Battery metals explorer MetalsTech chooses lithium over cobalt
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Lithium and cobalt explorer MetalsTech is looking to become a single-commodity player again with the spin-out of its cobalt assets.
The company (ASX:MTC) is demerging its Bay Lake cobalt project in Ontario, Canada into iCobalt and undertaking a $4.5 million initial public offer.
The aim of the move is to accelerate exploration of Bay Lake as well as complete the acquisition of the Rusty Lake silver, cobalt and nickel mine, which is also in Ontario.
Both lithium and cobalt have become hot commodities in the past few years because of the growing demand for electric vehicles. Both are used in electric car batteries.
Bloomberg Energy Finance predicts electric cars will account for 2 per cent of the market by 2020, rising to 8 per cent by 2025 and 20 per cent by 2030.
MetalsTech originally listed as a lithium explorer, but in March last year came across the Bay Lake project, which executive chairman Russell Moran told Stockhead was “too good to turn down”.
“We thought the investor base that we had and the investor base that we were seeking to attract to the company would be happy to invest in a company that had the two commodities being explored for given that they are both battery minerals,” he said. “However, we haven’t really had success with that traction.”
But MetalsTech will still retain exposure to the cobalt assets. “We will hold about of the third of the company that will carry on with the assets and that can move to a half with the performance of the assets,” Mr Moran said.
Upon listing, iCobalt will have an undiluted market capitalisation of $9.1 million and an enterprise value of $4.6 million.
As part of the move, Cherie Leeden has been named vice president of exploration for iCobalt.
Mrs Leeden, a geologist with over 15 years of experience, is the co-founder and former managing director of Battery Minerals (ASX:BAT) and was responsible for the discovery of high grade graphite deposits in Mozambique.
MetalsTech is aiming to lodge the prospectus in March ahead of an April listing for iCobalt.