Engineering & Mining Journal

JUL 2018

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72 E&MJ • JULY 2018 www.e-mj.com MARKETS During June, cobalt prices declined from $90,000 per metric ton (mt) to $77,800/mt, according to the London Metal Exchange. Only time will tell if this is a slight dip in cobalt's meteoric run or the market reaction to new poten- tial capacity announcements. One of those announcements came from Cobalt 27 Capital Corp., which closed on its previously announced ac- quisition of the world's first pure-cobalt stream, with an amount of finished cobalt equal to 32.6% of the cobalt produc- tion from Vale's Voisey's Bay mine. The company paid Vale a total up-front cash consideration of US$300 million, which represents a prepayment of a portion of the purchase price for the sale of cobalt to Cobalt 27. Cobalt 27 will also make ongoing payments equal to 18% for each pound of cobalt delivered under the cobalt stream, until Cobalt 27 has recovered the full value of the advance amount through Vale's deliveries of finished cobalt under the cobalt stream. After that, the ongoing payments will increase to 22% of the co- balt reference price. The closing of this transaction is in conjunction with Vale completing a sep- arate streaming agreement with Wheaton Precious Metals Corp. In total, Cobalt 27 and Wheaton have provided Vale an aggregate of US$690 million in upfront proceeds for a combined purchase of finished cobalt equal to 75% of Voisey's Bay cobalt production commencing Jan- uary 1, 2021. "The Voisey's Bay Cobalt Stream is a milestone achievement in our pursuit of building the world's premier investment vehicle to play the electric vehicle and battery energy storage revolution," said Anthony Milewski, chairman and CEO of Cobalt 27. "Cobalt 27 is expecting to purchase approximately 1.6 million pounds (lb) of cobalt per year during the 2021 to 2024 ramp-up, increasing to approximately 1.9 million lb of co- balt per year during full-scale production starting in 2025. "The Cobalt Stream will be settled by Vale delivering to Cobalt 27 cobalt metal stored in warehouse in the form of ware- house certifi cates," Milewski said. "At current spot prices, the Voisey's Bay Co- balt Stream is expected to add significant cash flow to Cobalt 27, for an initial 14- year mine life, beginning in 2021." As the rush for battery minerals con- tinues, Cobalt 27 expects this stream to be rewarded in the market. Cobalt Cools in June Gold and silver prices provided by KITCO Bullion dealers (www.kitco.com). Platinum group metals prices provided by Johnson Matthey (www.platinum.matthey.com). Non-ferrous base and minor metal prices provided by London Metal Exchange (www.lme.co.uk). Iron ore prices provided by Platts Iron Ore Index. Currency exchange rates were provided by www.xe.com. (June 29, 2018) Precious Metals ($/oz) Base Metals ($/mt) Minor Metals ($/mt) Exchange Rates (U.S.$ Equivalent) Gold $1,252.40 Aluminum $2,183.00 Molybdenum $26,000 Euro (€) 1.162 Silver $16.09 Copper $6,646.00 Cobalt $77,800 U.K. (£) 1.313 Platinum $852.00 Lead $2,432.00 Canada ($) 0.758 Palladium $956.00 Nickel $14,910.00 Iron Ore ($/dmt) Australia ($) 0.733 Rhodium $2,260.00 Tin $19,675.00 Fe CFR China $64.80 South Africa (Rand) 0.072 Ruthenium $250.00 Zinc $2,948.00 China (¥) 0.150 Source: London Metal Exchange

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