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Northern Ontario Cobalt Junior Attracts Interest From Metal Trading Companies - BullMarketRun.com

July 25, 2017

Northern Ontario Cobalt Junior Attracts Interest From Metal Trading Companies

BullMarketRun.com

It may not (yet) boast the highest market cap in the burgeoning northern Ontario Cobalt Camp (that honor among Venture-listed companies still belongs to First Cobalt at $45 million prior to its official takeovers of Cobalt One and CobalTech), but upstart Castle Silver Resources (CSR, TSX-V) is nonetheless leading the district in other ways as reinforced again in a news release this morning:

  • CSR, fresh off a visit to Asia, has confirmed it’s in the process of filling requests from 4 Japanese metal trading companies for certain specifications of Cobalt hydroxide test products sourced from the Castle mine near Gowganda;
  • The Cobalt hydroxide will be a value added product created through CSR’s proprietary and 100%-owned Re-2OX process that was originally developed in conjunction with Canada’s National Research Council;
  • CSR announced this morning that SGS Lakefield has produced a 14.8% Cobalt concentrate from the recent mini underground bulk sample that was crushed to –10 mesh and blended for a homogenous sample that assayed 1.5% Cobalt, 46 g/t Silver and a stunning 5.7 g/t Gold (more on that below) – the 14.8% Cobalt concentrate now goes through the Re-2OX process;
  • CSR is the only junior in the area with critical underground access, a testament to the company’s history in the region and the investment of several million dollars into the Castle Property since 2011;
  • CSR is the only Cobalt focused junior in the district currently drilling with a recently expanded Phase 1 program from surface;
  • Preparations continue, as confirmed this morning, for the next phase of drilling which will be from underground;
  • CSR also owns the Beaver and Violet past producers near the town of Cobalt – the Beaver, which was one of the last operating mines when the region shut down around 1990 due to low Silver prices, was famous for its incredibly high-grade Silver (>100 ounces per tonne) from the deepest shaft in the region in the early 1900’s.  A BMR site visit has confirmed there is considerable untapped Cobalt potential at Beaver where a work program is now in progress.

The significance of the breakthrough in Asia, the first step toward building a potential customer base for value added Cobalt products in that region, was highlighted by CSR President and CEO Frank Basa in this morning’s news release:

“I’m excited about how we’re advancing our Cobalt strategy for the battery sector, moving closer to filling a request for client specific test samples of Cobalt hydroxide sourced from the Castle mine and created through our 100%-owned Re-2OX process,” stated Basa.

“While in Asia, besides our dealings in China and with some large metal trading companies in Japan, we met with officials from a Japanese car manufacturer that produces electric vehicles.  Cobalt’s critical role in electric vehicle batteries is going to drive even greater demand for Cobalt product.  As an innovative leader in the northern Ontario Cobalt-Silver Camp, CSR is aggressively implementing its action plan to seize exciting opportunities in the growing Cobalt sector,” Basa concluded.

CSR clearly has first-mover advantage in terms of Cobalt recovery in the district given its underground access combined with its unique Re-2OX process that solves metallurgical issues in the region going back more than a century.  In addition, the company is exploring opportunities using Re-2OX in the recycling of metals from Lithium-ion batteries – more innovation from a company that has raised $2.6 million in hard dollar financings the last 4 months and whose market cap is still a modest $10 million.   The stock is up more than 200% for the year.  They’re doing something right!

There’s GOLD In Them Thar Cobalt Hills!

So what’s with the 5.7 g/t Gold assay CSR reported last week from that mini bulk sample taken from a vein on the first level of the Castle mine within the upper part of the Nipissing diabase?  Additional material from underground is being analyzed, so we should hear more in the near future.  Keep in mind, despite this district’s prolific history of mining, much has yet to be learned and there are sure to be many pleasant surprises.  Historically, Castle was never assayed for any metals other than Silver.

Last week, another company we like a lot, Cobalt Power (CPO, TSX-V), found Gold in a fascinating new surface discovery that was hiding under several feet of overburden at its Smith Property contiguous to the past producing Deer Horn mine near the town of Cobalt.  Channel sampling of a vein in Archean volcanics returned 12.5% Cobalt, 5 g/t Gold, 82 g/t Silver and 0.53% Nickel.  BMR visited this discovery area last week, featuring impressive structure and a swarm of veins approximately 800 m southeast of the Smith shaft, and the market has underestimated the significance of this in our view. Approximately 4,000 sq. m surrounding the zone have been cleared and work is continuing so that detailed mapping and systematic channel sampling can be carried out in advance of drilling.  Assay results for 9 holes completed elsewhere at the Smith are pending.  Vein structures and interflow sediments follow onto the property from the Deer Horn.

