A penny-mine for your thoughts now, Mr. Edison

“The storage battery is, in my opinion, a catchpenny, a sensation, a mechanism for swindling the public by stock companies. The storage battery is one of those peculiar things which appeals to the imagination, and no more perfect thing could be desired by stock swindlers than that very selfsame thing. . . . Scientifically, storage is all right, but, commercially, as absolute a failure as one can imagine.” (Thomas Edison in February, 1883.)

Penny_MinesA great deal of attention has been directed to the roll-out of electric vehicles and the promise of reducing reliance on fossil fuels in the future. Production growth of electric cars has increased demand for critical elements that are necessary to the fabrication of rechargeable batteries. As a result these ‘energy minerals’ have been surging higher in price. This is encouraging an increase in exploration activity among junior mining companies seeking to discover new sources to supply this growth trend.

Edison Cobalt Corp. (TSXV—EDDY) (formerly Power Americas Minerals Corp.) is one of several companies that are engaged in a flurry of exploration activity around the historic Cobalt mining camp in northern Ontario. The town of Cobalt earned its name because the metal is widely distributed in the prospective geology of the area.

Ironically, it was the presence of high-grade silver encountered in the same alteration systems that fuelled the original mining boom in the district more than 100 years ago, and often the cobalt itself was a lower priority.

Now that cobalt is the primary metal of interest, the company was able to secure an attractive beachhead in this district early in 2017 with the acquisition of the Kittson-Cobalt property. Edison Cobalt (then Power Americas) acquired 100 per cent ownership of the large property area, which also includes the formerly producing Shakt-Davis mine. During an intermittent production history spanning six decades, extensive veins up to a metre in width were mined, with estimated grades in the range of 1.5 per cent cobalt and multi-gram gold.

Although very limited data from prior mining activity remains, the company was able to create a 3-D model of the old mine workings down to a depth of 150 metres. Sample material derived from run-of-mine material in waste dumps yielded values up to 3.66 per cent cobalt. In addition, surface sampling has outlined a corridor along strike from the mines, enabling the project geologists to establish new target areas.

Thereafter, additional property holdings have been acquired to increase the overall project size to where it now spans some 4,440 hectares. One intriguing parcel of land recently acquired included the workings of the Thomas Edison mine. (Yes, that one, and hence the recent name change from Power Americas Minerals Corp.).

The famous inventor pursued development of a cobalt mine in 1905 to supply the necessary cobalt for a new battery he was working on. [ed: Evidently, Mr. Edison had changed his mind somewhat since 1883!] The more things change, the more they stay the same, and how fitting that this property is now part of the exploration program with the objective of supplying modern lithium-cobalt battery development.

The preliminary exploration model was confirmed with the completion of a 17-hole drilling program earlier this year. Numerous attractive resource zones were encountered, both in proximity to the Shakt-Davis and Thomas Edison mine workings, and along previously untested extension targets.

Historic mining activity throughout the Cobalt mining camp was focused more on the extremely high-grade silver resources, and cobalt was produced as a byproduct.

Since the known resource zones at Kittson-Cobalt were characterized by elevated levels of cobalt with relatively low-grade silver content, the project was largely ignored even during episodes of intense mining activity in the district. This means most of the resource potential remains intact.

The exploration effort across the consolidated Kittson-Cobalt project area may still be considered early-stage but the company has already achieved several attractive discovery areas in the drilling results.

Wide intervals of alteration in the range of 0.2 per cent cobalt content contribute the clout of building tonnage to the emerging deposit. That will matter when a resource estimate is prepared.

More narrow intervals of two metres or less have also been encountered and often with higher-than-average cobalt grades. Elevated grades of gold and lower grades of silver have been observed at this early stage as well, which is uncommon in comparison to the rest of the Cobalt camp. These metals may represent a potential byproduct, further improving the economics of mining the deposit.

The most attractive areas of cobalt alteration are associated with vein swarms and fracture zones. The prospect of encountering between 10 metres and 15 metres of alteration within a fracture zone is a much easier target for a drill program than the vein intervals of only a few centimetres that often characterized the silver mineralization in the area.

Edison Cobalt enjoys a higher expectation of success at the end of the drill bit than some of its peers elsewhere in the district.

The company has outlined an impressive strike length connecting historic mine workings with unexplored zones in between and the company is now working to methodically drill off the near-surface zones to establish a preliminary resource.

Intense forest fires briefly impaired exploration activity during the early summer this year. Prospecting and mapping activity had resumed by the start of July, however, and the next drilling program may commence shortly. Since the company already reported assays for the previously drilled holes, it used the interruption to update its exploration model.

Targets for the fall program will include the newly acquired property holdings to the east, and the Thomas Edison mine. Despite the appealing potential for discovering a new deposit area at the Kittson-Cobalt project and the speculative interest directed towards juniors with leverage to energy minerals, Edison Cobalt currently trades at a modest market cap in the range of $10 million. The company is well-funded with more than $2 million in cash, and no debt. This is a compelling value proposition.

Mike Kachanovsky is a freelance writer who specializes in junior mining stocks and also covers technology companies. 

This is an edited version of an article that was originally published for subscribers in the August 24, 2018, issue of Investor’s Digest of Canada. You can profit from the award-winning advice subscribers receive regularly in Investor’s Digest of Canada.

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