The Energy Report

Expert Comments:

Cobalt Pure Play Now Cashed Up for Stream, Royalty Deal (3/19/18) Five analysts weigh in on this company's recent financial transaction and likely next move. read more >
	Eric Zaunscherb, Canaccord Genuity (3/15/18) "We are increasing our target price to CA$16.50 from CA$15 while maintaining our Speculative Buy rating on Cobalt 27 Capital Corp. . .the market remains focused on the company's delivery of a significant streaming deal. There are several potential large producer cobalt streams on the table."
MacMurray Whale, Cormark Securities (3/14/18) "Last week, Cobalt 27 Capital Corp. completed a $200M private placement, for which we served as a member of the underwriting syndicate. . .with the research restriction period ended, we are resuming coverage on the company, maintaining our $16.30 target and Buy recommendation. . .we expect Cobalt 27 will conclude a streaming deal, which could add material value to the stock."
Craig Hutchison, TD Securities (3/12/18) "We are resuming coverage of Cobalt 27 Capital Corp. following the closing of its $200M equity private placement. . .following the equity financing, we now estimate that the company has ~$206M in cash to fund potential growth through acquisitions of physical cobalt, royalties and/or streams. . .our Buy rating and $17 target price remain unchanged."
Jonathan Guy, Numis (3/12/18) "Cobalt 27 Capital Corp. has raised CA$200M through the issue of 17.56M shares at a price of CA$11.40. . .this material strengthening of the balance sheet should make it easier for the company to bid for streams and royalties, as counterparties will know that the company has the capacity to fund transactions. We expect Cobalt 27 to principally target assets where cobalt is produced as a byproduct of nickel mining."
	Rupert Merer, National Bank of Canada (3/12/18) "Cobalt 27 Capital Corp. closed a $185M private placement offering. The company has agreed on terms for a private placement of common shares with a group of investors; it issued 16.2M shares at $11.40/share (15% discount to prior closing price)."
	Eric Zaunscherb, Canaccord Genuity (3/12/18) "We increase our Cobalt 27 Capital Corp. target price to CA$15 from CA$14 to reflect the $200M equity issue just completed in anticipation of a potential acquisition of a cobalt streaming deal. . .the company's strengthening balance sheet, underpinned by physical cobalt, in our view enhances the likelihood that Cobalt 27 may participate in a streaming arrangement in the near term."
Coverage Initiated on Cobalt Pure Play with Upside; Rated Outperform (2/21/18) Rupert Merer, an analyst with the National Bank of Canada, explained the thesis for investing in this company, noting the supply/demand dynamic with regard to batteries for electric cars could drive value. read more >
Target Prices Increased on Company Holding Large Inventory of Refined Cobalt (2/6/18) Experts discussed the reasons this company merits an increased target price: a rising cobalt price, the market's openness to an even higher one and the firm's strengthening its balance sheet to likely acquire more of the physical metal and, ultimately, engage in a streaming deal. read more >
Analysts Increase Target Prices on Cobalt Pure-Play (1/6/18) With electric vehicle demand booming, cobalt is a hot commodity, rising about 130% in 2017. This TSX.V-listed company offers one of the few ways to gain pure-play exposure. read more >
Cobalt Pure-Play Hitched to Electric Vehicle Boom (11/21/17) Forecasts of an electric vehicle boom are behind skyrocketing demand for cobalt, a major component in batteries. In this interview with The Energy Report, Anthony Milewski, CEO of Cobalt 27 Capital Corp., discusses the company's unique position as a two-pronged pure-play on cobalt. read more >

