Northern Cobalt float is just above water after listing on the ASX

Northern Cobalt is primed to begin a 20,000-metre cobalt drilling program in the Northern Territory after listing today on the ASX at a 2.5 per cent premium to its issue price.

The Adelaide-based cobalt explorer (ASX:N27) was trading at 20.5c after completing its initial public offering to raise $4.2 million at 20c per share.

Its Wollogorang cobalt project has an “inferred” mineral resource of 500,000 tonnes at 0.17 per cent cobalt, 0.09 per cent nickel and 0.11 per cent copper.

Mineral resources are categorised in order of increasing geological confidence as inferred, indicated or measured.

Historical drilling of 21,468 metres was undertaken by Rio Tinto at the site in the mid 1990s.

Northern will begin a 20,000-metre drilling program with a rig due to arrive at the site on Monday. The drilling program is expected to be completed before the end of the year.

The aim of the 230-hole program is to expand the existing cobalt resources at the Stanton cobalt deposit and test several mineralised drill targets.

Funds raised in the IPO will go towards increasing the global mineral resource inventory at the Wollogorang and upgrading resources from the “inferred” to “indicated” category.

The cobalt sector represents a growing opportunity for investors as increasing global demand for electric vehicles drives demand for cobalt-based lithium-ion batteries.

Global demand for electric vehicles (EVs) is estimated to reach some 7 million units in 2020. China has indicated that a minimum of 30 per cent of new vehicles purchased by the government or public service will be electric.

Tesla has pledged to build 1 million EVs per year by 2020, while auto giant Volkswagen plans to be a leading EV maker by 2025.

Northern Cobalt had a market cap of $9.14 million at listing.