Issue link: http://resourceworld.uberflip.com/i/937377
Cobalt Streaming – How did we get here? Cobalt 27 Capital combines the best performing asset class on the Toronto Stock Exchange – metals streaming and royalties, with the top performing commodity of 2017 INTERVIEW with Anthony Milewski, Chairman and C.E.O., Cobalt 27 Capital Corp. RESOURCE WORLD (RW) – Anthony, could you please tell our readers about Cobalt 27 Capital and the company's progress since its successful IPO last year? ANTHONY MILEWSKI (AM) – Yes, in June 2017, Cobalt 27 completed the single larg- est IPO on the Toronto Stock Exchange and the TSX Venture Exchange since 2012, rais- ing over C$200 million in equity financing and signaling to Canadian and internation- al capital markets the beginning of a large and fast growing battery metals upcycle. Cobalt 27 was formed to build a pure- play portfolio of cobalt streaming, royalty and physical cobalt assets and, in Decem- ber 2017, we raised an additional C$100 million for a total of over C$300 million in equity financing in 2017. During this time, Cobalt 27 acquired 2,982 tonnes of physical cobalt which is the world's second largest above ground inventory of refined cobalt after the Chinese government's strategic stockpiles. All cobalt owned by Cobalt 27 is insured and stored at secure, LME certified warehouses located in Baltimore, Antwerp and Rotterdam. Cobalt 27 is currently negotiating cobalt streaming agreements with producing mining companies where cobalt is mined as a byproduct metal and we intend to fi- nalize the first of several cobalt streaming agreements over the next year. RW – Cobalt streaming, could you walk us through how we got here? AM – I'm sure we don't have to remind your readers that the mining industry is capital intensive. During the 2008-2016 commodities cycle, streaming and royalties quickly grew as an alternative mine financ- ing source, particularly for byproduct met- als such as gold and silver. Many of the base metal producers sold streams or royalties on byproduct metals as an alternative to debt and equity financ- ing. And, streaming and royalties continue to be a popular option as mining compa- nies seek alternative, non-dilutive sources of capital for mine expansion, maintenance and site exploration. We believe Cobalt 27 is ideally positioned to take advantage of the early stages of the technology metals upcycle where large- scale, base metal producers are actively seeking to leverage cobalt byproducts to fund mine expansion and repay debt using alternative, non-dilutive sources of capital. Also, development stage projects are rapidly establishing cobalt reserves and require significant capital including low cost, non-dilutive financing to move through construction, commissioning and into production. RW – In terms of investment perfor- mance, how does the metals streaming and royalties group perform relative to the larger mining industry? AM – In 2017, the metals streaming and royalty group continued to outperform the broader mining equity markets. So yes, in terms of the natural resource sector, met- als streaming and royalties are the top per- former on the TSX. In 2017, the market cap of TSX-listed streaming and royalty companies in- creased 33% to C$36 billion, from C$27 billion in 2016. And, shares of TSX-listed streaming and royalty companies continue to achieve premium valuations trading at a sector average of 1.5x P/NAV in 2017. These are really big shoes to fill. Some of the largest and most successful resource companies trading on the TSX are metals streaming and royalties companies. Over the past 10 years, precious metals stream- ers like Franco Nevada with C$18 billion market cap and Wheaton with C$12 billion market cap, consistently delivered strong returns to their shareholders. We hope to follow in their footsteps, on the technology metals side, cobalt specifi- cally – to follow the majors who really pio- neered this asset class, carved out the TSX metals streaming and royalty space and made it possible for Cobalt 27 to go for- ward and do what we are doing today. RW – Considering all the technology metals that could be targeted in a stream- ing or royalty transaction – lithium, vanadi- um, graphite, nickel, copper – why cobalt? AM – I have been involved with battery metals for some time now and have care- fully considered many investment scenar- ios in this space. We view cobalt's supply Corporate Prof ile