More Expert Comments

MacMurray Whale, Cormark Securities (2/27/18) "Cobalt 27 Capital Corp.'s net smelter return (NSR) royalty features a long life, a repurchase option and exposure to all the metals to be produced from Dumont. . .the resource is large, in a mining-friendly jurisdiction and has key permits and infrastructure. . .by incorporating the Dumont NSR royalty as a discounted cash flow on future royalties, we have raised our target to $16.30 from $14.50 previously."
Craig Hutchison, TD Securities (2/23/18) "We are assuming coverage of Cobalt 27 Capital Corp. . .we have increased our target price to $17 (from $16) to reflect the royalty acquisition, and we remain a Buy. . .the company remains, in our view, the best way in our coverage universe for investors to get pure play cobalt exposure as part of the broader trend of increasing electric vehicle adoption without traditional mining- or development-related project risks."
	Eric Zaunscherb, Canaccord Genuity (2/23/18) "Cobalt 27 Capital Corp.'s recent announcement surrounding the acquisition of a 1.75% net smelter return at Royal Nickel's Dumont project located in Quebec strikes us as a very positive step in creating a diversified portfolio. . .with the goal of becoming a differentiated cobalt investment vehicle, offering direct exposure to the commodity price and direct cash flow from royalties and streams, we believe securing this deal solidifies the business strategy."
	Colin Healey, Haywood Securities (2/23/18) "Cobalt 27 Capital Corp. has acquired a 1.75% NSR royalty on future production of all metals (including nickel, cobalt, platinum and palladium) at the Dumont nickel-cobalt project. . .we view this as a positive development for the company. . .we continue to await Cobalt's entry into a streaming transaction with an established producer, generating immediate cash flow, as the stock's next major catalyst."
Andrew Mikitchook, BMO Capital Markets (2/22/18) "Cobalt 27 Capital Corp. announced the purchase of a 1.75% royalty on the Dumont project in Quebec owned by RNC Minerals, consistent with its stated strategy of leveraging physical cobalt assets toward streaming and royalty acquisitions; we have added the Dumont royalty to our model at a value of CA$94M. We are increasing our target for the company to CA$17.50 from CA$16 and reiterating our Outperform rating."
Anoop Prihar, GMP Securities (2/22/18) "Cobalt 27 Capital Corp. announced that it has acquired a 1.75% net smelter royalty on the future production of all metals (nickel, cobalt, platinum and palladium) produced at the Dumont project. . .the Dumont project is a late-stage, fully permitted development project which could begin production in 2021."
Michael Doumet, Scotiabank (2/22/18) "Cobalt 27 Capital Corp. announced that it acquired an existing 1.75% NSR royalty (from a third party) on all future production from the Dumont nickel-cobalt project. . .we increased our target to $14.75/share. . .we see continued upside in the shares from cobalt price appreciation and value accretive transactions."
	Rupert Merer, National Bank of Canada (2/22/18) "Cobalt 27 Capital Corp. acquired a 1.75% net smelter return royalty on all future production from the Dumont nickel-cobalt project. . .the company is not raising capital to fund the acquisition. . .with an initial assumption of $6.50/lb nickel and with a 14% discount rate, we derived a $30M value for the royalty agreement."
	David Talbot, Eight Capital (2/22/18) "Cobalt 27 Capital Corp. held true to its promise of adding near-term royalties to its portfolio upon the acquisition of a 1.75% net smelter return on all metals from the Dumont Ni-Co project in Quebec. . .Dumont appears to nicely fit into the mix."
	Rupert Merer, National Bank of Canada (2/15/18) "We are initiating coverage on KBLT with an Outperform rating and a 12-month target of CA$14.25/share. . .we believe that the company could execute on a larger streaming deal in the next 12 months."
	David Talbot, Eight Capital (2/1/18) "We increase our share price target on Cobalt 27 Capital Corp. to CA$15.90 from CA$10.90/share after applying higher cobalt prices, recent equity raise and physical cobalt purchase. . .management has a mandate to pursue income stream or royalty arrangements with advanced developers and producers to generate attractive returns while limiting risk."
	Eric Zaunscherb, Canaccord Genuity (1/31/18) "We are raising our target price for Cobalt 27 Capital Corp. to CA$14 from CA$10 while maintaining our Speculative Buy rating. On the back of stronger-than-expected cobalt pricing and the market's willingness to anticipate even higher pricing, and the potential for the addition of streaming deals to the company's portfolio, Cobalt 27's share price has briskly climbed through our price target and bull case scenario established at initiation of coverage in August 2017."