The town of Cobalt, early 1900’s.

Exceptionally high-grade Silver became the main focus of miners after the first big Silver discovery in Cobalt in 1903, though a primary Cobalt deposit (Agaunico) with Silver, Nickel and Copper by-product was mined for several decades (4.4 million pounds of Cobalt) beginning in 1904.  Over 100 Silver mines quickly emerged as the Cobalt area became the birthplace of Canadian hard rock mining and one of the world’s largest Silver producing regions with officially more than half a billion ounces hauled out of the ground (at least 750,000 ounces unofficially, according to sources).

Great wealth was created, but there was “tunnel vision” (understandably) regarding Silver at the expense of other metals. Gold was not obvious at surface like it was elsewhere in northern Ontario, so those hunting for the yellow metal pursued their dreams in places like Kirkland Lake and Timmins, while Cobalt was plentiful but miners weren’t too interested in it back then.  Cobalt, of course, now has huge new importance in today’s technology driven world, and it has the potential to turn a large part of northern Ontario into a spectacular new area play with juniors chasing after not only Cobalt but Silver, Gold and base metals underlying a richly textured geological landscape.

Investors who identify the best juniors in this district now could be in for some explosive returns given the history of wealth creation in this region and the powerful new dynamic of Cobalt that companies like CSR, First Cobalt and Cobalt Power are harnessing.

Note:  John, Jon and Daniel hold share positions in CSR.  Jon also holds a share position in CPO.

40 Comments

  1. “”CSR announced this morning that SGS Lakefield has produced a 14.8% Cobalt concentrate from the recent mini underground bulk sample that was crushed to –10 mesh and blended for a homogenous sample that assayed 1.5% Cobalt, 46 g/t Silver and a stunning 5.7 g/t Gold (more on that below) – the 14.8% Cobalt concentrate now goes through the Re-2OX process;…..””

    so Jon, lots of questions.
    Is the upgrading by gravity etc or by solvent chemistry ?
    I guess the next question will be, whats more exciting and potentially profitable, a some higher grade veins or a large area of 1-3% ? cobalt mixed with silver and nickel and maybe gold that can be upgraded to 10–15% cobalt?
    Can they reduce drilling and do more bulk sampling ?
    Can both cpo and csr upgrade their material?

    Comment by donald — July 25, 2017 @ 6:24 am

  2. CSR TARGETS ASIAN MARKET FOR COBALT

    Castle Silver Resources Inc. has provided a corporate update as the company advances its battery sector strategy through its proprietary Re-2OX process after recent meetings in Asia.

    Highlights:

    – SGS Lakefield has produced a 14.8% cobalt concentrate from recently sampled material (see July 19 news release) from the first level of the Castle mine;

    – The cobalt concentrate will now go through CSR’s proprietary Re-2OX process;

    – The Re-2OX process is designed to meet the cobalt hydroxide specifications of four large Japanese metal trading companies that CSR management met with recently in Japan.

    Frank J. Basa, CSR President and CEO, commented: “I’m excited about how we’re advancing our cobalt strategy for the battery sector, moving closer to filling a request for client specific test samples of cobalt hydroxide sourced from the Castle mine and created through our 100%-owned Re-2OX process.

    “While in Asia, besides our dealings in China and with some large metal trading companies in Japan, we met with officials from a Japanese car manufacturer that produces electric vehicles. Cobalt’s critical role in electric vehicle batteries is going to drive even greater demand for cobalt product. As an innovative leader in the northern Ontario Cobalt-Silver Camp, CSR is aggressively implementing its action plan to seize exciting opportunities in the growing cobalt sector,” Basa concluded.

    Exploration Update

    Surface drilling, additional underground sampling and preparations for underground drilling continue at the Castle mine near Gowganda, Ontario, a high-grade past silver producer.

