.”

The global supply of cobalt is changing

Globally, much of the world’s cobalt production is produced by the Democratic Republic of Congo (DRC), accounting for more than half the world’s 123,000-ton production in 2016, according to Natural Resources Canada. China and Canada followed, each contributing roughly 6% of supply, followed by Russia and Australia.

But that figure is shifting, as the smaller players have a clear opportunity to benefit, particularly in light of the challenging environment of the DRC, which comes with political risks and conflict, not to mention the fact that firms from China dominate the mining industry.

Eyes are turning elsewhere, in places like Australia and Canada, and for BlueBird that’s welcome news. 

Looking forth to Australia

Australia has been an area of focus in the last few months for BlueBird, as they have taken on another project, its fourth in three months.

“We have been aggressive over the last few months, having acquired our fourth project in three months, called the Ashburton project. It’s a cobalt-manganese project located in Western Australia… it’s increased our land position to about 520 sq km, and has set the foundation for BlueBird to start building a large portfolio in Australia,” says chief executive officer and chairman Peter A. Ball.

Projects in Australia now include BlueBird’s newly announced Sandy Point, Greendale and Reedy Creek, and Ashburton, all of which are in the midst of the acquisition process, and its first acquisition, Canegrass.

READ: BlueBird Battery Metals picks up another Australian cobalt project, boosting its portfolio in the country

BlueBird’s further-developed Canegrass project in Western Australia is a priority nickel, cobalt, copper project within the largest layered intrusive complex in Australia. It’s currently in the exploration phase, and the company says it anticipates its drill program to start later in summer 2018.

Australia is a compelling place to be, according to Ball. One significant factor is the speed at which it takes to push a project through.

“We find Australia is a place where you can push through projects from the drill bit, through discovery, right through resource development and production in under four to five years, compared to North America, which is upwards of 10 years,” says Ball.

Batt Project, Yukon, Canada

BlueBird has also cast its eyes on Canada, with its Batt project, located in the mining and exploration-friendly Yukon.

The cobalt/copper exploration project is located 15 kms off the Haines Highway. Originally, the area was staked and explored in 1967, and re-staked in the early 90s. 

It has analogies to the giant Windy Craggy copper-cobalt deposit, 100 kms to the south. That deposit has a significant resource of 297.0 Mt at 1.4% copper, 0.07% cobalt (according to the Government of British Columbia’s MINFILE database), but was never developed.

There hasn’t been any modern geochemical exploration done since, which could pose a ripe opportunity for the company.

In August 2018, a ground crew will be at site completing field work at the project.

Possible acquisitions ahead

For now, BlueBird isn’t ruling out any further acquisitions and says it’s currently reviewing new opportunities to add to the company's project portfolio.

The fall of 2018 will be a busy season for the company with multiple exploration programs ongoing. The race to deliver cobalt is far from over, in fact, it's not expected to peak for an estimated five to 10 years.

Cobalt, it turns out, might be an ‘unruly teenager’ but it also has potential to grow into something great for a company like BlueBird.

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