Scott Patterson, The Wall Street Journal (1/29/18) "Cobalt 27 Capital Corp. currently does nothing but buy and hold cobalt; it keeps 3 Kt cobalt distributed in warehouses in Antwerp, Baltimore and Rotterdam, one of the world's largest stockpiles of the metal. The company's shares have quadrupled since it went public in Toronto in June, giving it a market value of about $370M."
Andrew Mikitchook, BMO Capital Markets (1/9/18) "We have initiated coverage on Cobalt 27 Capital Corp. with an Outperform rating. The company offers a unique, pure play cobalt investment opportunity with a scarcity of cobalt-leveraged alternatives; core assets consist of warehoused cobalt metal, and the company intends to complete cobalt streaming agreements with producers."
Anoop Prihar, GMP Securities (1/3/18) "On Dec. 20, Cobalt 27 Capital Corp. closed a bought deal equity financing by issuing 8.1M shares at $10.50/share for gross proceeds of $85M which will be used to fund the purchase of additional physical cobalt. The company has commitments in place to purchase 822 t cobalt at a price of $36.28/lb, increasing its total inventory to 2,982.9 t."
Jonathan Guy, Numis (12/28/17) "Cobalt 27 Capital Corp. has completed the purchase of 800 t high-grade cobalt, taking its total holding to 2,982.9 t, 2,270.3 t high grade and 712.6 t standard grade; the company has also completed the CA$97.8M equity raise to fund the purchase and provide general working capital. We retain a Buy recommendation and increase our target price to CA$15 from CA$11 driven by higher long-term cobalt pricing assumptions."
Michael Doumet, Scotiabank (12/19/17) "We are off restriction on Cobalt 27 Capital Corp. following its purchase of 822 Mt cobalt and concurrent $100M equity offering (9.5M shares), including the exercise of the entire overallotment option. . .we see continued upside in the shares from cobalt price appreciation and value accretive transactions."
	Colin Healey, Haywood Securities (12/19/17) "Cobalt 27 Capital Corp. raised a total of $80.5M in net proceeds (prior to overallotment) to fund the purchase of ~800 t physical cobalt and will issue an additional $2.2M in shares for another 22 t. . .we believe the deal puts the company in a strategically attractive position in the cobalt market and sets the stage for a streaming transaction. We have raised our target to $14/share based on our expectations for a deal materializing within Q1/18."
MacMurray Whale, Cormark Securities (12/19/17) "We are initiating coverage on Cobalt 27 Capital Corp. with a Buy recommendation and $13.00 target. As a holder of almost 3,000 t of physical cobalt metal, KBLT brings immediate exposure to high cobalt prices and expectations for further price increases owing to rising demand from the battery space. Further upside exists through its ownership of net smelter returns (NSRs). Cobalt 27 is actively examining streaming interests and direct investments in cobalt operations and/or development opportunities, which will drive a higher level of exposure for investors."
	David Talbot, Eight Capital (9/26/17) "We initiate coverage of Cobalt 27 Capital Corp. with a BUY and a C$10.90 share price target. . .Cobalt 27 offers investors the first pure play vehicle to gain direct exposure to cobalt. . .holding physical cobalt should serve as an excellent proxy for market sentiment due to its strong correlation to cobalt pricing. . .management has indicated that it plans to pursue a growth strategy through potential additions to its physical cobalt holdings. . .while its eight royalties are small and far from production, these royalties speak more to management's ability to transact. We expect KBLT to engage more advanced developers and producers with streams or royalties."
SmallCapPower.com (9/20/17) "Cobalt 27 Capital Corp. is one of the four Canadian cobalt stocks with the greatest monthly momentum. . .driven by increasing demand for batteries used in electronic vehicles and supply shortages, global cobalt prices continue to surge and currently trade at multi-year highs of $28/lb. . .annual demand for cobalt is projected to exceed 120,000 tonnes by 2020, up 30% from the 93,950 tonnes consumed in 2016. To take advantage of this secular bullish trend in cobalt, investors could invest in miners that are focused on cobalt. . .Cobalt 27 Capital Corp. offers pure-play exposure to cobalt."