    The shallow-dipping 300-metre thick Nipissing diabase intrusive that underlies a large portion of the Castle Property is interpreted to be a heat source that mobilized various metals – notably, of course, silver intimately associated with cobalt, but also gold, nickel, copper and zinc.

    Meanwhile, a work program is in progress at the Beaver Property, a high-grade past silver producer considered very prospective for cobalt mineralization, near the town of Cobalt.

    Private Placement Closing

    Further to the Company’s news release dated July 14, 2017 announcing the closing of a non-brokered private placement, CSR confirms that it has now raised and closed gross proceeds from that financing in the amount of $897,500 and issued 4,487,500 units at a price of $0.20 per unit.

    75,000 units issued in connection with the private placement are subject to a four-month and a day hold period expiring November 26, 2017, in accordance with applicable securities laws. All other terms of this completed private placement remain the same.

    Quality Assurance/Quality Control

    An 82 kilogram sample of vein material recently taken from the first level of the Castle mine was crushed to -10 mesh and blended by SGS Laboratories in Lakefield, Ontario, from which a representative sample was submitted for analysis by Lead Fusion Fire assay for silver and gold. Other metals, including cobalt, were assayed by ICP after multi-acid digestion.

    A high-grade cobalt concentrate was recovered by SGS Laboratories using the Wilfley table. The material was fed to a one-quarter size Wilfley table using a hopper and vibratory feeder. The Wilfley concentrate, middling and tailing streams were collected. All three products were filtered, dried, weighed and sampled for assay.

    No blank or standard was inserted within the sequence of this met test material by the company. CSR relies on internal SGS laboratory independent QA/QC which allows the disclosure of the results provided.

    Qualified Person

    Claude Duplessis, PEng, of Goldminds Geoservices Inc., a geological, environmental and mining consultant, is an independent qualified person in accordance with National Instrument 43-101, and has reviewed and approved the contents of this news release.

    About Castle Silver Resources Inc.

    Castle Silver Resources Inc. (formerly Takara Resources Inc.) is a TSX Venture-listed junior natural resource company focusing on the exploration and development of former silver and cobalt mine properties in northern Ontario including the Castle Silver mine near Gowganda and the Beaver and Violet mines near Cobalt. Additional information on the Company’s properties is available by visiting its website at http://www.CastleSilverResources.com.

    Comment by Jon - BMR — July 25, 2017 @ 6:26 am

  3. Whaat does the re-ox process do to already concentrated ore?

    Comment by donald — July 25, 2017 @ 6:26 am

  4. JGR started covering CSR this am.

    Comment by GregJ. — July 25, 2017 @ 6:50 am

  5. The more the merrier, GregJ…

    Comment by Jon - BMR — July 25, 2017 @ 6:52 am

  6. Who is JGR? Great article guys!

    Comment by STEVEN1 — July 25, 2017 @ 7:01 am

  7. just noticed Copper at 2.80!

    Comment by STEVEN1 — July 25, 2017 @ 7:03 am

  8. Gtt, looks like they hit big.

    Comment by Roger — July 25, 2017 @ 7:06 am

  9. well, GTT makes a major discovery so they say on ceo. I tried my best to put GGI up as the best chance for a bigger discovery, not even a sniffle of a comment. Also, Rick Rule recommended GTT and Kaiser on NVO. Makes me wonder why no letter writer is picking up GGI. The website is updated. I have pounded GGI very hard and people just yawn at it.

    Comment by dave — July 25, 2017 @ 7:11 am

  10. Another great example of good geology being carried out, Roger – it’s a property we’ve been watching closely and they came thru this morning on those results. High-grade Gold near the Red Chris area, property never previously drilled.

    Comment by Jon - BMR — July 25, 2017 @ 7:13 am

  11. Kwantes said that he recommended GTT back in January. They hit on their first hole. For me, it is always tough for me to see the big deal. I have seen other stocks hit similar grade and yawned. Why is one a big discovery and the other not one. I would have thought the grade they came up with would have needed to be deeper with more meters to be a big discovery.

