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How Junior Mining Executives will now want to be Economists too

How Junior Mining Executives will now want to be Economists too

You don’t have to look far to hear all about cobalt.  We all know much more than we did a couple of years ago about its importance in batteries and the electric vehicle revolution and on and on.

For reasons that virtually no one can explain with any credibility, cobalt prices have gone into a deep, dark tunnel, a tunnel deep and long enough that everyone is actually afraid to look.  We all know that it’s going to change, it’s a question of when and what to do in the interim.

The fact is that nothing has actually changed.  Electric vehicles aren’t going anywhere and while infrastructure progress has been mixed, it will get there, with or without Elon Musk and all his shiny Teslas.  As is the case with the evolution and adoption of all technology, there are many tears and lots of hand-wringing along the way. 

At 21C, we took matters into our own hands and decided that a deeper dive into the macro trend of electric vehicles was needed.  And what we discovered truly surprised us.

Remember hybrid vehicles?  Tesla with their fancy showrooms made that all sound so 90s and old-fashioned.  We were headed for a slick new world where Elon could close your sunroof from a bunker in Nevada.  Cool.  Except when it’s not.  And right now, even though everything points to cobalt being exactly the thing we need, it’s tough to make its economic case.

Enter palladium.  Ah, the smell of catalytic converters in the morning.  Yes, that’s how this all fits together.  As you may know, palladium is needed for the catalytic converters found in old-fashioned internal combustion engines and cobalt is needed for electric vehicle batteries.  Et voila.  A hybrid car needs both.

That’s what we decided to do at 21C.  Rather than get better at cribbage waiting for anyone to care about cobalt (which we believe won’t be so far away so perhaps we wouldn’t have got much better anyway) we proactively decided to add the other hybrid element to 21C’s mix.  Palladium.

Back to the world of hybrids.  Because of infrastructure growing pains and the lack of robust range (who wants to get stuck on a quiet and cold Canadian side road looking for an extension cord and a plug?) it’s been a case of “not so fast, my friend”.

There is no question that the hybrid solution is a bridge, it’s something to get us from here to there.  “There” hasn’t quite arrived as yet so the logical solution is the hybrid.  It’s difficult to say how long this bridge will last or, frankly, be necessary.  According to Bloomberg, buyer behavior seems to indicate that the appetite is already there for fully electric vehicles, with the current hesitation being about the incessant worrying about range and, in the case of older vehicles such as the early Prius, mixed reviews about resale value and dependability.

Which takes us back to our economic forecasting at 21C.  In the near term, the 21C palladium project in Ontario is drill-ready and, due to its excellent location and logistics, the economics stack up.  The company’s Tisova cobalt project (or, as it’s sometimes lovingly referred to, the Tisova copper project with an excellent cobalt credit) stands ready, with drill targets identified and a program commencing Q2 2019.





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