	Eric Zaunscherb, Canaccord Genuity (8/21/17) "We are initiating coverage of Cobalt 27 Capital Corp. . .with the advancement of lithium-ion battery technology, cobalt has become a key component of battery chemistry. It is vital for stable battery chemistry in positively charged cathodes and makes up 9% to 14% by weight of the material used in battery construction. Cobalt prices have risen 193% since December 2015 on accelerating electric vehicle and grid energy storage applications, but we expect a cobalt demand CAGR of 14% and ongoing supply deficits to 2025. . .Cobalt 27 is a hybrid investment vehicle engineered to provide the only pure investment quality cobalt exposure."
	Colin Healey, Haywood Securities (8/9/17) "We are initiating coverage on Cobalt 27 Capital Corp., a unique vehicle that offers pure-play exposure to physical cobalt commodity price speculation and secular trends in the development of battery technologies to support the global effort to transition to a low-carbon economy. . . Cobalt 27 has acquired seven net smelter return royalties on exploration-stage properties focused on cobalt. This model allows for an asymmetric payoff profile, with limited downside from the typical risks associated with mining operations. . .we are initiating coverage with a BUY rating and $11.50 price target."
Carey MacRury, TD Securities (7/28/17) "Cobalt 27 Capital Corp. is a new company offering investors pure-play exposure to physical cobalt, a key element in most lithium-ion batteries. . .the company provides investors with one of the few ways globally to get pure-play exposure to cobalt without taking on the exploration, development or operating risk associated with cobalt mines. . .management aims to accretively grow its cobalt exposure through the acquisition of additional physical cobalt, streams, royalties, and potentially direct interests in mineral properties containing cobalt. . .the key to future cobalt demand is the adoption of electric vehicles (EV). . .we also expect countries to continue to subsidize EV purchases in order to meet Paris Accord commitments."
Anoop Prihar, GMP Securities (7/19/17) "Cobalt 27 Capital Corp. is a newly listed public company that offers direct leverage to cobalt price appreciation. The company currently owns 2,158.8 tonnes of physical cobalt and a portfolio of cobalt royalties. . .future demand will be driven by robust growth in EV sales which is a function of falling battery costs, supportive government policies, the transition to cobalt based EV batteries. . .the production of refined metal over our forecast period is expected to increase from 93.5K tonnes to 121.6K tonnes, which suggests the market will remain in deficit. . .we are initiating coverage with a BUY rating and $12 target price."
Michael Doumet, Scotia Capital Inc. (7/11/17) "We believe Cobalt 27 Capital Corp. is uniquely positioned to benefit from the favourable market dynamic and can offer investors pure-play exposure to cobalt without the risks associated with exploration, development, and geopolitics. . .we believe an emerging “battery boom”. . .will drive cobalt demand to new heights and outstrip supply. . .we expect the company to pursue and transact on a number of streaming opportunities, which should tilt the company's value toward cash-generating cobalt streams, effectively transforming KBLT into a hybrid physical holding and streaming company, which, in our view, has favourable valuation implications."
Jonathan Guy, Numis (6/27/17) "Cobalt 27 Capital is a dedicated cobalt investment vehicle that provides direct exposure to the metal through a combination of physical cobalt holdings and a series of royalty agreements with companies that hold an interest in cobalt projects. Cobalt, alongside lithium, is one of the key elements of modern batteries that are used in electric vehicles and static power storage systems. . .[this demand] has driven the cobalt price upward from a low of US$10/lb at the beginning of 2016 to US$27/lb for standard grade at present and should sustain higher prices over the medium and long term."

Experts Following This Company

Michael Doumet, Equity Analyst – Scotiabank, Scotia Capital Inc.
	Colin Healey, Analyst – Haywood Securities
Craig Hutchison, Analyst – TD Securities
Carey MacRury, Equity Analyst – TD Securities
	Rupert Merer – National Bank Financial
Andrew Mikitchook, Analyst – M Partners
Anoop Prihar, Director, Special Situations Analyst – GMP Securities
	David Talbot, Vice President, Senior Analyst – Eight Capital
MacMurray Whale, Analyst – Cormark Securities
	Eric Zaunscherb, Analyst – Canaccord Genuity

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