    Comment by dave — July 25, 2017 @ 7:24 am

  12. Dave

    Re:GGI I think Regoci has done a lot of damage over the past few yrs and no one trusts him or respects him in the newsletter field.. the E&L opportunity is his chance to hopefully show everyone including me he can promote the company and get the story out there, so far he still is not doing that, if it wasn’t for BMR there would be no coverage of this potentially huge nickel find….When you look back at EQT and NRN they had not even 1/10th of evidence of a nickel deposit that GGI has shown so far and they were ran up to ridiculous values at the time.. GGI should already be at least 50cents with all of the evidence that they have so far regarding the E&L, Unfortunately I’m afraid that only great results are going to move this stock price…I don’t think GGI is going to get the speculative lift that others have because of the past performance of the CEO… C’mon Regoci prove me wrong please….

    Comment by Gregh — July 25, 2017 @ 7:29 am

  13. We’ve been suggesting accumulation of GTT under 40 cents for several months, Dave…the very high Gold in soils made it an exceptional geological target, and the stock price took off to a market cap of $30 million which then needed confirmation of a Gold bearing system which it has now…will run…a couple of main indicators – high-grade soils and rock geochemistry – were the drivers to conclude that a significant deposit was possible there…with GGI, I will remind you, there is even greater evidence of something big and its market cap is about $13 million…

    Comment by Jon - BMR — July 25, 2017 @ 7:30 am

  14. We’ve been suggesting accumulation of GTT under 40 cents for several months, Dave…the very high Gold in soils made it an exceptional geological target, and the stock price took off to a market cap of $30 million which then needed confirmation of a Gold bearing system which it has now…a couple of main indicators – high-grade soils and rock geochemistry – were the drivers to conclude that a significant deposit was possible there…with GGI, I will remind you, there is even greater evidence of something big and its market cap is about $13 million…

    Comment by Jon - BMR — July 25, 2017 @ 7:34 am

  15. GGT: Why is it none of the stocks I ever hold go up 17 cents in one morning, sheesh..

    Comment by Gregh — July 25, 2017 @ 7:36 am

  16. You just need a bigger basket, Gregh!

    Comment by Jon - BMR — July 25, 2017 @ 7:37 am

  17. Jon
    you are correct about that… need to start spreading it around instead of going all in on the GGI’s and the CSR’s

    Comment by Gregh — July 25, 2017 @ 7:38 am

  18. Greg, your post #12 hit the nail on the head. It will take a miracle for GGI to move.

    Comment by dave — July 25, 2017 @ 7:43 am

  19. Hmm, Dave…perhaps you better bail before it’s too late!

    Comment by Jon - BMR — July 25, 2017 @ 7:45 am

  20. Jon

    you did mention a while back that GGI and Regoci would start doing more promotion when it was time… don’t you think now is the time??

    Comment by Gregh — July 25, 2017 @ 7:49 am

  21. In this market GGI will have to announce start of drilling before it gets more attention, there are no problems, we just have to get into the queue to be noticed.

    Comment by Scott — July 25, 2017 @ 8:05 am

  22. GGI. 1/2MM offer @.19 is back. maybe they forgot they offered 1MM last time.

    Comment by david — July 25, 2017 @ 8:11 am

  23. I see the game playing in GGI continues.Starting to get a little irritating.

    Comment by pole — July 25, 2017 @ 8:12 am

  24. There’s one way to end game playing, pole, and it’s going to happen real quick.

    Comment by Jon - BMR — July 25, 2017 @ 8:16 am

  25. The quicker the better Jon.

    Comment by pole — July 25, 2017 @ 8:28 am

  26. checkout this 5.5 cents actual producer. Informative article. Drill results coming !!! http://www.northernminer.com/news/anaconda-mining-grows-footprint-atlantic-canada/1003788205/

    Comment by KD Dougan — July 25, 2017 @ 8:54 am

  27. That is a bold statement Jon.

    Comment by dave — July 25, 2017 @ 9:06 am

  28. Faith can drive boldness, Dave.

    By the way, have u looked at the Google Earth picture of Anomaly A, 6 km from the E&L? An E&L look-a-like in many ways. This is where it would be huge for ground truthing to confirm the VTEM conductor. If that happens, and my gut and my head tell me it will knowing the area, then that’s the last sign you should need to reveal what’s is going to unfold at the E&L. Remember that.

    Comment by Jon - BMR — July 25, 2017 @ 9:28 am

  29. I thought the news was supposed to be the week after July long… what’s the hold up? not trying to be impatient, but we are entering August and haven’t even started drilling yet. Isn’t the drilling season May – Oct? What is the logic by Steve here? Just curious…

    Comment by Phil — July 25, 2017 @ 9:36 am

  30. Jon,

    I think what most investors who have been holders of GGI for a very long time are saying is, the promotion is just not there for such a promising Area plus the secrecy around the VTEM. Other companies such as NRN and EQT put out the details of there VTEM. Now having said that, just because you show a juicy VTEM doesn’t necessarily mean it’s a slam dunk as we know with both NRN and EQT. We also know they were long shots, but given the historical information of E&L I’m quite surprised that the sp is not running up on anticipation. Maybe that’s management’s plan? Too shock the market. Hopefully they release more details soon on the VTEM, plus drilling news. This is the last half of July so the drill should be turning.

    Comment by Dan1 — July 25, 2017 @ 10:10 am

  31. Let’s see, Dan1, not fantastic promotion for GTT, but very sound geology which we noted by the way, and now the rewards are there. The same applies with GGI. The fact that GGI isn’t doing what EQT and NRN were doing prior to drilling should be construed as a good sign – look how those ended up. Promo only takes you so far. If one understands the basics of Nickel sulphide deposits, and we’ve put Dr. Peter Lightfoot and others in front of everyone to explain all of that, and if one has learned anything from all the evidence that has flowed in regarding the E&L, one would be sitting back comfortably in total peace enjoying the summer because the foundation for the E&L and GGI is on solid rock, not shifting sand. But many investors don’t have enough confidence in their own analysis and need to wait for the market to tell them what to do, and those investors will be the ones driving the stock to much higher levels.

    Comment by Jon - BMR — July 25, 2017 @ 10:46 am

  32. Agree Jon, I’d rather chug along at this pace and end up with a spectacular discovery then hype the sh%t out of it and nada. I am trusting in the history and GGI geophysist, rather than some off the cuff comment from someone who has no clue what’s going on.

    Comment by Dan1 — July 25, 2017 @ 11:05 am

  33. Dave regarding Gtt. It’s not always the deepness, its sometimes the continuity, strike length and of course grade.

    Comment by Dan1 — July 25, 2017 @ 11:28 am

  34. Jon, do you expect the drill to be turning at E&L this week?

    Comment by Dan1 — July 25, 2017 @ 11:31 am

  35. GTT – not fantastic promotion. Jon, Kwantes and Robmcloid been all over it since January.

    Comment by dave — July 25, 2017 @ 11:35 am

  36. GTT. Laid out their plans in Mar with soils, mapping etc clear as a bell thier plan for sampling, drilling and reporting had a schedule. They booked a driller months ago. The website was one of the most informative going. They have a stellar team that put the project together. They should be the poster child for how for juniors. Greig worked w GGI on the Griz/ manganese project. He was very enthused w what they had done and expectations for GTT. GGI is not in the same park when it comes to timeliness and disclosure

    Comment by david — July 25, 2017 @ 12:00 pm

  37. STEVEN1..Junior Gold Report..(Kal Kotecha)..

    Comment by GregJ. — July 25, 2017 @ 12:20 pm

  38. GGI – there is a lot of evidence is right. Have a great deal of confidence in what the drills will prove here. So many key points on BMR’s checklist but seems worthwhile to remind people about the importance of nickel tenor.

    Nickel tenor, is an indication of how much nickel you know is in the sulfides as a percentage of that sulfide. If you have nickel tenor of 4% and you have 50% sulfide in your deposit, you are going to have 2% nickel. May I remind you that the E&L “gave a tenor range of 4.8% to 8% nickel and 2.1% to 10.9% copper for the E&L in 100% sulphide”. I don’t have to spell it out but we know the grade and we’re going to hit massive sulfides and based on tenor we can expect the consistency in the outcome.

    I was there for Voisey and Noront (thanks Jon for bringing up that example previously) and third time is a charm with GGI.

    Comment by Foz1971 — July 25, 2017 @ 12:25 pm

  39. Excellent systematic work by GTT which shows you what can happen when you have a model and you follow through on a game plan. This is exactly what the market needs and will breathe much needed life into the B.C. scene – more discoveries to come as the summer progresses.

    Comment by Jon - BMR — July 25, 2017 @ 12:39 pm

  40. Jon: is ABN right beside GTT???!

    Comment by STEVEN1 — July 25, 2017 @ 5:33 pm

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